The alleged fraud involved 15 local travel firms that police said are small in scale and have operated for between two and 20 years. Fourteen of the suspects are directors and the rest are staff.
Under the scheme introduced last year, companies that operated local green tours could receive up to HK$200,000, once the Travel Industry Council (TIC) approved their applications.
The government had hoped the Green Lifestyle Local Tour Incentive Scheme could boost local tourism and help other related trades.
In the end, detectives said the TIC only granted one firm HK$50,000 last October and rejected the rest after suspecting the receipts submitted were fake.
“The TIC contacted the relevant restaurants, coach or insurance companies while it was going through the applications and they were told that that the receipts were fake”, said chief inspector Lo Yin-lam.
Lo said the force believes the travel firms involved in the case did not organise the green tours at all, as some of the restaurants people had supposedly visited didn’t even exist.
Officials said investigations were continuing and more people could be arrested.