Seven Singaporeans have been indicted in Taiwan over a gold buyback scheme that allegedly cheated some 200 victims of more than NT$400 million (S$17 million), Taiwanese media reported.
The scam was apparently a copycat version of similar scams uncovered in Singapore in recent years, the reports said.
Xie Si Liang, 48, Xie Jia Ye, 42, and Jiang Zi Wen, 57, were charged with violating Taiwan's Banking Act on Tuesday (Jan 26), alongside four other Singaporeans and 25 Taiwanese , United Daily News said on Wednesday. The four Singaporeans were not named.
The Singaporeans started the scam in March 2013, when they set up a company, Tian Jin Group, through which they sold gold bars under the "Swiss PAMP" brand to investors through multi-level marketing, China Times reported, citing prosecutors in Taiwan's northern county of Taoyuan.
The gold, which cost just NT$1.23 million per kg, was marketed at NT$2.6 million per kg, with a two-year buyback guarantee at the original price and profit of 24 per cent, reported the semi-official Central News Agency. It reportedly had more than 5,000 "members" who each paid NT$80,800 in order to be eligible to buy the gold products.
Investigations showed the syndicate used the profits as bonuses and incentives for the company's senior executives, CNA said.
The core members were then able to lure more investors to join the scheme by flouting their wealth - through renting luxury cars like Rolls-Royce and Lamborghini, and taking members out to sea tours on yacht bought by the money.
The group subsequently set up a few other companies which operated similar schemes.
Xie Si Liang and Xie Jia Ye, the president and general manager of Tian Jin Group respectively, were detained by investigators at the Taipei airport last September when they were trying to catch a flight back to Singapore after attending the opening of one their companies's Taoyuan office, Taiwan media report said.
Investigators then raided 17 places including their homes and offices, and seven people were also questioned as part of the probe, reported CNA.
Investigators seized a yacht, a Porsche, hundreds of gold bars, more than NT$2 million in cash, diamond rings, branded bags and membership cards during the raids, it said. The gold bars were found to be inferior products with fake certificates, China Time said.
A total of 195 people who claimed they invested sums of between tens of thousands to hundreds of thousands of Taiwan dollars in the scam have filed complaints with the police, the newspaper reported.
Xie and the others have claimed that their business is legitimate.