The Goldbullion Scam

Four directors plead not guilty to 796 money laundering charges (Updated). By The Star

 

This is actually another MLM Scam.

 

In The Goldbullion scam, individuals were approached or invited to invest in gold bars (gold bullion) of one kilogram each. No physical goods change hands at all. The promoter acts as the custodian for the gold bar.  Investor pays for the gold bar based on prevailing market price. As long as the gold bar is in the custody of the promoter, a return of 3.75% per annum is paid to the investor, based on the value invested. The investor can liquidate the investment at the prevailing gold price, with cash settlement.

 

I was approached by a promoter sometime ago. I asked a couple of questions.

 

1)     Where is the earning derived from?

2)     When an investor makes a profit from the gold price difference, where is the profit derived from and who pays the profit to the investor?

 

The promoter sells the gold bar to you and acts as your custodian, without charging any custodian fees,  and yet pays you a return of 3.75%. How much can the promoter earn by just selling the gold bar to you? Can he afford to pay the return he promised?

 

Don’t you think this is fishy? Don’t you smell rats?

 

Malaysians are really gullible and greedy. As a result, Malaysia is fertile ground for all these MLM scams. A heaven!

Scam after scam are being exposed and promoters prosecuted, but there is no shortage of greedy Malaysian investors to feed the scams.

 

You can call them gullible, greedy, stupid or moron. One thing is for sure, scams will still thrive in Malaysia.

 

BY M. MAGESWARI

KUALA LUMPUR: Three directors and a former director of gold investment scheme company Genneva Sdn Bhd pleaded not guilty Thursday to a total of 796 money laundering charges involving millions of ringgit.

Ng Poh Weng, 60, is facing 263 money laundering charges involving RM185 mil while Marcus Yee Yuen Seng, 58, faces 234 charges involving RM153mil.

Chin Wai Leong, 34, faces 210 charges involving RM212mil while Liew Chee Wah, 56, faces 89 charges involving RM31mil.

The four were alleged to have issued and cashed 364 cheques from illegal proceeds at a bank in Jalan Ampang here, between July 20, 2007 and Dec 6 last year.

According to a Bank Negara senior official, the cheques were used for various offences, including buying gold, payment to investors and remitting cash to their company's branches abroad. The official said RM20mil in cash and RM3mil in gold belonging to the Kuala Lumpur-based company have been frozen.

When the charges were read to the four in dock Thursday, they appeared composed.

DPP Mohd Haziq Razali applied to the court to set bail at RM4mil for each accused, saying the offences were non-bailable and involved a higher transaction.

Pleading for lower bail, lead counsel K.K. Wong, who acted for Ng, Yee and Chin, said his clients were willing to report to the Bank Negara investigating officer once a month pending disposal of the case.

Wong said since Bank Negara had also frozen their personal and company accounts, there was no risk of them fleeing the country.

"The company has business dealings in Singapore, Hong Kong and the Republic of China," he said, adding that if the accused could not post bail, it would result in the "death" of the three companies abroad and affect their 2,000 clients.

Lawyer Keppy Wong, who represented Liew, said his client had resigned from the post last March and has no previous convictions.

He said Liew had co-operated with Bank Negara since investigations started last year.

Sessions Court judge Rozana Ali Yusoff set bail at RM1mil in two sureties for Ng, Yee and Chin and allowed RM800,000 bail for Liew, saying that it was in view of the rampancy of such offences.

She ordered the four to surrender their passports.

The judge also allowed for a joint-trial and set Nov 16 for mention.

MLM Scam . What a dirty headline to read.

Another MLM SCAM in the form of Seaweed Farming.  Investors file suit against the promoter for RM26m refund.

 

This scheme is no different from those investment lots in properties, Sunshine Empire, Café franchise chain, Swisscash and Goldbullion.

A few UK, Canadian and USA companies are selling share(lots) in property,  pending development order, with the promise of huge return. Basically, they purchased a piece of cheap agricultural land in some remote area and promise the investors of high potential in value appreciation, once the land is converted to residential or commercial use. Investor does not get a title document. Just a piece of useless paper of purchase.  UK Land has been declared bankrupt. A few players are still operating in Malaysia, after being raided by Malaysian Central Bank(Bank Negara Malaysia). 

I smell rats. See the earlier post.

 

There are simply too many gullible Malaysians with lots of cash to submit to these schemers.  Greed played a big part in them. They only cried foul after they have lost money. Otherwise, they keep on promoting to their friends and relatives. 

Easy Money is Dirty Money. Remember this.

(Sep 30, Kuala Lumpur) -  Seven investors in a seaweed business representing 2,000-odd investors in Perak who claimed to have been deceived to invest in the venture since 2007, today filed a suit at the High Court here to get a full refund of their investment totalling RM26 million.

They named four companies, Fresh Palms Sdn Bhd, A.K United Sdn Bhd, Genuine Starlight Sdn Bhd and Loyal Sunrich Sdn Bhd, and two individuals P.G.P Nathan, 39, and Choi Kok Peng, 45, as the defendants.

The suit was filed through the law firm of N.P Ramachandran & Associates at the High Court Registrar’s Office at 9.30am.

Nathan is a director of Genuine Starlight and Loyal Sunrich while Choi is a member of the Board of Directors of Fresh Palms and A.K United.

The seven plaintiffs — P. William Rajah, 34, Chong Pek Kuon, 36, R. Edwin, 48, Abu Bakar Maidin, 52, S. Nathan, 56, M. Gunaballan, 58 dan P.K Pathmanathan, 58 — claimed to be representing the 2,000-odd investors who had suffered losses after investing in the seaweed business, which was conducted in Semporna, Sabah.

They claimed that the fifth and sixth defendants (Nathan and Choi) had cheated them by claiming hefty returns awaited legal investors of the venture.

They also claimed that Nathan had made a representation that each invested lot would receive a revenue three times the value of the investment within six months, with each lot initially priced at RM3,300, but was later increased to RM6,900.

The plaintiffs also claimed that investors who invested more than five lots were promised a holiday package overseas, while those who introduced a friend to invest in the venture would be given a commission.

Choi was also alleged to have promised a revenue three times the value of the investment, besides an investment certificate from VOIPCOM USA Inc, a United States-based company which allegedly agreed to carry out the project.

The plaintiffs claimed that because of the assurance given by the defendants, they had invested a total of RM25,826,800 between February 2007 and November 2008.

They are now seeking a full refund of the investment money, eight per cent interest, costs and other relief deemed fit by the court. — (Bernama) September 30, 2010 (Malaysian Insider)

Money Game - Jazmeen (M) Sdn Bhd

Many MLM companies are moving away from the traditional MLM channel of distribution. Some are in dubious business of "getting rich quick" scheme. The recent raids by Malaysian Central Bank (Bank Negara) is the proof of the rampantness of such activities and the number of greedy peoples supporting such scheme. 

There are still people whom believed that such schemes are legitimate investment. They still do not understand where the earnings are derived from. 

I just do not believe there are still so many gullible people. Recently, I met a professional with a master degree in finance. Although he lost money under the Swisscash scheme, he still believe that the scheme is genuine. He blamed Bank Negara for raiding and closing down the company. He claimed that he would not have lost money, if Bank Negara did not close down the company.

Even learned and professional Malaysian can be so gullible. Whats more with the uneducated or lowly educated people. See the latest news from the Star.

Wednesday July 28, 2010

Bank Negara seeks to nab five in get-rich-quick schemes

By TEE LIN SAY
linsay@thestar.com.my

KUALA LUMPUR: Bank Negara is seeking to arrest five individuals who are suspected of operating get-rich-quick schemes.

The five individuals are Dahlan David bin Abdullah, Ramunatul Aida binti Rahmat, Abd Halim bin Rafii, Abdul Halim bin Che Ismail and Harun bin Mat Saat. They are all believed to have commited crimes involved in illegal deposit taking and money laundering.

“They are operators of illegal schemes. They held positions of director in their respective companies. We believe they are all still in the country,” said a source who is investigating the case.

Illegal deposit taking falls under the Banking and Financial Institutions Act 1989 while money laundering falls under the Anti-Money Laundering and Anti-Terrorism Financing Act 2001.

Dahlan David and Ramunatul were respectively chief executive officer and director of Jazmeen (M) Sdn Bhd.

In a 2007 note to investors, Dahlan said “... Jazmeen is a platform and avenue for people to invest, save and earn a profitable monthly return, as we are growing by the numbers. My goal is to turn Jazmeen into an international business conglomerate”

Abdul Halim bin Che Ismail was a director in Silver Coin Resources Sdn Bhd while Abd Halim bin Rafii was in Syarikat Eastana Farm Industries Sdn Bhd. Lastly, Harun was in Pan Phoenix Dina Sdn Bhd.

Bank Negara is offering rewards to members of the public for information that leads to the successful arrest of these individuals. In March, a task force, helmed by Domestic Trade, Co-operative and Consumerism Minister Datuk Seri Ismail Sabri Yaakob, was formed with Companies Commission of Malaysia (CCM) chief executive officer Datuk Azmi Ariffin.

Azmi also presides on the working committee that consists of other regulators such as Bank Negara, police, the Securities Commission of Malaysia and the Cooperative Commission of Malaysia.

Last month, the task force obtained a conviction against Grand Merger Resources Enterprise for illegal cash transaction under the Kootu Fund (Prohibition) Act. The other cases, relating to illegal interest schemes against Island Red Cafe and Golden Nest Sdn Bhd under Section 84 of the Companies Act, are pending trial in court.

In May, Bank Negara started investigating The Gold Label Sdn Bhd for suspected illegal deposit-taking and money laundering activities.

The central bank raided the company’s premises in Northpoint Offices, Tower A Mid Valley City, Kuala Lumpur yesterday, following complaints received from the public.

Relevant assets and documents were seized for purpose of investigation. A global economic crime survey in 2009 found that nearly half of the financial crimes were committed by middle managers as a result of the economic downturn which had affected many organisations.(Source The Star)

Amendment to Direct Selling Act 1993 (Malaysia)

Amended Direct Sales Act 1993 (Malaysia)

Datuk Seri Ismail Sabri Yakcob

KUALA LUMPUR (June 8, 2010): Amendments to the Direct Sales Act 1993, aimed at ensuring a more ethical direct selling business, are expected to enhance traders and investors' confidence on business prospects in Malaysia.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yakcob said the ministry was also confident that the proposed amendments would curb unscrupulous practices through the pyramid scheme in the direct selling business.

The act was being amended to protect consumers' rights and interests, encourage growth and development of ethical direct selling activities and to ban all form of business using the pyramid and get-rich-quick schemes, he said when tabling the Direct Sales (Amendment) Bill 2020 for its second reading in the Dewan Rakyat today.

Ismail Sabri said the proposed amendments would also see an increase in penalty against offenders, including a higher fine fine of between RM1 million and RM10 million on companies found to promote or carry out business using the pyramid scheme.

For individual offenders, the fine will be between RM500,000 and not more than RM5 million or jail not exceeding five years or both, for the first time offender. --  Bernama.

How sincere and effective is the proposed amendment in policing the direct selling business in Malaysia?  The Ministry cannot police the industry effectively with the licenced players. What more to say about those illegitmate MLM companies?

Some licenced MLM companies with AJL number proudly printed on all business documents and forms. Their business are sactioned  and supported by other Ministers in their official launches. But these companies blatantly violated the DSA.

Just look at some of the application form for distributors and direct sellers and their sales invoices. Read those fine prints at the back or on the bottom before the doted line for applicants signature. Complaints were lodged with the Ministry. As usual, no action taken, especially for those crooked MLM companies with political connection.


Isn't this all hot air about protecting consumers?

Sample of these forms will be posted later.

Independent Business Owner (IBO)

I was an Amway distributor 30 years ago. My upline DD (Direct Distributor - a rank in Amway marketing plan) always remind me not to display the products at any commercial outlet.

Many part-time Amway distributors were coffee shop operators, dhoby shop operators, tailors or sundry shop owners. They displayed Amway products in their shops. Amway warned those distributors and threatened to terminate their distributorship. The reason being the shop owners have a competitive advantage over other distributors without a retail outlet.

Some MLM companies still practise this policy

My brain was conditioned by my upline that the key feature of the Amway business is “doing your own business without any overhead cost”. That means a distributor does not incur any stock holding cost and no fixed cost to pay every month. Sound great isn’t this? But in reality is this practicable?

Is MLM direct selling still running on the same principles today?  I am afraid not.  Today’s distributors are not on level playing field.

They have deviated from the original MLM concept.

 

Most MLM companies have started having retail outlets. Some of these retail outlets belong to the MLM companies, while others are distributor-owned. Some distributors open their own retail outlet on their initiative.  Some are stockist outlets.  
There are also distributors whom are compelled by the MLM companies to open retail outlets. These MLM companies discriminate the distributors with commission structure.

Is MLM direct selling dead?  Looks like it is heading to that direction. In the early day of MLM business, AVON was the only direct selling company operating via the franchised boutique store. They are the single-level marketing (SLM) company.  More and more established MLM companies are following the AVON concept by opening retails outlet directly or through their distributors.

These outlets are called Independent Business Owner (IBO), Franchise Business Owner (FBO), Franchise Stores or Distribution centres. You can called them by whatsoever name you may so choose but in substance these are retail outlets. 

The home party system by Tupperware, has also joined the bandwagon.

The key difference between conventional proprietary retail outlet and the IBO or FBO is that you are subjected to control by the MLM companies. MLM companies controlled the products you can sell, the price you can sell and the profit you can make. And your profit is your commission and you are still at the mercy of the MLM companies to pay you. Why there are still so many suckers around?

The true Independent Business Owner is  your neighbourhood papa-mama store.

Some of these MLM IBO or FBO operates a “side business” to re-coup the fixed cost. You would not be surprise to find foot reflexioloy, massage, facial treatment, manicure and pedicure, café, hair dressing and food business being transacted side by side.

The saying that the MLM companies keep shifting the goal post while the game is in progress is very true. The IBO and FBO earn higher commission for the same product sold, as compared to those without a retail outlet. Who can say the business is on level playing field?

The Myths of MLM is being challenged further.

See the picture of the MLM retail outlets of  Zhulian, Cosway, Elken and  Sunrider.

Did you notice a small piece of flyer sticked on the glass door of the shop? Most of these shops offer services like facial treatment, manicure  pedicure, foot reflexiology etc to supplement their revenues.