7 Infamous Investment Scams in Singapore & How You Can Avoid One


  • 7 Infamous Scams In Singapore
  • Checklist for Detecting Scams

1. Introduction
Cases of investment scams are on the rise. Here are 7 infamous Investment Scams in Singapore. Be careful not to fall for seemingly ‘too good to be true’ investment schemes!

1.1 Sunshine Empire Ponzi Scheme


Source: Asiaone

In 2006, thousands of Singaporeans invested in approximately 26,000 lifestyle packages, which ranged from $240 to $12,000. The company lured investors by offering packages that would pay out rebates monthly, with an overall return of 160% of their initial investment within 1 year.

For example, an investor who bought a Gold package worth $12,000 could end up with total payout of $19,200 after 15 months. Sunshine Empire paid their older investors from the money they got from new investors.
In 2007, authorities raided the company and only managed to recover $21million out of the $190million from unsuspecting investors.

1.2 Genneva Gold & Valiant Capital Scam


Source: thestar.com

In 2010, investors bought into a Gold-buyback scheme with Singapore based company, Genneva Gold and Valiant Capital.

In the same year, Mr Simon Goh, previously a relations executive of Genneva Gold sold investors 1kg of Gold bar for about $60,000 with a promise of receiving $1500 monthly dividends. The company was raided by authorities in 2012.

Mr Goh then proceeded to set up another company called Valiant Capital in 2013 with the same Gold-buyback scheme. Valiant Capital soon stopped paying monthly dividends to its investors after several months.

It was revealed that 10,000 investors had lost their money to Genneva Gold and about 300 investors had lost their money to Valiant Capital. Mr Goh has been uncontactable ever since.

1.3 Gold Guarantee Scam


Source: btinvest.com

In 2012, a similar gold buyback scheme by a Singapore based company, Gold Guarantee had scammed hundreds of investors.

Gold Guarantee sells gold to customers and lured them by offering discounts. When the date of the contract is up, customers have the choice of selling the gold back to the company at a return of 100%.

The main difference between Genneva and Gold Guarantee is that Gold Guarantee limits their daily gold transaction, creating an illusion of scarcity. Investors have to pay a booking fee of $2/gram to purchase gold from them.

In 2013, Lee Song Teck, Founder of Gold Guarantee ran away with investor’s money and he remains uncontactable till date.

1.4 EcoHouse Property Development Scam


Source: todayonline.com

In 2011, about 2000 investors globally, including 800 investors from Singapore invested about $65million into EcoHouse. EcoHouse is a London-based company which falsely claimed that they were working with the Brazilian government to develop housing for the less fortunate people of Brazil.

Investors were then asked to invest at least $47,150 to help fund EcoHouse’s property developments with the promise of getting 20% fixed rate of return per year. However, investors did not receive any payments after investing.

Hundreds of Singaporeans are still looking to reclaim their losses.

1.5 Tropical Forestry Ventures Investment Scam


Source: Ecotechalliance

In 2013, about 70 investors which included Singaporeans and foreigners invested a range of $5,000 to $60,000 into Tropical Forestry Ventures(TFV), a firm based in Singapore.

Investors were induced to buy saplings and semi-mature trees which could be sold for up to 700% once they were fully grown a couple of years in the future.

After investors bought the saplings and semi-mature trees, TFV was shut down and was taken over by Tropical Forestry Assets Management(TFAM) which asked for top-ups from investors to maintain or upgrade their trees before they could be sold for profit.

Investors paid the balance amount to TFAM but was later told that the amount was for a new batch of trees and not for the previous batch under TFV. TFAM denied any relations with TFV.

Affected investors have made police reports and the case is still under going investigation.

1.6 Suisse International’s Gold Buyback Scam


Source: Singapore.coconuts.co

In 2015, 250 investors were victims of another gold buy-back scheme. They invested approximately $35million in a gold buyback scheme with Suisse International but claimed that they did not receive their promised monthly payouts.

The company would present themselves in a genuine light by allowing investors to take the physical gold home. Investors were lured by the promise that the company would buy the gold back at the original price regardless of the fluctuation of market prices.

Furthermore, investors expected a monthly payout of $1,000 for every kilogram of gold purchased, which is a return of about 20%. Investors were also given further discounts when they referred their friends to the scheme.

1.7 Keystone Trading Offshore Betting Scam


Source: bandt.com

In October 2016, 20 Investors invested approximately $1million into Keystone Trading, an offshore arbitrage betting company and were promised returns of up to 10% every month, but they were not paid a single cent.

The program was ran by a Singaporean man, Mr Alvin Ang who claimed that his boss named Sky had ran away with the money and promised investors to look for him. He further assured investors that the betting programme was legal as the bets were placed overseas.

Police reports has been lodged against Mr Ang and Mr Ang became uncontactable ever since.

2. Checklist for Detecting Investment Scams

2.1 Sounding Too Good to Be True
It is highly risky for any investment vehicle to promise that you will receive extraordinary returns. Be aware of investment schemes that claim that you will be able to make “HUGE upside with little to NO RISK!”. Do note that all forms of investments come with some form of risks.

2.2 High & Guaranteed Returns
The reference point you can use is the investment return Warren Buffett has generated for his company, Berkshire Hathaway. In case you are not aware who is Warren Buffett, he is currently the 3rd richest man in the world and is known as The Oracle of Omaha. His return is about 29% per annum bearing in mind that he is the greatest investor of all times.

So if you across anyone who said that they can promise you returns that is close to what Warren Buffett is getting or even higher that what he is getting, it should be a red flag for you.

2.3 Pressured to Take Action Instantly
Scammers often tell investors that their scheme is a once-in-a-lifetime offer, which creates urgency and a tendency for investors to react impulsively.

2.4 High Pressure Sales Tactics
Scammers usually try to make you have negative feelings about yourself if you choose to say No. It is important that once you realize this, leave immediately. Scammers rarely care about your needs when pressuring you to invest, even if they do, it’s usually just a facade. Never tolerate sales pressure when investing. Sleep over it and think it through carefully. You may also discuss with your friends who are seasoned investors.

2.5 They Are Found in the MAS Alert List
Before investing your hard earned money, it is wise to always do your own research on both the company and the person selling the scheme. Thoroughly understand how the company make money by providing such schemes by asking the presenter. If the presenter does not know or the way they make money don’t make sense. Stay away!

You can also search the company on MAS Investor Alert List http://www.mas.gov.sg/IAL.aspx?sc_p=A, which provides a list of unregulated companies which may have been wrongly perceived as being licensed or authorised by MAS. The list will be updated regularly. Please exercise caution when dealing with these companies.

Overall, Warren Buffett has always advise investors that the Investing Rule #1 is Never Lose Money, and Investing Rule #2 is Refer to Rule #1.

Do note that the money you have right now is gained through your hard work and it took you years and lots of sweat to have what you have today.

If you want to know How to Invest Safely and Intelligently, click on the picture below to join our Free Value Investing Masterclass or <<CLICK HERE To Register>>


Geraint Liu
Research Analyst, Mind Kinesis Value Investing Academy

Disclaimer: Please note that all information stated in this article is just for education purpose only and should not be used as any form of recommendation or advice.

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