Two Hong Kong men were arrested on Tuesday for allegedly filing bogus applications in a bid to cheat the government out of more than HK$2.5 million (US$323,000) under the subsidy schemes created to help local businesses ride out the Covid-19 pandemic.

It was the first fraud case detected by police since the government launched the first round of its multibillion-dollar coronavirus fund in March.

The two men, both aged 48, were arrested in separate flats in Kwun Tong and Kowloon City. Police said they believed they were not part of a larger syndicate.

The men allegedly submitted bogus documents to apply for schemes intended to benefit retail stores, beauty parlours, massage establishments and party rooms.

A total of 41 applications were filed in all, involving about HK$2.54 million in subsidies, according to police.

Initial investigation showed the shops the two suspects claimed to be operating did not exist, according to police inspector Lau Ka-ming of the Commercial Crime Bureau’s fraud section.

But Lau declined to discuss further details of the case, saying investigations were still under way and that more arrests could follow.

“The government relief fund is to help ease the burden of those businesses and people affected by the epidemic. For those who want to cheat the government money, police will conduct deep and thorough investigations and bring them to justice,” he said.

The government has earmarked HK$5.6 billion for its retail sector subsidy scheme. Each eligible retail store can receive a one-off subsidy of HK$80,000.

Under a separate HK$1.1 billion subsidy scheme, beauty parlours and massage establishments are eligible for one-off allowances of up to HK$100,000, depending on the number of workers hired, while qualified party rooms can access HK$40,000.

On Tuesday, a government spokesman said the scheme for beauty parlours, massage establishments and party rooms had received more than 14,000 applications. About 9,000 had been approved, involving about HK$370 million in subsidies.

“During the vetting process, the secretariat referred individual suspected cases of fraud to the police force for follow-up as appropriate. The secretariat will fully assist in the relevant investigation,” the spokesman said in a statement.