The syndicate is believed to have set up operations in November 2022.
The arrestees were detained on suspicion of conspiracy to defraud – an offence punishable by up to 14 years in prison.
According to police, members of the syndicate first invited their targets to attend an investment seminar held at a grade A office in Kowloon Bay.
“With the lure of high returns and no risk, participants were enticed into a fraud scheme by bidding on an admission ticket of an investment talk show through the syndicate-controlled sham trading platform,” Inspector Tam Ho-yin, of the Sau Mau Ping district crime squad, said.
Tam said the bidding price for each ticket started at 100 Tether coins, which amounted to HK$780.
He said the ticket holders were then instructed to sell the ticket the next day at a mark-up price of 300 Tether coins, but they were charged with high handling fees for their bids.
As the bidding price increased, fraudsters claimed they would eventually repurchase all the tickets at an inflated price of 15,000 Tether coins, police said.
“The money supposedly won by the victims during this process actually belonged to other victims,” Tam said.
He said some victims, who made profits, introduced their family and friends to join the scheme.
The trading platform later ceased operations when the syndicate failed to find new targets to sustain the fraud scheme, leaving those who remained invested in the funds for high-interest returns with losses.
“When victims attempted to retrieve their money, scammers invented various excuses and refused,” Tam said, adding that fraudsters even demanded exorbitant administrative fees before processing any requests.
Police began investigating the scam after receiving multiple reports from the victims earlier this month.
The acting superintendent said investigations revealed the syndicate swindled at least 10 residents out of HK$5.1 million, with the largest amount taken from a single victim standing at HK$1.36 million.
Police also urged other victims to get in touch.
Officers arrested a man and a woman last Thursday after gathering evidence, before apprehending the third male suspect on Monday.
Police also seized five mobile phones, as well as HK$15,000 and 30,000 yuan in cash.
The three suspects, aged from 33 to 40, were released on bail pending further investigation.
Financial losses from deception cases went up by 89 per cent to HK$9.1 billion in 2023 from HK$4.8 billion recorded the year before.
