Sisters caught for pyramid scheme cheating 7 investors out of 3.69 million patacas

2020-10-09 02:57     Comment:0

Two sisters were arrested on Wednesday for running a pyramid investment scheme that cheated investors at least out of 3.69 million patacas, Judiciary Police (PJ) spokesman Choi Ian Fai said at a special press conference yesterday. 

The two suspects are surnamed Cheong. The elder sister aged 62 owns a hair salon while her sister aged 55 told the police that she is jobless.

According to Choi, seven local residents – six females and a male aged between 35 and 73 – reported to the police in March that they had been defrauded by three women, with their respective losses ranging from 47,000 patacas to 1.5 million patacas, amounting to a total loss of 3,692,900 patacas.  

According to Choi, the victims told the police that they had been cheated by the three women who claimed that they were agents for Macau to promote property development projects by a company called SKY in Malaysia. 

The three women had held investment seminars in Macau in 2017 claiming that invested money could be recovered within seven months and that the rate of return (RoR) was 320 percent in one to two years. The female trio also persuaded the septet that they could also earn additional money by recruiting other investors.

The victims told the police that they either handed cash to the trio or transferred the money from their bank accounts in the mainland to the suspects’ accounts there. The three women claimed that they would convert the money they received from the seven investors into US dollars to invest in the property development project in Malaysia.

The victims also told the police that the suspects had arranged to open online accounts for them to check their investments online. However, the accounts did not show the invested amounts. Instead, they used a points system, Choi said.

According to Choi, the victims told the police that starting in early 2018 they were unable to log into their accounts. The three suspects told the seven victims that the investment project had changed its development plan and that the company was going through an acquisition process.

From early 2018 the victims were not able to log into their accounts anymore or withdraw any money, while the suspects told them the acquisition process had been delayed.

Cooperation with mainland police, Interpol  

According to Choi, PJ officers early this year contacted the Public Security Bureau (PSB) in the mainland and requested they provide information on the victims’ mainland bank accounts. The information provided by the mainland police confirmed that the victims had transferred varying amounts of money into the three suspects’ accounts in the mainland. Concerning some of the victim’s cash payments to the suspects, Choi said the police were still investigating. 

‘According to Choi, PJ officers arrested the two sisters on Wednesday in the northern district and Taipa respectively. They admitted that they assisted in promoting the Malaysian company’s investment project among potential investors in Macau. However, both claimed that they had transferred the seven investors’ funds to “senior level” members of the investment project in Malaysia. 

The Judiciary Police seized a number of notebooks containing information about the investments. PJ officers are looking for the third female suspect involved in the case who was still on the run at the time of yesterday’s press conference, according to Choi, who added that the Judiciary Police are continuing their cross-border investigation in cooperation with other law enforcement agencies as well as Interpol, looking for more possible suspects. 

The duo were transferred to the Public Prosecutions Office (MP) yesterday, facing charges of fraud and pyramid sales, facing for each charge between two and 10 years behind bars, according to Choi.

A law enacted in 2008 specifically bans pyramid scheme sales in Macau (Law No. 3/2008)

The Judiciary Police urged other residents who participated in the Malaysian investment pyramid scheme or similar cases to report to the police as soon as possible.

According to the Legal Information Institute (LII) of Cornell Law School, a pyramid scheme is an unsustainable, illegal business model where investment returns are typically from principals of investments or membership fees instead of from the underlying investment gains. It is often marketed as a foolproof way to turn a small amount of money into big returns.

The hooded fraud suspects are escorted by Judiciary Police (PJ) officers from the PJ headquarters in Zape to a vehicle yesterday. Photos: Iong Tat Choi

Evidence seized from the suspects such as several notebooks and three smartphones is displayed during yesterday’s special press conference about the pyramid scheme case at the pressroom of the Judiciary Police (PJ) headquarters.

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