Jail for investment scammer who cheated 4 victims of more than $1.1 million
A serial investment scammer was an introducing broker with a forex brokerage between 2013 and 2015 when he cheated four people of $1,128,000.
On Tuesday, Hong Ban Joo, 51, who was with NoaFX and managed to return $351,080 to three of them, was sentenced to six years and two months' jail after he pleaded guilty to six counts of cheating.
Deputy public prosecutors Norman Yew and Cheng You Duen stated in court documents that NoaFX is a forex brokerage, offering online services for trading in currencies.
Users may register trading accounts on its website and use them to place currency trades. They can also allow traders to use their accounts to place trades and make trading decisions on their behalf.
The court heard that Hong, as an introducing broker, was entitled to receive rebates on trades executed on trading accounts that were opened through his referral of investors to NoaFX.
At Hong's request, he was issued with multiple dummy accounts, which were meant to be used to test out trading strategies without risk on the NoaFX platform. The DPPs said a dummy account is meant to simulate a real trading account but would neither involve real investment monies nor incur any transaction fees.
A dummy account also has the same appearance as a real trading account, such that a user of the platform would not be able to distinguish it from a real trading one.
Hong did not have any real trading account with NoaFX between 2013 and 2015. He also did not open any real trading accounts for the four victims.
Among other things, he collected $660,000 from one of his victims to purportedly make investments and generate returns for the latter.
Instead, Hong used up to 90 per cent of the man's monies to pay creditors.
Hong had earlier invited the man to give him money for him to purportedly utilise for forex trading and related investments to generate returns. Hong later failed to deliver what was promised.
The court heard that Hong and the man then prepared a "fund management agreement", which Hong signed.
Under the agreement, Hong acknowledged receiving the man's monies for investment purposes and agreed to pay him a fixed return of 8 per cent per month.
The DPPs said: "The accused knew that his representations to (the man) were false, as the accused did not intend to use all of (the man's) monies for investments to generate returns... Instead, he had intended to use part of (the) monies to pay earlier investors to whom the accused owed money."
Hong also duped the man into believing that all his monies were put into real trading accounts with NoaFX by providing him access to the dummy accounts.
Between July 2013 and September 2015, Hong gave him around $200,000 as purported returns when in fact these sums were derived from monies obtained from the other investors.
Between October 2015 and February 2017, Hong also gave him about $80,000 as restitution.
The court heard that Hong used a similar method to cheat at least one other victim, from whom he collected $350,000.
Court documents did not disclose how the offences came to light.
The court heard on Tuesday that Hong intends to appeal against his sentence and was offered bail of $80,000.
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