Cryptocurrency scam costs S'pore woman $1.2m

SINGAPORE - Crooks masquerading as tycoons to dupe their victims seems more like Hollywood fare than real life but tell that to a Singapore woman who has lost her life savings after falling for such a scam.

Her losses - around $1.2 million - were even more painful because the 53-year-old had made a point to check out the conman who eventually ripped her off.

The saga began in late 2020 when Audrey, as she wants to be known, was looking for a buyer to pay $600,000 to take over her retail business in Singapore.

She thought she got lucky when one of her regular customers introduced her to a "rich factory owner" from China who appeared keen to buy her business.

They discussed the deal online because he said he could not come to Singapore due to Covid-19 restrictions but Audrey did careful checks.

She had a copy of his identity card and after doing a business registry check with the Chinese authorities, found that the factory was not only a real deal but had a paid-up capital of millions of dollars.

What she did not expect was he turned out to be an impostor from a major crime syndicate who eventually cheated her of $1.2 million in a cryptocurrency scam that was remarkably sophisticated.

Audrey says: "I was very upset when I found out that such cases were rampant in China, Hong Kong, Taiwan and the United States.

It's shocking that these criminals are cheating people around the world and they are not afraid of the police because they feel that they are untouchable."

She is among a growing list of victims worldwide who have fallen prey to a sophisticated foreign fund transfer scam that is believed to be run by syndicates based in Indochina.

Such crimes used to be commonly known as love scams because the conmen would target mostly lonely women by befriending them on social media. After gaining their trust, they would ask the victims to send them money by claiming they needed help to pay hospital bills or business debts.

But these cons have taken on a more sinister name - pig butchering scams - because the conmen tell their victims that cheating them is similar to dragging the helpless animals to the slaughterhouse and even the police cannot help them as their whereabouts and identities are not known.

Now, the scammers do not just use "love" as their weapon. They have added fake investment platforms linked to cyptocurrency to their arsenal to target not only housewives, but men and women who are keen to invest money.

The scammers are counting on the fact that most people, including senior executives and veteran investors, probably do not know enough of these investments to spot a fake from the real deal.

For example, Audrey counts herself as a savvy business owner of two decades. She not only started her own company that sells consumer goods, but also holds a postgraduate degree in business.

"Frankly, I still cannot believe I am a scam victim in my own country. We all grew up believing that trust is the most important virtue in business," she says.

"We have never come face to face with people who are so evil that they dig up your background and then package a scam to target you."

It all started in December 2020 when one of her regular customers here, now believed to be an accomplice of the syndicate, gave her the WeChat contact of a potential buyer of her business.

She messaged the man, who identified himself as the owner of a factory in China that manufactured goods related to her business.

The man, "Mr Kao", appeared keen to buy her firm and sent her a picture of his identity card to show he was genuine.

She says: "In Singapore, we are taught to exercise due diligence. So I actually applied for a business check with the Chinese authorities and found out that the factory already exists and has substantial paid-up capital of over $10 million under the man's name."

She also rang the telephone number listed on the company's official document and spoke to an elderly man who introduced himself as the father of the owner.

"So it all sounded genuine as both the man and the company were real. If anything, my mistake was I didn't check further because I was more concerned that my business partner would be offended if the father told him that I was checking up on him," she says.

The checks made Audrey think she had found a genuine buyer because the man also kept in touch frequently, including sending photographs of him at various business functions. But unknown to Audrey, this was all part of the act to gain her trust.

She did not sell the business because the man kept saying he wanted to visit her shop first but could not come to Singapore due to Covid-19 restrictions.

But he then proposed another business venture that involved both of them investing in cryptocurrency. To show his sincerity, he showed Audrey that he had put US$2 million into their joint account.

This put pressure on her to invest too because she was worried of losing her buyer if she backed out.

Moreover, she saw that the investment was with a well-known crypto company: "I kept thinking it was safe because why would a rich man cheat me when he had put in more?"

So she did not suspect anything even when she was told to make numerous transfers to bank accounts of individuals in Singapore and Hong Kong. The man had told her that this was how such firms worked.

Initially, she put in over $750,000 of her savings but the sums soon ballooned to about $1.2 million. Audrey had to resort to borrowing from her siblings and, ironically, none of them asked why because she was known in the family to be business savvy.

It was only after six months - in May last year - that she had an inkling that she had been duped after seeing social media postings of scammers using similar pictures used by "Mr Kao".

Apparently the scammer had copied pictures of a social media influencer and used the name of a genuine factory owner - Mr Kao - to create the fake ID to dupe Audrey and others. She also found that her investment was bogus - she was "trading" on a fake website that looked like a genuine one.

"I felt so angry yet embarrassed for falling for such a scam. While making the police report, I couldn't even think properly and wrote $900,000 as my loss. I had a shock when the officer calculated my losses and told me it was $1.2 million," she says.

The one silver lining is that she still has her business, which now provides her income for daily expenses as her savings are all gone.

Audrey has also become an active volunteer of Global Anti-Scam Organisation, a Singapore-based support group for con victims around the world.

As she is fluent in Mandarin, she has been counselling victims from Taiwan and in the last six months alone, has helped many people there. "Some victims become suicidal but I tell them nothing is worth more than life. We must never let the scammers win. We will continue the fight until justice is served."

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How to avoid investment scams

You can avoid many dodgy investments by following this three-step checklist from the Monetary Authority of Singapore.

When it comes to money matters, it pays to ask many questions about your investment. Be extremely careful if you are promised guaranteed sky-high returns because such investments do not exist.

All genuine investments come with a degree of risk and if someone claims that you will definitely make money, chances are you are being sold a fake product. Of course, if a company avoids answering most of your questions, it is best to just stay away.

Always check the background of the companies you plan to invest in.

It goes without saying that you will avoid a lot of heartache if you make it a rule to invest with reputable companies only.

Do note that the absence of any negative comments about the company does not mean it is genuine – it may merely mean that it is new, something that you should be wary of.

If you invest with a reputable company, make sure you are trading on its official platform and not a cloned website.

As a leading financial hub, many international firms have set up branches here and are regulated by the MAS. So a check of its directory will provide many choices for you. Why would you risk putting your money with unlicensed companies, especially those based overseas?

While there is no guarantee that you will definitely make money with a licensed investment, dealing with an unlicensed one certainly increases your risk manyfold.

So always ask, check and confirm because many scammers are counting on you to not do this.