Singapore to close loopholes on investment schemes

From The New Paper: "MAS to close loopholes on gold buyback schemes, collective investments"

One snippet:


Programmes such as gold buyback schemes allow investors to buy physical gold at "discounted" prices, usually 1.5-2 per cent cheaper. Some entities even allow the customer to take the gold bar or gold coins home. The company then promises to buy the gold back at the original sale price, meaning consumers get to earn the 1.5-2 per cent return when the gold is bought back. There are some companies that even agree to pay consumers a monthly fixed interest. But unlike other investment products, the advertising (or prospectus) for such schemes are not regulated by the Monetary Authority Singapore (MAS). This is set to change with the new rules, which state that sellers will have to register their prospectuses with MAS before they can solicit for potential investors.


Some of the schemes (mentioned in the article) from the past that seem to have gone belly up are:

• Suisse International
• The Gold Guarantee
• Genneva
• Profitable Plots
• Ecohouse Developments

I have always been surprised why such a developed country like Singapore allows so many dodgy investment schemes. At least, now things seem to change for the better.

Hopefully Malaysia will follow suit soon, many investors there have also been hit by pyramid schemes and the likes.

And another gold scheme bites the dust ....

The modus operandi seems to look like this:

• Take a commodity that is "hot", for instance gold
• Take a business model that resembles a pyramid
• Take a term from a country that is regarded safe, for instance Switzerland
• Open a big office
• Ka Ching!
• And don't forget to get away on time

From the Straits Times (Singapore) two articles, "More than 100 file police report against gold buyback firm" and "High returns, low risk a red flag".

One would guess that people learned from previous cases like the Genneva saga, but apparently not, some snippets:


"On Monday, more than 100 people gathered to make police reports with the Commercial Affairs Department about local investment company Suisse International. They claimed to represent about 250 people who had lost around $35 million to the firm. They had invested in a gold buyback scheme but claim that they have stopped receiving their promised monthly payments, some since as far back as last September."

"Some of the investors had previously bought gold from another firm, Genneva Gold, which was raided by the CAD in 2012, and were eager to sell it off. They were told Suisse International bought and sold gold to turn into novelty coins to be sold at a profit to local or overseas companies."

"The MAS put both the Singapore and Hong Kong arms of Suisse International on its Investor Alert List last November. Both firms are listed with the same Beach Road address. The company offered investors returns of 20 per cent, which financial experts say is unusually high and should have been a red flag. They advise people to do more research to find out what the usual return rates are for various types of investment."

"At first I thought the investment was not bad, there were returns... it looked legitimate, the office in Toa Payoh was so big and I was at the opening of the Johor Bahru office as well," said the retiree who is in his 50s. "But the more we hear, the more we feel we have been very naive. It's a really painful feeling."

"In the wake of the latest alleged gold scam, in which more than 250 investors claim to have lost $35 million, financial experts and consumer watchdogs here urged people to vet a company's track record before investing in it. This includes checking if the firm is licensed by the Monetary Authority of Singapore (MAS), looking up its data on the Accounting and Corporate Regulatory Authority website and scrutinising the firm's financial and audit reports."

LTKM Chairman missing in action? (3)

I posted twice about this case, here and here and several times about the Genneva gold trading scandal.

According to this article from Bernama, the previous Chairman of LTKM is not missing in action anymore.

Again, the charge is not related to a pyramid scheme, but to illegal deposit taking, apparently that is more easy to prove (BNM lost the first case regarding a pyramid scheme, they are appealing).

I guess there are more ways to skin a cat, Al Capone was not convicted for his crimes but for tax evasion.

I just hope for two things in the Genneva case:

• A healthy dose of justice;
• Lots of transparency in what really happened and why it took so long time before action was taken.

Hopefully one day there will be a book written by an investigative reporter revealing all, similar to "PKFZ: A Nation’s Trust Betrayed".


Another Genneva Director Brings Total Charged To 16 Individuals

KUALA LUMPUR, Feb 4 (Bernama) -- Another Genneva (M) Sdn Bhd director was charged at the Sessions Court here Tuesday for illegal deposit-taking amounting to RM5.5 billion, bringing the number of individuals charged in the gold investment case to 16 so far.

Ahmad Khairuddin Illias, 55, pleaded not guilty to two counts of illegal deposit for a gold scheme, under Section 25(1) of the Banking and Financial Institutions Act 1989, which is punishable by up to 10 years jail or maximum of RM10 million or both, upon conviction.

He is accused of committing the offence through two current accounts at CIMB Bank Berhad, Jalan Kuchai Lama branch here between Jan 10 2011 and Oct 1 2012.

Bank Negara Malaysia (BNM) prosecuting officer Fahmi Abd Moin applied for Ahmad Khairuddin's case to be tried jointly with the 15 other individuals charged earlier.

Judge Mat Ghani Abdullah set bail at RM500,000 with one surety and ordered the accused's passport to be impounded.

The court also scheduled Feb 20 for mention and submissions on the prosecution's application for the all the cases to be jointly tried.

Lawyer Mohd Hairani Samsi represented Ahmad Khairuddin.

Between Sept 2013 to date, BNM has charged 16 individuals, including the accused, and 10 companies on 1,550 counts in relation to gold investment schemes amounting to RM5.5 billion.

Australia's biggest pension scam

An article in The Global Mail by Mike Bowers:

"Inside the Offshore Fraud: The Villains and Victims of Australia’s Biggest Pension Scam"

The timeline gives a clear picture what happened:

Investors are protected by 5 parties:

• The trustee, who keeps all assets in trust
• The fund manager, who manages the assets in the best interest of the investors by giving instructions to the trustee, without being allowed to "touch" the assets
• The financial advisor, who is responsible to give good investment advice to his clients
• Auditors, both internal and external, checking the books
• The securities regulator who is responsible for licensing etc.

Yet in this case, involving the Astarra Strategic Fund managed by Trio Capital, all were sleeping on the job:

• The fund manager and the trustee were connected;
• The financial advisors received huge incentives to recommend this fund: "Retail investors could invest in the Strategic Fund with as little as $1000, and were often advised to do so by financial planners, who received an up-front commission of up to 4 per cent.";
• Auditors KPMG (internal) and WHK (extrernal) are reputed companies, yet didn't see the danger; unfortunately, having one of the "Big Four" accounting firms is not exactly a guarantee against fraud or scams, as many cases have shown in the past;
• Trio Capital, who ran the Astarra Strategic Fund was licensed by Australian financial-regulation authorities

One of my favourite bloggers, John Hempton from Bronte Capital was the whistle-blower in this case, acting on a tip off, the story "A dark privatised social security story: Astarra, the missing money and how examining a fund manager owned by Joe Biden’s family led to substantial regulatory action in Australia" (which is a beautiful read) can be found here.

Remarkably how fast Hempton found out that the persons behind the hedge fund had a rather patchy background, a clear red flag. And yes, Joe Biden is the US Vice President.

Another informative article written by Dominic McCormick, Hempton's tipper, can be found here.

Luckily the authorities acted fast, as can be seen from the above timeline, in a few months all related funds were suspended and only two years later one manager was jailed and many other were punished to a lesser degree. Lots of stories have been written about the case, informing the public. Unfortunately, the alleged mastermind behind it all probably goes scot-free.

What can be learned from this case?

• Investors should be aware that fund managers don't handle money themselves, they should be separated from the trustees;
• Investors should be informed about fees, high fees are a red flag since the advisors have a clear incentive to recommend the investment;
• Don't put all your eggs in one basket, please read the story about John Telford;
• Even having several reputable companies or authorities overseeing an investment vehicle is not a guarantee that nothing fishy is going on;
• Whistle-blowers form an important part in the eco-system, if the authorities had not acted so quickly, much more damage would have been done.

In Malaysia several similar cases have occurred, Genevva gold trading scheme was one, SJ Asset Management another. Both cases have dragged on for years, not much information is forthcoming. I hope one day we will get as much clarity about these (and other) cases as in the above Australian scam. Their investors and the public at large deserve it, as do the alleged perpetrators.

LTKM Chairman missing in action? (2)

With reference to the previous posting on this subject, LTKM made the following announcement to Bursa:


"We refer to Bank Negara Malaysia' notice dated 23 October 2013 in The Star newspaper, seeking to locate Encik Ahmad Khairuddin bin Ilias ("Encik Ahmad"), the Company's Independent Non-Executive Chairman, to assist in the investigations of the affairs of Genneva Malaysia Sdn Bhd ("the said matter").

The Board of Directors of the Company wishes to inform that the Directors of the Company have attempted to locate Encik Ahmad but failed to do so up to date.

The Board has met this morning on the said matter and has decided to take the following immediate actions which the Board believes will be in the best interest of the Company. These are:-

(a) With immediate effect, the duties and responsibilities of Encik Ahmad, the Non-Executive Chairman of the Company, is suspended pending the necessary clarification and verification by the Board and the Management regarding the said matter.

(b) With immediate effect, Encik Kamarudin bin Md Derom, an Independent Non-Executive Director is appointed as the Deputy Non-Executive Chairman of the Company.

The Board will make further announcement(s) on the said matter pending the outcome of the clarification and verification by the Board and the Management in due course."


Correct decision, as far as I can see, although rather late, the Board of Directors should have known of Mr. Ahmad's involvement with Genneva Malaysia, which could very well lead to problems down the road. The issue was well noticed by Errol Oh of The Star.

LTKM Chairman missing in action?

Bank Negara is asking the public for information regarding the whereabouts of one of the directors of Genneva Malaysia. Advertisements have been published in several Malaysian newspapers:

Errol Oh from The Star points out that Ahmad Khairuddin is not only one of the directors of Genevva but also the Chairman of public listed LTKM. Something that was left out of the (in my opinion much too short) description of the chairman in the last year report of LTKM:

Errol Oh continues:

"Given that the central bank has to resort to ads in the hope of getting information on him or his whereabouts, it’s likely that he hasn’t been in touch with its enforcement team for a while.

With warrants of arrest issued against him, is Ahmad Khairuddin able to contribute effectively to LTKM’s boardroom deliberations? Can it be possible that he’s still accessible to the LTKM management and other directors, and yet be on Bank Negara’s list of persons sought? Isn’t there something wrong with this picture?

.....

LTKM must address such questions sooner rather than later. Stakeholders shouldn’t be left in the dark when there’s the perception that the chairman is in legal trouble and has gone missing. If the company too can’t contact Ahmad Khairuddin, others have to step in to do the job. All this ought to be communicated to the investing public.

It’s fair to make a distinction between Ahmad Khairuddin’s involvement in Genneva Malaysia and his duties at LTKM. But this could only go so far. The compartmentalisation crumbled when the Genneva Malaysia scandal rudely intruded upon LTKM’s stewardship."

All very relevant questions, hopefully LTKM will soon make an official announcement on this issue.

It is really a pity for LTKM, which is an otherwise decent company. As far as I am aware, there is further no link between Genevva and LTKM.

Update on 4 alleged fraud cases

[1] Silver Bird announced its results, sales is falling of a cliff, it can hardly book a gross profit. The only positive thing I noticed is that its Loss After Tax can be remembered easily: RM 11,111.


[2] Xian Leng announced its results, its operations have fallen to a pathetic level, I don't think it would even have been allowed on the ACE market with those tiny sales, RM 5M for the half year resulting in a loss of RM 1.5M.


[3] Genneva Malayisa; The Star wrote: "Six Genneva personnel slapped with over 900 money laundering charges".

"Six personnel from gold investment company Genneva Malaysia Sdn Bhd and another company have been slapped with 926 charges of money laundering, making false statements and illegal deposit-taking involving RM5.5bil.

Genneva received the RM5.5bil from 35,000 depositors.

Its directors Datuk Philip Lim Jit Meng and Datuk Tan Liang Keat faced 246 and 226 counts of money laundering respectively; business advisers Datuk Ng Poh Weng (155), Datuk Marcus Yee Yuean Seng (17), Datuk Chin Wai Leong (23), and general manager Lim Kah Heng (16)."


The size of the amount (RM 5,500,000,000.00) the number of key people involved (six directors/managers and 35,000 depositors) and the charges (926) are simply breath taking. Why did it have to come so far, should the regulators not have ended this scheme a long time ago?

From Genneva's website: "Preserving Values, Leaving a Legacy".

Values are definitely not preserved (more like the opposite), but the company will definitely leave a legacy, although "somewhat" different from what its clients envisioned.


[4] SJ Asset Management; No recent news regarding SJ Asset Management or its manager Tan Whai Oon.

According to this website, Tan Whai Oon (on the left in the picture) looks like this these days:

He seems quite happy, probably more happy than his previous clients.

According to this article from The Star:

"Tan, also known as Jigme Phende, has been on the run since the end of June 2010 after his fund management company had run into trouble, the result of Tan being investigated initially by the Securities Commission (SC) for charging his clients high commissions.

The managing director and 70% shareholder of SJAM is rumoured to have gone into hiding in Nepal, and his last location was tracked to a monastery called Gyalwang Drukpa in Kathmandu, the country's capital."

Is there a extradition treaty between Nepal and Malaysia?

More shocking from the same article:

".... a senior finance executive of the company spilled the beans on the accounts that have apparently been cooked since 2001."

Why did it take almost 10 years before action was taken against the asset management company?

A simple search for "LinkedIn" and "SJ Asset Management Sdn Bhd" reveals many people who worked with this asset management company. Did nobody notice anything wrong? That is hard to believe. Could they not have dropped a hint at the Securities Commission, if needed anonymously?

Here is a link to a court case between CIMB Investment Bank (whose clients had invested in the SJAM managed fund) and Ernst & Young (the accounting firm who performed the audits on the accounts of SJAM). The document shows (paragraph 8) that CIMB compensated its clients, good for the clients, but not good for the shareholders of CIMB who have to fork the bill.


Enforcement is rare and slow in Malaysia, and if VIPs are involved (like in some of the above, directly or indirectly), things often seem to come to a complete stop. Hopefully we will soon get some much needed justice and transparency in the above cases. Not only against the perpetrators, but also to other people who have been sleeping on the job, like auditors, advisors, etc.

Court acquits Genneva directors

I was rather surprised when I read this article on Malaysian Insider's website:


Four gold traders from Genneva Sdn Bhd walked free today after being acquitted of 224 counts of money laundering and illegal deposit-taking said to be worth over RM141 million.

Sessions Court judge Rozana Ali Yusof ruled that the accused — directors Datuk Ng Poh Weng, 63, Datuk Marcus Yee Yuen Seng, 61, Datuk Chin Wai Leong, 37, and former director Liew Chee Wah, 59 — had conducted a genuine gold trading business.
According to The Star Online, the judge said the buy-back concept was found to be nothing but a marketing strategy employed by the company to assure the buyer that the gold bars were genuine gold.

“That is why Genneva is willing to buy back the gold,” Rozana was quoted as saying in her judgment.

According to this article Bank Negara Malaysia will file a notice of appeal.

I wrote about Genneva before.

Next to the court case against Genneva Sdn Bhd there is the case against Genneva Malaysia Sdn Bhd by Bank Negara, the investigation in Singapore against Genneva Pte Ltd by the CAD, and the cases by private investors both in Malaysia and Singapore. It is far from over.

As most people will have noticed, the price of gold has suddenly collapsed in April.

Genneva's operations in Malaysia were already discontinued, what would otherwise have happened? Would investors have returned their gold for Genneva to redeem? And would Genneva have been able to do so?

Genneva, the role of high people and the press

A remarkable article on the website of The Malaysian Insider:

"Genneva freeze not fair to investors, says Dr M".

Former Prime Minister Tun Dr Mahathir Mohamad appeared today to defend gold trading firm Genneva Malaysia, and asked Bank Negara Malaysia (BNM) to lift the suspension of its assets.

He made his remarks today despite a recent explanation by Deputy Finance Minister Datuk Awang Adek Hussin in Parliament that Genneva’s liabilities exceeded its assets and that showed the company was unable to pay returns to its investors.

“I don’t know what is wrong with the Genneva thing, they claim that they aren’t operating this pyramid scheme,” Dr Mahathir told reporters after addressing the 3rd World Conference of Riba (usury) here.

“Investigate first because if you stop the transaction, people’s money will be locked out and they cannot use, they cannot even get the gold ... They deserve fair treatment.”

He also urged the authorities to regulate gold trading as he extolled the advantages of keeping and buying gold.

Genneva’s gold, which was advertised as syariah-compliant gold, was launched in December 2010 by Dr Mahathir, and a number of its traders were spurred on by the former PM’s recommendation.

To me, if it looks like a pyramid scheme, swims like a pyramid scheme, and quacks like a pyramid scheme, then it probably is a pyramid scheme.

Even if they use terms like "trader" instead of "investor", "consultant" instead of "agent", that doesn't change a thing, it is just using different words. Coupled with unrealistic high returns of 24% or even 36% per year, I am 99.9% sure that Genneva was indeed operating a pyramid scheme. But it seems that Dr. M. still isn't convinced.

Dr.M. wasn't the only high person who was somehow involved with Genneva, several others were also, it appears. Since Malaysia has the highest Power Distance Index value in the world people will more easily follow the advice of high ranking people. They should therefore be more careful than usually.


Another aspect is the media, where were they? They could easily have warned the public what was going on. I did some searches on The Star, and found the following references:

A golden investment that sounds too good to be true

July 13, 2009: As the title suggested, this article gives a warning. But it is not clear in its information.

"A Bank Negara official however told Starprobe that Genneva was not licensed. He could not comment further as no complaint had been lodged against the company". Bank Negara had already started an investigation into the Bestino Group, did it really need a complaint to swing into action? 

Genneva sells gold and is not a ponzi scheme, says firm

July 15, 2009: “There may be Ponzi schemes in the market but it is obvious that Genneva is not one of them,” group senior manager Tony Yao said". I am afraid that is not obvious to me. This article takes some sting out of the one published two days before.

Only one week later, on July 21, 2009 Bank Negara commenced investigations:

Bank Negara Malaysia has commenced investigations into Genneva Sdn Bhd and Etika Emas Estet Sdn Bhd under suspicion of conducting illegal deposit taking activities in breach of Section 25(1) Banking and Financial Institutions Act 1989 (BAFIA) and Section 4(1) of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA).

The raids on these companies were conducted at their premises in Kuala Lumpur following information received from members of the public. Relevant assets and documents of the company were seized for the purpose of investigation.

The Star did allow Genneva to sponsor its Penang Starwalk 2011 giving credibility to the company which it used on its website.

Glittering prospects in the gold trade

February 10, 2012: an extremely positive article (as the title suggests) about Genneva without a single warning.

"Incorporated in March 2007, the Genneva Group of companies was set up with the intention of bringing gold trading to a new level in Malaysia by breaking away from traditional models. The company’s core mission is to encourage people to trade and increase their income capacity through gold. Today, the company is represented in nine states — Selangor, Perak, Johor, Sarawak, Penang, Malacca, Negri Sembilan, Sabah, and Kedah — with seven branch and four representative offices. It also has a strong international presence within the Asian region through outlets in Singapore, China, Hong Kong, and the Philippines".

Genneva Syariah sponsors RM100,000 for Ipoh Starwalk 2012

Ipoh Starwalk 2012 has struck gold with Genneva Syariah making its debut as a platinum sponsor in the annual event.

Biggest turnout at Starwalk

Again, Genneva is a platinum sponsor and 3 proud pricewinners are shown:

There is always a moment that a pyramid scheme collapses, when too many customers want their money back. That seemed to have happened in Singapore, as reported by this blog on September 26, 2012.

Not surprisingly (but possibly rather late), authorities raided Genneva on October 2, 2012, both in Malaysia and Singapore.

But still The Star published two letters Genneva, a new age biz model and Genneva Malaysia has never failed its customers (which doesn't seem to be true, at least in Singapore) on October 5, 2012, after the raids. Both letters where highly supportive of Genneva, should The Star really have published those letters?


Everybody is hoping for a fast and transparent investigation by the authorities. But other questions also need to be asked. Why were so many high persons involved in this case? Should the press not have done some investigative research and reporting? And should the authorities not have acted more early? And why does Malaysia appear to be a magnet for these kinds of schemes?

CAD probes troubled gold trader Genneva

More news from the raid on Genneva's office in Singapore:

Genneva Pte Ltd, the gold trading company that has been the subject of a literal run by its customers, is under investigation by the Commercial Affairs Department (CAD) for alleged "financial improprieties".

Its Orchard Tower offices were raided by CAD yesterday. The office is closed and its website is frozen. A number of employees were taken in for questioning. The police has confirmed that investigations are ongoing.

Matthew Kurian of Regent Law, who is retained by Genneva as its legal counsel, said that the firm is conducting its own internal investigation and has appointed forensic accountants. "The company intends to honour all its obligations. They are coming up with a plan."

A letter by Lim Kieng Justin, who has just taken over as Genneva general manager, said that the discovery of financial improprieties "some time back" has led to a delay in the payment of discounts, commissions and fulfilment of buy-back guarantees. The letter, dated Sept 28, was posted on the Web.

Mr Lim is a director of an apparently related company, Genneva World Pte Ltd, which was registered for business in March this year. He is not a director of Genneva.

Mr Lim wrote that the directors have lodged the necessary police reports and put in place new management staff. ". . . the directors are in the midst of negotiations with an external party who is prepared to assist the company and see it through this financial crisis. The objective of the directors is to ensure that all obligations to the company's customers and consultants are met."

He also wrote that the company would organise dialogue sessions with customers and agents in 7-10 working days. He urged customers and agents to remain calm and "help us work out (an) amicable solution for everyone".

Genneva is understood to have received several letters of demand from aggrieved customers who have entrusted gold to the firm or are owed the fulfilment of Genneva's buyback undertaking.

BT reported last week that at least two customers have filed suits in the Subordinate Court for Genneva to fulfil the terms of its buyback. At least one has secured an interlocutory judgement pending an assessment of costs. Prior to the judgement, Genneva did not respond nor contest the suit. Mr Kurian said that Genneva was looking into making an application to the courts for the judgement to be set aside and to file a defence.

Goh Kok Yeow of De Souza Lim & Goh, who represents the plaintiff Lee Bee Ghok in the case, said: "We will not agree and will vigorously oppose the application because they have no legal reason to do so."

Genneva operates under a police licence that allows it to deal in second-hand gold. Its model is to sell gold to customers at a hefty premium to the market. As at August, it listed a price of $96 per gram on its website. The indicative retail gold price at UOB yesterday was about $70.15 per gram or $70,149 per kilobar.

Genneva customers buy gold at a 1.5 or 2 per cent so-called discount off its list price. Genneva undertakes to buy back the gold in one or three months, at the list price, and customers pocket the 1.5 or 2 per cent discount. Assuming a monthly rollover, they stand to earn as much as 24 per cent year. Lately, some customers have been offered a discount of as much as 2.5 per cent.

The last few weeks have seen Genneva grapple with its worst case market scenario - that of a rush among customers for the exit. In that time, it has imposed a limit on the daily buyback of gold that it can do - reportedly five kilobars a day. Agents are also reportedly owed commissions for more than six months.

Three Genneva directors - Marcus Yee Yuen Seng, Ng Poh Weng and Chin Wai Leong, who are also directors of Genneva Sdn Bhd - are being sued by Bank Negara in Malaysia for alleged illegal deposit taking and alleged offences under anti-money laundering laws. The case is ongoing.

Genneva is in the Monetary Authority of Singapore's Investor Alert list, which tells investors to be on guard against unlicensed entities. Other gold companies such as The Gold Guarantee and Asia Pacific Bullion are also on the list.


Written by Genevieve Cua from Business Times, website.

Genneva taken to court by customer

She wins interim judgment; other lawsuits may follow

 

Genneva Pte Ltd, a gold trading company offering a "buyback" scheme, appears to be in hot water. At least one customer has recently won an interlocutory judgment against it in the Subordinate Court, pending an assessment of damages. It remains to be seen, however, whether she will recover her claim of about $190,000. Genneva failed to respond to the writ of summons or to contest the case.

A number of other customers are also looking into launching a lawsuit against the firm for its alleged failure to honour its part of the agreement to buy back gold. One group of about 60 customers, representing a total of roughly $10 million in gold purchases, is understood to be consulting lawyers.

Genneva is on the Monetary Authority of Singapore's Investor Alert list of unlicensed entities. Its scheme basically sells gold to customers at a hefty premium of 20-30 per cent. Customers, however, are told that they enjoy a "discount" of about 2 per cent off the headline price.

They are given the option to sell back the gold after a pre-agreed term of one month or three months. The gold can be sold back at the headline price and customers get to pocket the so-called discount. Assuming monthly rollovers, this could mean a return of as much as 24 per cent a year.

Genneva's model appears to fall into a grey regulatory area. Because there is typically a physical purchase of gold, the company is not classified as an investment adviser. The so-called discount that customers are extended is also not described as a yield or return.

The above snippets from Singapore Business Times. Surprising that so many people seem to fall for these kind of schemes, although low interest rates will be one factor. However, promising 24% returns per year (cumulative even 27%) is way above what Bernie Maddoff offered. Surely some people should have been suspicious, if something sounds too good to be true, normally it is.

Bank Negara's alert can be found here and the same for the Monetary Authority Singapore here.