MLM Investment Scheme Has Accumulated S$23 Million Liabilities
SINGAPORE — A firm allegedly passed off a multi-level marketing scheme as a legitimate investment business, scamming more than 2,000 investors for more than a year and racking up more than US$17 million ($23.12 million Singaporeans) passive.
Singliworld, a company incorporated in Singapore, was reportedly run by two Malaysians, Leong Koon Wah, 49, and Ng Kuan Chuan, 35. They are on trial for leading the “fraudulent scheme” from March 2014 to May 2015.
Prosecutors argued at the start of the two men’s trial on Monday (March 28) that the couple successfully enticed thousands of hopeful investors to put their money into Singliforex, an investment program that promised a team of professional traders would use the funds to trade in “currency pairs” in the global forex markets.
High returns promised
The scheme was supposed to generate trading returns as high as 13% per month and conservative returns as low as 2% in some months, thus appearing both attractive and realistic, prosecutors said. Two foreign companies posing as brokerages – Triumph Global and Union Markets Limited – were also part of the scheme. Triumph Global was incorporated in Hong Kong, while Union Markets was incorporated in New Zealand.
Leong, a permanent resident of Singapore, was chief executive of Singliworld since its incorporation in December 2012 and was also a registered director of Triumph Global from December 9, 2014 to July 17, 2015.
Ng was a registered director of Triumph Global from January 21 to October 3, 2014, and has also been a director and shareholder of Singliworld HK since early September 2014. He has also been involved in the management of Union Markets.
The duo were jointly responsible for the management of Singliforex, with Leong in charge of marketing operations and investor solicitation while Ng was responsible for managing Triumph Global’s staff and operating the software used for trading, according to court documents.
In early 2014, Singliworld began soliciting investors for its Singliforex program. Investors had to fund accounts with Triumph Global or Union Markets and were not allowed to make their own trades but outsource them to professional traders.
These forex traders and transactions did not exist, prosecutors argued, and investors received false claims showing that transactions had taken place.
Singliforex was also an illegal pyramid scheme, where investors could make money by bringing in other people through a rebate structure.
“By virtue of its tiered marketing incentive structure, the program – which began with just a handful of investors – eventually experienced an exponential explosion in growth. By May 2015, over 2,000 investors had been defrauded and Singliworld’s liabilities exceeded US$17 million,” prosecutors said.
The trial continues on Tuesday.
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