Suspected pyramid scheme firm folds after taking HK$40m from Chinese investors
Investment firm suddenly folds after taking millions from mainland and Hong Kong clients; police investigate suspected fraud
An investment company abruptly folded after taking HK$40 million from mainland and local clients in an alleged pyramid scheme, police said yesterday.
Crime squad officers are investigating the directors and employees of the unnamed company after investors went to its offices in Tsim Sha Tsui and found no employees there.
Initial investigations showed that more than 500 investors were lured to join the scheme over 12 months, investing about HK$41 million, with the promise of rich returns from property development, police said.
"The company placed advertisements on the internet, but we believe most of the victims knew the firm through their friends and relatives," a police investigator said. "The victims were told that the investments were linked with real estate development projects in Macau and the mainland."
The company is understood to have offered clients different levels of investment with different rates of return, with the opportunity to become diamond, gold, silver and bronze members.
Victims were told that the larger the amount they invested, the bigger the returns.
Police were called after 34 investors found that the company had folded and no one was in the office at Concordia Plaza on Science Museum Road on Monday.