Two more individuals charged by ICAC for roles in $3.2m ‘ghost worker’ payroll fraud

The ICAC today (June 20) further charged a supermarket chain manager and an employee of a contractor with conspiracy to defraud upon receipt of further legal advice from the Department of Justice (DoJ), following defendants, who were charged earlier, indicated to plead guilty and render assistance to the prosecution. An employee and three contractor staff of the supermarket were previously charged for allegedly conspiring together to deceive the supermarket into releasing wages totalling over $3.2 million in a span of two years by falsifying attendance records of “ghost workers”.

In October last year, four defendants were charged with one count of conspiracy to defraud, contrary to Common Law. They were Lau Kin-pong, former senior supervisor at eCommercial Distribution Centre (EDC) of PARKnSHOP (HK) Limited (PARKnSHOP); Tai Kin-man, former assistant manager of Earnward Warehouse Limited (Earnward Warehouse), a contractor of PARKnSHOP; and Wong Wai-fung and Wong Pak-kan, both former workers employed by Logistics Network Management Limited (Logistics Network), another contractor of PARKnSHOP.

Upon receipt of further advice from the DoJ, following the guilty plea indications of some of the defendants and their assistance rendered to the prosecution, the ICAC today further charged Cheng Cheuk-kei, 42, former warehouse operations manager at EDC of PARKnSHOP; and Lau Tsz-pan, 27, former worker of Logistics Network, with one count of conspiracy to defraud.

The duo were released on ICAC bail, pending their appearance at the Shatin Magistrates’ Courts next Tuesday (June 24). The prosecution will apply for transferring the case to the District Court.

EDC of PARKnSHOP was responsible for sorting online orders and packing goods for distribution to customers. At the material time, Cheng was a warehouse operations manager at EDC; Lau was his subordinate senior supervisor responsible for administrative duties of EDC.

PARKnSHOP hired Logistics Network to provide workers for EDC, including Lau, Wong Wai-fung and Wong Pak-kan. Workers were required to clock their time cards when reporting duty and getting off work, and to sign on a daily attendance sheet to verify their on-duty time. While the operation of Logistics Network was supervised by Earnward Warehouse, its assistant manager, Tai, was responsible for verifying attendance of workers.

The charge alleges that between June 2019 and April 2021, Cheng and Lau, who were newly charged, had allegedly conspired together with the four defendants previously charged to defraud PARKnSHOP by falsely representing to PARKnSHOP the attendance records and workings hours of 13 workers of Logistics Network, thereby inducing PARKnSHOP to release wages of over $3.2 million to the workers.

The ICAC investigation arose from a corruption complaint. Enquiries revealed that the defendants had used a clocking machine of the same model used by EDC to fabricate the attendance records of the 13 “ghost workers”, and equally shared the gains after deceiving the wages. At the material time, the “ghost workers” had never worked at EDC and they had not received any wages.

PARKnSHOP, Earnward Warehouse and Logistics Network have rendered full assistance to the ICAC during its investigation into the case.