Trio charged by ICAC over $8m mortgage loan fraud by understating property purchase price
2022-4-20
The ICAC yesterday (April 19) charged a property buyer and two estate agents with conspiracy to defraud by falsely understating that the purchase price of a residential property in Shatin was only $10 million so as to obtain a bank mortgage loan with an 80 per cent loan-to-value (LTV) ratio, which amounted to $8 million.
The ICAC investigation arose from a corruption complaint. Upon completion of the investigation, the ICAC sought legal advice from the Department of Justice, which advised pressing charges against the trio.
Timothy Lau Tin-yuen, 38, employee of an insurance company; Ho Tung-hung, 40, and Wong Man-yin, 37, both property agents of Festival Home Property Agency Limited (Festival Home); jointly face one count of conspiracy to defraud, contrary to Common Law.
Lau alone further faces one count of fraud, contrary to Section 16A of the Theft Ordinance.
The defendants were released on ICAC bail, pending their appearance in the Shatin Magistrates’ Courts tomorrow (April 21) for plea.
The alleged offences took place between January and March 2020. At the material time, Lau was a prospective buyer of a residential property in Shatin. Ho and Wong, both property agents of Festival Home, were requested by Lau to negotiate the purchase price with the vendor.
According to the guidelines issued by the Hong Kong Monetary Authority, banks are required to comply with the LTV ratio requirement for property mortgage lending. Under mortgage insurance programmes, a purchaser could obtain a mortgage loan of up to an 80 per cent LTV ratio from a bank if the purchase price of the above property did not exceed $10 million. If the purchase price was above $10 million, the maximum LTV ratio would be 50 per cent of the purchase price.
One of the charges alleges that the three defendants conspired together with the vendor of the above property to defraud banks which would offer property mortgage loans by dishonestly falsely representing that the purchase price of the above property was $10 million while the actual price was $10.5 million; and causing the banks to grant mortgage loan facilities with an 80 per cent LTV ratio to Lau for purchasing the property.
ICAC enquiries revealed that Lau had allegedly paid the remaining purchase price of the property of $500,000 in cash to the vendor. He made two applications for mortgage loans with 80 per cent LTV with two banks. Both applications were approved and he accepted one of the mortgage loans, which was $8 million.
Another charge alleges that Lau induced the Inland Revenue Department (IRD) to levy a lesser amount of ad valorem stamp duty on the above property by making a similar false representation on the purchase price of the property. It is alleged that due to his false representation on the purchase price of the property, the IRD had undercharged $18,750 in stamp duty from Lau.
An ICAC spokesperson reminds property buyers and vendors not take part in any corrupt and illegal activities when making transactions, while property agents should uphold their professional ethics. Should anyone come across any suspicion of corruption, they should report to the ICAC immediately.
The IRD and the two banks concerned have rendered full assistance to the ICAC during its investigation into the case.
The ICAC investigation arose from a corruption complaint. Upon completion of the investigation, the ICAC sought legal advice from the Department of Justice, which advised pressing charges against the trio.
Timothy Lau Tin-yuen, 38, employee of an insurance company; Ho Tung-hung, 40, and Wong Man-yin, 37, both property agents of Festival Home Property Agency Limited (Festival Home); jointly face one count of conspiracy to defraud, contrary to Common Law.
Lau alone further faces one count of fraud, contrary to Section 16A of the Theft Ordinance.
The defendants were released on ICAC bail, pending their appearance in the Shatin Magistrates’ Courts tomorrow (April 21) for plea.
The alleged offences took place between January and March 2020. At the material time, Lau was a prospective buyer of a residential property in Shatin. Ho and Wong, both property agents of Festival Home, were requested by Lau to negotiate the purchase price with the vendor.
According to the guidelines issued by the Hong Kong Monetary Authority, banks are required to comply with the LTV ratio requirement for property mortgage lending. Under mortgage insurance programmes, a purchaser could obtain a mortgage loan of up to an 80 per cent LTV ratio from a bank if the purchase price of the above property did not exceed $10 million. If the purchase price was above $10 million, the maximum LTV ratio would be 50 per cent of the purchase price.
One of the charges alleges that the three defendants conspired together with the vendor of the above property to defraud banks which would offer property mortgage loans by dishonestly falsely representing that the purchase price of the above property was $10 million while the actual price was $10.5 million; and causing the banks to grant mortgage loan facilities with an 80 per cent LTV ratio to Lau for purchasing the property.
ICAC enquiries revealed that Lau had allegedly paid the remaining purchase price of the property of $500,000 in cash to the vendor. He made two applications for mortgage loans with 80 per cent LTV with two banks. Both applications were approved and he accepted one of the mortgage loans, which was $8 million.
Another charge alleges that Lau induced the Inland Revenue Department (IRD) to levy a lesser amount of ad valorem stamp duty on the above property by making a similar false representation on the purchase price of the property. It is alleged that due to his false representation on the purchase price of the property, the IRD had undercharged $18,750 in stamp duty from Lau.
An ICAC spokesperson reminds property buyers and vendors not take part in any corrupt and illegal activities when making transactions, while property agents should uphold their professional ethics. Should anyone come across any suspicion of corruption, they should report to the ICAC immediately.
The IRD and the two banks concerned have rendered full assistance to the ICAC during its investigation into the case.