Lured by promises of a 5% return, 18 investors invested a total of $2.2 million in what turned out to be a Ponzi scheme.
Some investors have doubled their investments after receiving reimbursement of their supposed returns, but this was done simply to create a false sense of security for the perpetrators.
34-year-old Wan Lai Kuan each lost up to $300,000 in the deal, which was not expected to materialize. Instead, she used the money to fund her cafe business, pay off loans, and settle her mother and boyfriend’s daily expenses.
On Tuesday (August 30), Wang was sentenced to five years and nine months in prison after pleading guilty to six counts of wrongdoing.
A further 12 charges of fraud and one charge of operating a money management business without a valid license were considered in the sentencing.
The court heard that in 2014 Wan and two partners, Chan Xuan Feng and Ang Shi Yi, founded Skycastle Capital LLP, a business that deals with money management from foreign exchange trading for profit.
Wang’s role was to conduct transactions for clients, while Zhang managed the company and introduced investors to SkyCastle, said deputy prosecutor Lee Wei Liang.
For reasons not mentioned in court, the two partners left the company by June 2015. Chan continued to refer Wan to investors after he left and was paid.
Since 2015, Wan has been reaching out to old acquaintances to pitch investment opportunities that promise a 5% monthly return on their investment.
She received between $3,000 and $720,000 from each investor. Some of them then spoke to others about investment opportunities and introduced them to Wan.
To give a false sense of security, she drew up written contracts and paid back investors several times to make them think they were receiving genuine investment returns.
This caused some investors to invest more and give her more money.
However, none of this money came from genuine investment returns, said DPP Lee, adding that Wan had no intention of managing an investment portfolio for his clients, nor did he intend to fulfill the contract. rice field.
Between March 2017 and October 2018, 10 investors filed police reports for failing to pay Skycastle their investment income, prompting the police to investigate.
It turns out that Wan tricked 18 investors into investing $2,219,000 through a Ponzi scheme. She was also spending money on her personal expenses.
She spent about $1.2 million on personal expenses, including running the cafe, paying off loans, and paying the daily expenses of her mother and ex-boyfriend Marcus Shi Wei Liang.
The DPP sought a sentence of 70 to 76 months in prison for Mr. Wan.
He added that the repayments made could not be considered repayments as they were made to induce more investment.
Chan was unaware of Wan’s wrongdoing but was fined in April this year for illegally operating in Skycastle without a license, DPP Lee said.
Skycastle has since been renamed ASDF LLP, with Wan still a partner, DPP said.
Those found guilty of misconduct can face up to 10 years in prison and a fine.