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Scams and swindles

5 Malaysians and 3 Hongkongers arrested over investment scams which conned HK$58 million with promises of great returns on rice

Gang extracted cash from 155 victims with a range of bogus moneymaking schemes

PUBLISHED : Friday, 08 June, 2018, 10:42pm
UPDATED : Friday, 08 June, 2018, 10:59pm

Hong Kong police on Friday arrested three locals and five Malaysians over investment scams in which 155 victims lost HK$58 million (US$7.39 million) to con artists promising high returns on ventures that included growing rice.

The gang, whose ages ranged all the way from 22 to 80, lured customers into laying down money on three companies based in Kowloon by claiming they would pocket large sums in a short time on schemes that spanned everything from infrastructure and commodities to growing a special formula of rice in Southeast Asia.

Cheung Lok-chuen, chief inspector of the Kowloon West regional crime unit, said police began receiving complaints from victims last month, but the ruses had been in operation since October.

Many of those targeted had suddenly seen their investment accounts stop functioning.

Individual losses ranged from HK$1,400 to HK$45 million.

Cheung said the scams began with the victims being told to bring money across the border to mainland China and transfer it to designated bank accounts. This was often done by relatives who had already been conned into putting money into the same three companies.

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The investors would then download a mobile application with which to control their investments.

However, many became suspicious when their accounts began failing to work or allowing them to trade commodities and withdraw money. The three firms had no proper answers for these problems.

Eight individuals were arrested in five locations on Friday, including Tsim Sha Tsui, Jordan, and Tin Shui Wai in the New Territories. They were held on suspicion of fraud and detained for investigations.

Two of the companies were registered in Hong Kong, but the remaining one was not registered anywhere.

Cheung said more arrests could follow.

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A police source said the scammers had made the investment products more believable by citing fake testimonials from scholars and customers going by the title “datuk”, an honour equivalent to “sir” that is handed down by Malaysian royalty.

“The fake datuks would claim how supportive they were of the projects and how they were developments of the future,” the source said.

Hong Kong recorded 7,091 cases classed by police as deception last year – a decrease of 2.3 per cent on the figure for 2016.

Officers also warned the public of bogus foreign currency investment scams, which they said had been the subject of numerous reports made to the Commercial Crime Bureau.

Tactics used to lure people into these scams were similar. Investment products involving foreign exchange, gold mines or shares about to be listed on overseas markets were touted, with high returns forecast and capital protections guaranteed.

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A few months later agents would notify the victims that their investments had failed to meet their objectives due to market fluctuations or other issues.

“As a result the victims’ investment capital was completely lost,” police said on their website.

“The investment companies closed down and the people in charge disappeared.”

The force urged potential investors to consider thoroughly the risks involved before parting with their cash.

Any suspicious investment products could be reported to police on +852 3661 8183, Cheung said.