MLM investment scheme allegedly defrauds over 2,000 investors, S$23 million involved

·Senior Reporter
·2 min read
MLM investment scheme allegedly defrauds over 2,000 investors, S$23 million involved. (PHOTO: Getty Images)
MLM investment scheme allegedly defrauds over 2,000 investors, S$23 million involved. (PHOTO: Getty Images)

SINGAPORE — A company allegedly passed off a multi-level marketing scheme as a legitimate investment venture, scamming more than 2,000 investors for over a year and chalking up over US$17 million (S$23.12 million) in liabilities.

The Singapore-incorporated Singliworld was said to have been headed by two Malaysians, Leong Koon Wah, 49, and Ng Kuan Chuan, 35. They are on trial for running the "fraudulent scheme" from March 2014 to May 2015.

Prosecutors argued at the start of the two men's trial on Monday (28 March) that the pair managed to lure thousands of hopeful investors into putting their money into Singliforex, an investment scheme which promised that a team of professional traders would use the funds to trade in “currency pairs” on the world’s forex markets.

Promised high returns

The scheme purported to generate trading returns as high as 13 per cent a month and conservative returns of as low as 2 per cent in some months, hence appearing both attractive and realistic at the same time, prosecutors said. Two foreign-incorporated companies masquerading as trading brokerages – Triumph Global and Union Markets Limited – were also part of the scheme. Triumph Global was Hong Kong-incorporated, while Union Markets was incorporated in New Zealand.

Leong, a Singapore permanent resident, was the managing director of Singliworld from its incorporation in December 2012 and was also a registered director of Triumph Global from 9 December 2014 to 17 July 2015.

Ng was the registered director of Triumph Global from 21 January to 3 October 2014, and was also a director and shareholder of Singliworld HK since early September 2014. He was also involved in the management of Union Markets.

The duo were jointly responsible for running Singliforex, with Leong in charge of marketing operations and soliciting investors while Ng was responsible for managing the staff of Triumph Global and for operating the software used for trading, according to court documents.

In early 2014, Singliworld started soliciting investors for its Singliforex scheme. Investors were expected to fund accounts with either Triumph Global or Union Markets and were not allowed to conduct their own trades but hand them over to professional traders.

These traders and forex trades did not exist, argued prosecutors, and investors were sent false statements that showed trades had taken place.

Pyramid scheme

Singliforex was also an illegal pyramid scheme, in which investors could make money by bringing in others through a rebate structure.

"By virtue of its multi-level marketing incentive structure, the scheme – which began with only a handful of investors – eventually experienced an exponential explosion in its growth. By May 2015, more than 2,000 investors had been defrauded, and Singliworld’s liabilities exceeded US$17 million," said prosecutors.

The trial continues on Tuesday.

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