Two Men Arrested For Multi-Million Dollar Gold Investment Scam
The Commercial Affairs Department (CAD) have arrested two men with assistance from the Royal Malaysia Police, for their suspected involvement in Genneva Pte Ltd (Genneva), a gold investment company, which sold goldbars under a buyback scheme between 2008 and 2012.
Under the buyback scheme, the company sold gold bars to customers with promised returns as high as 36% per annum over a contract period. Subsequently, Genneva implemented a Gold Inspection exercise, where customers were required to deposit their gold bars with Genneva when renewing their contracts. This was purportedly for the purpose of ascertaining the authenticity and purity of the customers’ gold. The customers were told that Genneva would return them an equivalent quantity of gold after three working days.
Within two months, Genneva collected around 3,500 kg of gold from the Gold Inspection exercise. The company eventually failed to return approximately 640kg of gold (with an estimated market value of $45 million) to its customers as it was experiencing financial difficulties
One of the arrested men, who was the general manager of Genneva at the material time, has been charged in court with fraudulent trading under Section 340(5) of the Companies Act on 22 February 2019. The other man, who was the head of operations of Genneva at the material time, will be charged in court on 26 February 2019 where a similar charge under Section 340(5) Companies Act will be tendered against him.
If convicted, they will face imprisonment of up to 7 years, or a fine of up to $15,000, or both.
Source: Singapore Police Force