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Not Another Gold Scam…

Written By: Tiang Chuan on November 13, 2011 6 Comments

Every Sunday, there will be an article on the papers that features a successful investor in a Q&A format. Part of the Q&A will be a question on their worst and best investment. Normally, the best investment would be business of the interviewee.  However, it was different today. The best investment is an unfamiliar name. What piqued my interest was that the interviewee said that that particular investment was earning her a return of US$90 a day from a capital of US$6,000 (that’s 1.5% a day) ! What legitimate investment would give a fix daily return? So, I put on my Sherlock Holmes cap and started to do some investigation…

It was not easy to find the website of the firm on Google. I found it using Yahoo. The website looks does not look professional and was filled with pictures of the gold mining process. Basically, the company claims to be harvesting residual gold and precious metals from tailings, the unwanted earth and rocks from the initial mining process. They do the harvesting from mines in Africa. Nothing is mentioned about the way the investors’ return is calculated.

So again, I searched for the CEO’s details. There was no match on the companies he worked for. One company came close but wasn’t a perfect match. The other asset management company did not even exist. Neither was the CEO’s details on the web.

There were some Facebook pages but they were in Malay. I don’t understand Malay. But I came across a photo of the screen capture of an investors ‘investment plan’. The daily dividend is at 1% every day! What kind of investment can give you a guaranteed 1% return every day?! I think you know the answer…

This is not the first time coming across readings of ‘successful’ investors putting money into suspicious investments. Other articles from the weekly column has also mentioned of investors ‘investing’ into popular gold cash back schemes. A colleague shared that his client has put significant amount into one such popular schemes and refuses to listen to him. That client was sold after receiving the ‘cash backs’.

When national papers put up such articles, non-discerning investors would gain confidence on such scams and more people would become victims. However, it is not easy to expose scams in Singapore at all. It is common that only after thousands of people have lost millions of dollars that some form of action might be taken. Sadly, many victims have to resort to civil suits whereby the quality of the engaged lawyer can make or break the legal claim. Not many investors, who are your man-in-the-street and having lost a significant part of their wealth, can afford top-notched legal advice.

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6 Responses to “Not Another Gold Scam…”

  1. Panzer says on: 14 November 2011 at 8:28 AM

    I’ve learnt to not read the Investment section of the XYZ Times anymore because of the lack of quality and research on the accuracy of the interviewees purported investment returns. As you’ve mentioned, there has been too many interviewees who share about investments that are highly dubious and look more like ponzi schemes rather than bona fide investments in quoted exchanges or regulated schemes.

    The interviewer hardly ever challenges the interviewees to show proof of their returns or to be specific about how they achieved their returns and how they got their starting capital.

    Many times, growth in portfolio is more due to capital injections than above-average returns on the initial capital.

    Be well and prosper.

  2. Tiang Chuan says on: 14 November 2011 at 12:31 PM

    Hi Panzer,

    The media needs controversy to attract readership. Be it newspapers, magazines, websites, blogs etc, the main aim is readership. So high return numbers will surely readership in a Investment section.

    The flip side to that is that readers can be mislead.

  3. Jeremy L says on: 2 December 2011 at 10:36 AM

    I got a call from an unlisted number and the premise was somekind of free stay. Upon probing further it was an investment talk. Timeshare..no..hotel loyalty..no but investment in some mining facility in the Philippines. Funny thing is they claim their sales office is in Battery Road but the registered address is some place in Ming Arcade.

    I was given a brief idea of the investment, for $10k min i would get back 24% per annum spread over each quarter i would get $600 and at the end of the year, i would get my principal back.

    So my question is it legitimate to get 0.065% a day and i find the owner equally dodgy as his telemarketer. When i insisted on seeing the Battery Road sales office, i was given one excuse after another.

    They claim a paid up capital of $300k. Can they just say that to bolster confidence.

    Anyone out there heard of this company. The owner is some guy named Wesley and i was even invited to his “restaurant” to talk business which was a small cafe in Ming Arcade.

    Can anyone guide me as to how to ensure this is not a scam.

    Cheers,
    JL

  4. Jeremy L says on: 2 December 2011 at 10:45 AM

    Hi ,

    This is an addendum to my earlier post. Did a ROC search and the company is XYZ Company being formerly known as ..why would a investment company be setup from another, i am curious when it should be clean and does MAS monitor such investment companies.

  5. Tiang Chuan says on: 6 December 2011 at 8:42 PM

    Hi Jeremy,

    I guess you already have an answer in your heart.

    When it sounds too good to be true, it probably is.

    I have removed the company names in your posts due to legal and company policies. Hope you’ll understand.

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