SINGAPORE: A court on Friday ( Jan 3 ) handed down prison sentences and a hefty penalty to two men who ran a S$ 23 million ( US$ 17 million ) multi-level marketing ( MLM) scheme that promised investors returns from foreign exchange trades.
The dome structure, which District Judge Soh Tze Bian described as “one of the most serious” cases of false investing, ran from 2014 to 2015.
About 4, 500 buyers were deceived, of whom more than 2, 400 were in Singapore. Combined loss probably exceeded US$ 13.7 million, with unrecovered loss of more than US$ 10 million, the prosecutor said.
Leong Koon Wah, 51, was the chairman of Singliworld, which offered the international trading system known as Singliforex. He also served as the director of two brokerages that allegedly executed forex trades, Triumph Global ( Asia ) and Union Markets.
The Malaysian admitted to operating Singliworld as an unregulated forex trading company and supporting a pyramid scheme after giving a guilty verdict in the trial’s 88 days.
He was also found guilty of operating unregistered forex trading companies Triumph Global and Union Markets, as well as of conducting false trading.
Judge Soh discovered that Leong was the main force behind the MLM program and was actively involved in all aspects of its creation and promotion.
He was sentenced to 10 years and six months ‘ prison, and ordered to pay a sentence of about S$ 3.66 million or provide one-and-a-half years in jail. He stated that he would not get imposing the fine.
Ng Kuan Chuan, 38, was a chairman of Triumph Global and a director at Union Markets. Judge Soh determined that he was essential in preventing the misuse of investors ‘ funds while promoting the idea of legitimate forex investing.
Ng was found guilty in a test on two counts of operating unregistered brokerages and one count of making false trading.
The Malaysian was sentenced to seven years and six months ‘ prison, and a fine of S$ 300, 000. He has filed an appeal challenging his verdict and judgment.
Investors were given the idea behind Singliforex, a system where professional traders do trade bitcoin on their behalf. Investors were informed that 70 % of the profits could be kept, and that monthly earnings on average were 7.54 percent.
Traders were required to transfer their investment funds to Triumph Global and Union Markets trading transactions. They were prohibited from doing their own trading and were locked out of the transactions.
They were even given bonuses, in the form of rebates, to attract other investors into the system.
According to Deputy Public Prosecution Nicholas Tan, Michelle Tay, and Suriya Prakash, there were no professional dealers present, and no trading deals were always conducted by the alleged companies.
The owners ‘ withdrawal requests were satisfied by paying off the recipient’s funds using Singliforex’s daily buying remarks and trading account accounts, which were false.
The MLM plan grew rapidly and swiftly, reaching at least 55 amounts of downlines. Judge Soh claimed that this could have resulted in widespread damage and made the structure extremely dangerous.
Leong placed his and his family at the top of the pyramid, leading to US$ 6.5 million in subsidies being recorded in their bank balances.
Leong cashed out by transferring US$ 2.7 million from Triumph Global’s bank accounts to his own Hong Kong bank accounts, claiming that these were subsidies owed to him. He even transferred more than S$ 500, 000 to his sister’s Singapore bank account.
Ng admitted to gaining at least US$ 300, 000 from the program, although contradictory information at test suggested a higher proportion was probable, Judge Soh found.
A “dubious” shift of about US$ 530, 000, presumably for an investment into the African Development Funding Group, was likewise made from Triumph Global to another bank account without buyers ‘ approval, according to the trial.
These misappropriations, where Leong and Ng allowed investors ‘ funds to be used to pay themselves, Leong’s wife, and the bogus African Development Funding Group scheme, demonstrated” a higher level of personal gain and a more extensive breach of trust”, the judge.
” The involvement of a family member, Leong’s wife, suggests a broader conspiracy and a more entrenched pattern of fraudulent behaviour”, he added.
He cited the sophisticated sophistication and premeditative nature of the scheme in the sentencing sentence.
The judge cited the use of technical jargon and false explanations to confuse investors, as well as” complex subject matter like forex trading.”
Additionally, the plan made use of sophisticated overseas corporate structures, including” smart shell companies” and” strategic incorporation” in New Zealand.
Leong and Ng used foreign bank accounts, legal documents, custom-built websites and promotional operations to further the illusion of illegitimacy, he added.
Judge Soh also cited Leong’s 18 years of MLM business experience as evidence of his decision to employ this model for Singliworld as evidence of a high degree of premeditation and awareness of its potential dangers and violations.
Both men were dishonest, lying in their testimony, and trying to shift the blame to each other and other people at trial, the judge noted. Both men showed a significant lack of remorse and were dishonest at the trial.
Both men tried to diminish their responsibility, and Ng was” cavalier” about the mishandling of millions in investors ‘ funds. These were aggravating factors that justified heavier sentences, he said.
Leong requested that his sentence be postponed until after the Chinese New Year. Ronnie Tan, a defense attorney, argued that Leong would be entering prison for a long time and emphasized that he kept up attendance throughout the investigations and trials.
After agreeing to report to his investigation officer three times a week until he begins serving his jail term on January 31, Leong was given the deferment with bail at S$ 300,000.
Ng, who did not have a lawyer, was granted a stay of execution on his sentence pending his appeal. His bail was doubled from S$ 150, 000 to S$ 300, 000, and he must report to his investigation officer every two weeks.