A company has been found to be hiring “phantom employees” to cheat the Labour Department out of HK$260,000 in travel subsidies. It is the first case of its kind to be uncovered by the police since the implementation of the government’s subsidy scheme in 2011.

An engineering company in Fo Tan was used as a front to create fake employment records for “phantom employees”. Police said that many of those involved in the swindle had organised crime backgrounds, The Sun reported. The “employees” were instructed to lie to the Labour Department by pretending to be working as technicians, clerks and cleaners. Each applied for travel subsidies of HK$600 every month under the department’s Work Incentive Transport Subsidy Scheme. The gains, which were around HK$2000-$4000 a year per person, would then be divided.

The company had been involved in 42 cases of subsidy fraud between May 2014 and May 2015, with the application amount totalling HK$260,000. The Labour Department has awarded the company around HK$147,000 in subsidies as 23 applications had been approved.

Labour Department. Photo: Wikicommons.

Over the past week, police arrested 25 people involved in the fraud, with at least ten others still being sought by the authorities. Those arrested were released on bail and are set to report to the police station in October.

A spokesperson for the police reminded Hongkongers that it was illegal to be involved in any kind of fraud relating to assistance provided by the government. Offenders could be imprisoned for the crime of obtaining property by deception under the Theft Ordinance.

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Karen is a journalist and writer covering politics and legal affairs in Hong Kong for HKFP. She has also written features on human rights, public space, regional legal developments, social and grassroots activism, and arts & culture. She is a BA and LLB graduate from the University of Hong Kong.