A triad-controlled loan-sharking syndicate that lent money to borrowers at interest rates of up to 670 per cent a year was broken by Hong Kong police with the arrest of 15 people in raids across the city.
Superintendent Ewing Wu Ka-yan of Kowloon East regional crime unit said the charge was more than 10 times the city’s legal interest rate of 60 per cent a year.
He said initial investigation showed at least 100 debtors had borrowed money from the syndicate, which had been in operation for at least 10 months. The total amount of loans involved exceeded HK$2 million (US$255,000).
The 13 men and two women, ranging in age from 23 to 43, were picked up in a series of raids mounted by more than 100 officers on Tuesday and Wednesday.
Nine of the suspects were believed to be core members of the syndicate that mainly targeted those who could not secure loans from banks or licensed moneylenders.
The gang usually sent advertisements to targets through instant phone messages, claiming applicants could receive loans easily and quickly even if they had no proof of income, police said.
Debtors were required to pay 20 per cent of the loan amount as an administration fee
Ewing Wu Ka-yan, police superintendent
“Debtors were required to pay 20 per cent of the loan amount as an administration fee and required to pay another 20 per cent of the loan amount in interest every 15 days” Wu explained.
The superintendent said the annual interest rate the syndicate charged debtors was as high as 670 per cent. The city’s highest legal interest rate is 60 per cent a year.
He added the gang made nuisance calls and used criminal intimidation and criminal damage such as jamming door locks and daubing threatening slogans in red paint on walls if debtors failed to pay the interest or repay their loans.
During the operation, officers seized boxes of documents including loan records, bank deposit receipts, account books and 708 grams of cannabis resin. Officers were examining the seized documents.
The loans ranged from several thousands of dollars to more than HK$20,000, police said.
As of 6pm on Wednesday, the suspects were being held for questioning and had not been charged.
Police said it was possible further arrests would be made.