HK$50 million charity fraud case a ‘misunderstanding’, Hong Kong subsidiary supervisor says

But he did not further explain why some of the money was transferred to three personal accounts, which police on Thursday said were set up by the implicated principal and directors.

The case affected the public’s donation willingness, Chui said, adding the money raised in donations would also be frozen.

He said the incident poured cold water on a group of caring people, noting he would talk to authorities to deal with the aftermath.

The college will continue operations despite the case, according to Chui.

He added many students had graduated from the college since it started operating more than 20 years ago and wondered who would benefit if it were to be suspended.

Principal, 2 directors of Hong Kong charity on run over alleged HK$50 million fraud

The supervisor noted the association was smeared many years ago, saying he believed that the “misunderstanding” would eventually be clarified.

According to the association’s financial statements, its income on donations reached about HK$45 million in 2020, an increase of six times compared with the year before. A surplus has been registered each year since then.

But the college had recorded losses over the past few years. Although its donation income reached HK$950,000 in 2019-20 and climbed to HK$1.85 million in 2020-21 before falling to HK$1 million in 2021-22, it recorded respective HK$4.49 million, HK$5.53 million and HK$7.59 million losses.

Police on Thursday said the principal and two other directors of the charity were on the run after allegedly stealing HK$50 million in donations raised to support the institution’s operations.

Four other directors of the organisation, which was set up almost 40 years ago to help drug addicts, had been arrested on suspicion of conspiracy to defraud.

The Post has learned the three wanted directors are principal Alman Chan Siu-cheuk, 63, founder Lam Hay-sing, 69, and Chan Yau-chi. 62. The trio have fled the city.

Hong Kong police take down 3 fraud syndicates over attempted subsidy scheme swindle

Preliminary investigations suggested that the HK$50 million had been transferred to bank accounts in the UK and the United States, set up by the involved directors, according to police.

According to the force, the principal set up a fundraising campaign between October and December 2020 to support the operation of the college and claimed the donations received had dried up, leaving it in financial difficulties. The principal called for raising HK$300,000 a month in 2020.

But the number of donations received by the organisation was increasing, contradicting the claims made by the principal, according to police.

Although the college did receive funds from the organisation, police investigations indicated an abnormal decline in the amount allocated to the institution.

More than 300 transactions involving substantial amounts of money were recorded between 2020 and 2023 in some of the bank accounts the organisation used to collect donations, according to the force.

Hong Kong police foil transfer of HK$1.1 billion to scammers in first 10 months

The money was transferred to more than 10 other accounts belonging to the organisation, as well as three personal accounts set up by the principal and directors.

Police also discovered that around HK$50 million was transferred out of the organisation’s bank accounts to overseas destinations between 2022 and 2023.

After gathering evidence, police launched the arrest operation on Wednesday and Thursday and apprehended the four directors, all men aged from 34 to 77, on suspicion of conspiracy to defraud – an offence punishable by up to 14 years in jail.