Hong Kong police arrest 7 over bogus HK$10 million bankruptcy loan scheme

Hong Kong Police have arrested seven members of a fraud syndicate accused of swindling nearly 100 victims out of HK$10 million (US$1.3 million) by luring them into taking out loans under a bogus bankruptcy scheme and then charging hefty handling fees that left them even further out of pocket.The case first surfaced last year after four victims reported receiving cold calls offering help in securing low-interest loans. They were later invited to an office in Kwai Fong, which falsely claimed to be an accounting firm, where staff promoted a “personal mini-bankruptcy plan”, according to the regional anti-deception unit of New Territories South.Victims were told that by joining the scheme, they would not need to repay existing debts and would avoid normal bankruptcy restrictions, such as limits on buying property, vehicles or applying for new loans.Once victims expressed interest, they were taken to a finance company in Tsim Sha Tsui and persuaded to borrow sums ranging from HK$38,000 to HK$170,000, at annual interest rates as high as 47 per cent.After receiving the loan funds, staff immediately took the money under the pretext of referral handling fees. Victims were then directed to a designated law firm to process the supposed bankruptcy plan, only to discover that they were actually applying for formal bankruptcy.When the victims realised that the “mini-bankruptcy” scheme did not exist, the fraudsters could no longer be contacted.