HONG KONG: Hong Kong police arrested two Taiwanese for lottery fraud on Thursday. All victims are overseas Chinese.

The two arrested scam artists and one co-conspirator misrepresented themselves as staff of the "Hong Kong Tourism Authority" - a name that they concocted, and then claimed they were conducting a survey of tourist opinions, acquiring the victims' mailing addresses through phone calls. Thereafter, a bogus promotional brochure introducing tourism spots in Hong Kong, with a scratchcard on it, was sent to the victims during the period spanning November 5-25. All the scratchcards indicated that a first prize of HK$500,000 was won. To collect their "winnings", victims were told to deposit a 5 percent tax payment into a designated bank account, Superintendent of Police of Commercial Crime Bureau Yuen Yuk-kin said.

The police believe the swindlers in the case are mainly Taiwanese. One of the two arrested is also believed to be the mastermind of the frauds. The other withdrew money and posted the letters. About 1,700 similar letters and around HK$300,000 were also seized.

The victims involved are Chinese in Singapore, Australia and New Zealand. A total of 150 case reports had been received by Thursday, involving four victims, who, as a group, were conned out of about HK$200,000, Yuen said.

In fact, he added, the case is just a tip of the iceberg of a large number of lottery scams.

About HK$46 million was involved in these cases, involving swindles dating from early 2008, said Yuen. The victims of most lottery fraud cases are overseas Chinese, according to one of the staff of Commercial Crime Bureau.

Moreover, there is an emerging trend of the use of Hong Kong bank accounts for collecting and disbursing the proceeds of lottery frauds, according to the Joint Financial Intelligence Unit. Analysis has shown that the majority of accounts used in connection with this type of activity were opened by Taiwanese or Malaysians. Incoming remittances were received from victims in geographically diverse areas, it also said.

Usually, the victims were approached by emails or "cold calls". But in this case, the scammers printed brochures quite similar to the ones of the Hong Kong Tourism Board, Yuen indicated.

The investigation on whether there are more victims is still ongoing. The police did not rule out the possibility that more scam artists will be arrested later.

The police stated that they have been waging an ongoing campaign against this type of crime, collaborating with overseas law enforcement agencies, to safeguard both the public and the reputation of Hong Kong as a financial and tourism center.

(HK Edition 11/28/2009 page4)