Online investment scams net HK$132m in just two months

Fraudsters swindled more than HK$132 million from victims of online investment scams in 243 cases reported in Hong Kong in the first two months of this year, police revealed yesterday.

The amount of money the victims lost rose 268 per cent from HK$35.9 million in the same period last year, according to Senior Inspector Lam Pui-hang of the force’s Anti-Deception Coordination Centre. He said 110 cases of online investment fraud were reported between January and February of 2021.

Reports of such fraud rose sharply from 208 in 2017 to 980 in 2021, while the losses involved also increased 277 per cent to HK$472 million from HK$125 million.

According to the force, scammers posing as investment experts usually preyed on targets through social media and sometimes deployed good-looking and sweet-talking con artists to lure victims.

“They show off their well-off lifestyle and post photographs of luxury cars and watches on social media to draw their target’s attention,” Superintendent Yip Winglam of the commercial crime bureau said. He said swindlers then persuaded people to invest, claiming they “could yield high returns and face low risk”.

In recent years, scammers turned their sights on jobseekers amid the pandemic and high unemployment rate, he said.

“They claimed to offer jobs but in fact they lured the victims into bogus investment deals and cheated them of their money,” Yip said. He said some victims were instructed to transfer money into cryptocurrency accounts in an attempt to make police investigations more difficult.

Some victims were also lured into downloading a fake investment app which was controlled by con artists.

Lam said scammers impersonated customer service agents to get victims to open investment accounts and use the app, which showed fake transaction records and returns, coaxing the targets into investing more money.

“If victims want to cash out, the fraudsters make up excuses, such as system failure, illegal investments or tax payment to process the cashing out, to delay payment,” he said.

Lam said victims were told their investment accounts had been frozen and they were lured into making further investments to get their money back. They realised they had been scammed when the “investment experts” could no longer be reached.

According to police, some people fell victim to a “ramp and dump” investment scam, which is a form of stock market manipulation. Fraudsters use various means to “ramp” up the share price of a listed company and then induce investors via social media to buy the stock they “dump” at an artificially high price. Hapless victims are left suffering serious losses as the share price collapses.

Police reminded the public to stay vigilant against investment plans with unrealistic yields and thoroughly understand the product’s features and security risk before putting in money.

Officers also urged people to exercise extra caution when transferring money to personal accounts for investment purposes and to not download any unknown apps.

Separately, six alleged core members of a fraud syndicate appeared in Eastern Court yesterday after being charged with conspiracy to defraud and money laundering. According to police, their alleged offences involved HK$397.4 million in total.

The six suspects, aged between 24 and 38, were among 66 people who were rounded up by police in 2018 and 2019 in connection with a bullion trading scam in which 215 victims were cheated out of HK$111 million between 2015 and 2017. Police began the investigation in 2017.

Yip said that during the fiveyear inquiry, officers carried out financial analysis, studied a large quantity of financial reports and records of transactions and met hundreds of victims and witnesses. He said police sought legal advice from the Department of Justice and laid charges against the suspects recently.

They claimed to offer jobs but in fact they lured the victims into bogus investment deals

SUPERINTENDENT YIP WING-LAM

Police have arrested seven people in connection with scams involving fake low-interest loans, which resulted in total losses of HK$2.8 million for 48 victims.

The six men and a woman, aged 20 to 38, were holders of bank accounts that were used to collect the proceeds of crime, Chief Inspector Mok Tsz-wai of Kowloon East regional crime unit said yesterday.

“The proceeds of crime that each account handled ranged from HK$47,000 to HK$1.26 million,” he said.

Mok said the investigation suggested the suspects were recruited by the same fraud syndicate and were paid between HK$3,000 and HK$5,000 each to surrender their bank accounts, which were used to collect money scammed from the victims. Officers said they believed the money was then withdrawn from the accounts via bank ATMs.

The seven suspects were detained on suspicion of obtaining property by deception, an offence that is punishable by up to 10 years in jail.

Mok said they could also face prosecution for money laundering, which carries a maximum penalty of 14 years in prison and a HK$5 million fine.

According to police, con artists posed as employees of local banks or financial companies, cold-calling their targets to offer the loans.

Senior Inspector Lau Kai-yin said fraudsters persuaded victims to pay a surety to secure the low-interest loans and then instructed them to transfer the money into a designated bank account.

“The victims were told they would secure their loans in higher amounts if they could put in more money for surety,” he said.

Mok said the victims were told the surety money would be returned to them once their loans were approved. According to the force, some victims were even persuaded to go to legitimate financial institutions to take out real loans to pay the sureties for the bogus low-interest ones.

Mok said one victim – a 22-year-old postsecondary student – wanted HK$100,000 in a so-called low-interest loan, but was coaxed into borrowing HK$400,000 from 30 money lenders in one year.

He said she eventually failed to secure the low-interest loan, but ended up with HK$400,000 in debts. She realised she had been conned when she discussed it with her family.

Mok said the swindlers sometimes used gifts such as a mobile phone or tablet computer to lure their victims into paying more money in surety.

Police said 48 victims, aged 22 to 71, filed police reports between March 2020 and September 2021. They included students, housewives, decorators and businessmen.

Officers from the Kowloon East regional crime unit arrested the seven suspects in a series of raids across the city between Tuesday and yesterday. Four of them are suspected triad members.

During the operation, codenamed “Doubleroute”, officers seized mobile phones, bank cards and documents.

Officers are still trying to track down another two account holders in connection with the cases and those who recruited the suspects.

The seven suspects have been released on bail pending further investigation.