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Ex-senior executive of HKMA and SFC jailed for housing fraud and tax evasion

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A former senior officier of the Hong Kong Monetary Authority (HKMA) and former senior officer of the Securities and Futures Commission (SFC) was today (Friday) sentenced to four months' imprisonment at Eastern Magistracy for deceiving housing allowances totalling over $1.1 million and evading salaries tax.

The defendant, aged 69, was also fined $75,000 for the tax evasion offence.

The defendant today pleaded guilty to two counts of agent using false document with intent to deceive HKMA, contrary to Section 9(3) of the Prevention of Bribery Ordinance.

He also pleaded guilty to one count of wilfully with intent to evade tax making use of a fraud, art or contrivance, contrary to Section 82(1)(g) of the Inland Revenue Ordinance.

In sentencing, Magistrate Mr Ian Candy said a custodial sentence had to be imposed in view of the serious breach of trust.

The court heard that while employed by HKMA, the defendant had used two Applications for Housing and Holiday Allowances Forms containing false statements, respectively on April 13, 1998 and May 3, 1999, to mislead HKMA.

The defendant falsely represented in the applications that the rented accommodation for which he was claiming housing allowance was not owned by him and/or his relative directly or indirectly, and that his claim represented a genuine rental transaction at market rates.

ICAC investigations revealed that the said accommodation was in fact held by a shelf company controlled by the defendant.

As a result of the fraud, housing allowances of $660,000 and $495,000 were granted to the defendant for the financial years 1997/98 and 1998/99 respectively.

The court also heard that while under the employment of SFC, the defendant made use of a tenancy arrangement between himself and the shelf company on November 16, 2000, with intent to evade salaries tax for the year of assessment 1999/2000.

Under the tenancy arrangement, rental amounts grossly in excess of the true market value were paid to the company.

The amount of his chargeable income for salaries tax was subsequently reduced, and the tax evaded for the year of assessment 1999/2000 amounted to $60,560.

The court heard that after $38,327 was paid by the shelf company, the net amount of tax evaded by the defendant for the year of assessment 1999/2000 totalled $22,233.

Ends/Friday, January 16, 2004

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