The evolution of a society is inextricably linked to technological transition, which is based on both innovation and dissemination of technologies. To protect the vulnerable new generation of technology, government subsidies are one of the most common and effective tools. However, not all subsidy policies can lead to a healthy development of market shares. Subsidy fraud is one of the most problematic issues that can arise under an imperfect system. This paper identifies an interesting subsidy fraud like phenomenon via a validated agent-based model. After analysing the mechanism of the transition of technology in the model, we drive the condition upon which subsidy fraud could occur.