Mak Chai-kwong and Tsang King-man guilty of housing fraud
Judge accepts that cross-leasing was not illegal but officials' deal was 'bogus'
Former development minister Mak Chai-kwong and assistant highways director Tsang King-man were convicted yesterday of defrauding the government out of HK$700,000 in housing allowances.
In a convoluted arrangement, the men entered into a "bogus" cross-leasing deal whereby they actually owned - or had a financial interest in - the flats they said they were renting.
Mak is the highest ranking government official to be found guilty of a criminal offence since the handover.
Before handing down his verdict, District Court Judge Johnny Chan Jong-herng said: "Mak and Tsang each knew that the means they employed were dishonest, that they had a financial interest in the flat [they were renting] and hence were not entitled to [the Private Tenancy Allowance]."
Mak, 62, was charged with two counts and Tsang, 57, with three counts of using documents with intent to deceive the government. They were convicted on all counts.
Mak stepped down just 12 days after being appointed development secretary last July after the media exposed the scam.
The prosecution said that Mak and Tsang were the actual owners of City Garden flats that they rented to each other in 1985. They leased them in their wives' names to conceal their financial interest. It was illegal for civil servants to apply for allowances for a flat in which they owned or had a financial interest.
