CCAC report: Fraud associated with gov’t subsidy schemes

The 2019 Annual Report of the Commission Against Corruption (CCAC) published this week uncovered a high number of incidents connected to several government subsidy schemes, namely the Environmental Protection and Energy Conservation Fund, and the Continuing Education Development Plan. The report also detailed several instances where public officials were associated with cases involving corruption, fraud and abuse of power.
Regarding the first scheme, the CCAC noted in the report that it had investigated a case that was handed over by the Ombudsman Bureau where a restaurant owner was allegedly involved in a scam during his application for the subsidy.
During the investigation, the CCAC found that between 2012 and 2016, the eco-friendly kitchenware supplier involved had handled the application procedures for at least seven other merchants, helping them obtain subsidies from the Energy-saving Products and Equipment Subsidy Scheme of the Environmental Protection and Energy Conservation Fund.
The supplier had submitted false documents for the merchants to the Environmental Protection and Energy Conservation Fund to obtain the subsidies. They provided them with products at odds with those stated in the applications and overstated transaction amounts, resulting in a fraud of over MOP2 million.
The CCAC also uncovered a case where a local education center had allegedly defrauded subsidies from the Continuing Education Development Plan of the Education and Youth Affairs Bureau (DSEJ).
The bureau discovered not only a scam in which applicants would receive subsidy money for fake courses, but also a scheme in which 30% of the subsidy fund would be given to the organizers as cash kickbacks.
Further investigation revealed that an investigator from the Judiciary Police allegedly conspired with the education center and other suspects to lure in and dupe residents who had funds in their continuing education subsidy accounts.
The person in charge of the education center was suspected to have provided false application information in the computer system for at least 19 applicants who did not attend any courses at all.
The PJ investigator posed as a course instructor in case of an inspection from the DSEJ. He is also suspected of fabricating and submitting fake attendance records with fake signatures from the alleged students.
According to the CCAC, the suspects defrauded over MOP540,000 worth of subsidies.
Using the same method, the person in charge of the education center also used funds belonging to elderly people to enroll them in other fake courses, unlawfully obtaining subsidies worth over MOP140,000 from the DSEJ.