HARRISBURG, Pa. (AP) -- A grand jury says two of Pennsylvania’s tax credit programs are vulnerable to fraud, citing newly unsealed allegations that two people 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 Tuesday and issued a report that found “systemic deficiencies” in the state’s Keystone Innovation Zone and Pennsylvania Research and Development tax credit programs.

The report proposes that applicants should be audited, applications should be verified and the laws should be changed to give regulators more time.

(Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)