HARRISBURG, Pa. (AP) — A grand jury report released Tuesday found two of Pennsylvania’s tax credit programs are vulnerable to fraud, citing newly unsealed allegations that a couple disappeared in Hong Kong after using bogus front companies to obtain state tax credits they resold for millions of dollars.

The state attorney general’s office announced charges against them and issued the report that found “systemic deficiencies” in the state’s Keystone Innovation Zone and Pennsylvania Research and Development tax credit programs.

The report proposed that applicants be audited, applications verified and laws changed to give regulators more time than three months they currently have to check into applications.

The jurors also said the “tax brokers” who sell credits to third parties on commission ought to be licensed and trained, and that tax credit recipients should have to show how the money has been used.

The two programs are designed to foster investment, including around colleges and universities. The tax credits can be sold at a discounted price, providing the original applicant with an infusion of cash and buyers a way to reduce their own tax bills.

Pennsylvania devoted $618 million over 2003-17 to the Research and Development tax credit program, designed to boost business growth. There were 1,344 applications in 2017, and nearly all were approved.

“We learned that there were no requirements that photographic identification be supplied, that in-person interviews or site visits be conducted, or that applicants submit expenditure receipts, account statements or actual day-to-day financial records” beyond state tax returns and a federal form, the jurors said.

The $15 million annual Keystone Innovation Zone program targets 28 regions where the state wants to encourage for-profit entities that are less than 8 years old in such fields as advanced materials, life sciences or high-tech.

Local economic development agencies provide coordinators to ensure the work is being done within the designated zones, but the grand jury said there were questions about how effectively that verification is performed.

Some of those local coordinators “simply did not understand the magnitude of their role” in checking into the grant recipients and thought of it as less important than their other responsibilities, the jury said.

The grand jury alleged that 20 bogus companies were set up, often using mailbox services storefronts, to apply for tax credits by Wing Tat Chiu and Ivy Hiu-Ying Li. The couple, originally from Hong Kong, married in 2000 after studying at Michigan State University.

Chiu and Li lived in the Philadelphia suburb of Bucks County when first applying for both types of tax credits for apparently legitimate companies a decade or more ago.

“By 2012, however, the couple had apparently realized that they could make money more easily by securing credits illegitimately,” and the alleged tax credit scam became their business, the jurors alleged. Neither of them has returned to the United States from Hong Kong since 2016. State prosecutors said they did not know if either is represented by a lawyer.

Attorney General Josh Shapiro said the suspects “exploited the inadequacies of the application and award processes, directly harming Pennsylvanians in the process.”

“Their ill-gotten gains were deposited into bank accounts in Hong Kong and were never used to benefit the Commonwealth,” Shapiro said. “These systems must be fixed.”

They received $10.6 million in tax credits between 2012 and 2017 and were able to sell $6.4 million of that amount, authorities said.

“The brokers were eager, even if not illegal, participants in the process,” the jurors wrote, citing evidence brokers pressured state regulators to award the money and did not notify the state of concerns, even when brokers were repeatedly directed to wire proceeds of tax credit sales directly to accounts in Hong Kong.

The state Revenue and Economic Development departments, which administer the programs, noted that Revenue first alerted the attorney general’s office to the fraud. The agencies outlined a number of changes they have implemented to prevent it from recurring.

Some of the other recommendations, the state agencies said, will require action by the General Assembly.