Hong Kong police arrest 40 in crackdown on loan shark syndicate

“We also found the personal information of a few thousand debtors at its office.”

Lau added they had also arrested “a number of core members” of the syndicate for offences such as conspiracy to lend money without a licence, conspiracy to lend money with excessive interest rates, money laundering and conspiracy to commit criminal damage.

“Our investigation shows that they participated in loan sharking, organised illegal debt collection activities such as splashing red paint, and processing criminal proceeds related to loan sharking amounting to over HK$30 million.”

Lau said the 40 suspects, aged between 16 and 67, claimed to be clerks, construction workers, salespeople, insurance brokers and unemployed, adding that a few had triad backgrounds.

The suspects had been released on bail pending further investigation, he added.

Senior Inspector Tuen Yuk-hang of the same police unit said their investigations showed loan shark syndicates attracted debtors using phrases such as “no vetting required” or “express clearance”, or promoted their loan schemes with cold calls or text messages.

“Some people who are in financial difficulties may join these schemes hoping for a quick fix, but the so-called ‘express clearance’ is just a cover for the loan shark syndicates,” he explained.

He said the syndicate would deduct a quarter or even a third of the loan as an “administration fee”.

This fee, along with the interest borrowers were required to pay, would result in an interest rate far greater than the legal limit of 48 per cent per annum, and some even charged an annual interest rate of more than 150 per cent per, he added.

Explaining the criminals’ modus operandi, the senior inspector said they would collect debts first by using conventional methods such as phone calls or letters, but later “escalate their actions, from phone harassment to making threatening calls to debtors and their family members”.

“They would then dispatch gang members to splash red paint on the doors of debtors’ residences until they settled their loans,” he said.

Tuen also said borrowers were told to repay their loans to specified bank accounts, but many could only settle a part of the steep interest amount.

He revealed that some of the holders of those bank accounts that police had arrested were debtors themselves.

“Unable to settle their loans, they were forced to open stooge accounts for the syndicate,” Tuen said.

“Related accounts showed more than HK$30 million of deposits in the past six months, with those deposits withdrawn within a short period of time.”

Tuen said the frequent transactions did not gel with the holders’ purported employment backgrounds, and instead matched the pattern of money-laundering operations.

The deposits would be received by loan sharks through multiple transactions to conceal the money trail, he added.

Police urged the public to be wary of loan sharks, adding that syndicates might lure desperate borrowers to engage in crimes such as drug trafficking and selling their bank accounts for money laundering.

He said that in past cases such borrowers had received jail sentences for the crimes they had committed.

Lending money with excessive interest rates, money laundering, criminal damage and criminal intimidation are serious offences punishable by maximum jail sentences ranging from five to 14 years.