SINGAPORE - Getting scammed is one thing but it's a whole new level of pain when you seem to make a bundle of cash and then find the fraudsters can prevent you getting your hands on it.

This happened to James (not his real name) when a "friend" introduced him to a good investment after his income was badly affected by the pandemic.

The "friend" got him to open a foreign-exchange (forex) trading account and gave "insider tips" so he could trade and make some profit.

James, 55, who used to earn a five-figure salary in a tourism-related sector, initially invested $800,000 and turned that into $8 million, thanks to his canny trades.

But his good fortune soon turned into a nightmare when he could not withdraw the money.

He later discovered his funds were never used in any genuine forex trades but were channelled straight into the scammers' pocket.

A new high-tech scam

The crooks created an online trading site that used similar platforms found at genuine trading houses. This meant they were paying certain firms for the right to use their custom-built trading software.

The victims lured into trading would see live feeds that look like the real thing but with a crucial difference - the crooks can manipulate the outcome to make them believe that they have hit the jackpot.

This happened to James, who appeared to gain big profits each time he followed tips passed on to him.

He says: "I've read about scams but I never imagined falling for one myself. This is a very insidious scam because they give me my own account and I do my own trading.

"This gave me a sense of security as I thought I was in control. But all along, they were playing me."

Don't disclose personal details freely

It all started in February last year when James received a message from an unknown person that read: "Hey, I'm back in Hong Kong now."

He wrongly assumed that the sender was a restaurant owner he had befriended during his past business trips to the city.

James began messaging the sender, who continued to pretend to be his "friend".

He says: "Looking back, I made the mistake of disclosing too much information during our chats. I mentioned that the pandemic had hit me hard and affected my income. So the scammer preyed on my vulnerability."

About a month later, on the pretext of helping him, the "friend" sent him information on a forex trading house, urging him to try his luck and make some money to tide over.

The "friend" promised to give him useful tips and told him he would slowly gain the confidence to trade. "It sounded interesting. And as I was the one making the trades, I saw no harm in trying since this 'friend' said it was easy to make money," says James.

He was led to believe he was dealing with a real trading house in Hong Kong as he had to submit personal documents and go through an investor questionnaire to ensure he knew the risks of such trades.

James wanted to start the trade with around $20,000 and was told to buy cryptocurrency as the money could be transferred immediately. Although this is not the norm for many trading houses, James did not suspect anything as he was making steady profits.

At one stage, he made a request to withdraw $100,000 and the transfer to his bank account here was done almost immediately.

This convinced him that the trades were genuine and he ended up putting $800,000 of his savings into the game.

By September last year, his account was up by almost $8 million. He then wanted to withdraw $400,000 but his request was denied due to "a seasonal accounting process".

He made the same request a few days later and again, he could not withdraw because he was told that he had not paid the taxes for his gains. That raised an alarm as taxes would normally be deducted automatically at source and a person would not need to pay anything.

James contacted the Hong Kong tax authorities to verify this and got a shock when officers told him they did not have any record of his investment. Then came the bombshell - there was no such trading house in the city.

Not surprisingly, James was soon out in the cold as all communications related to the scam were cut off. He then reported his loss to the police in Singapore.

Soon after, he joined the Global Anti-Scam Organisation's support group and realised that the trading house which cheated him was probably based in Indochina, not Hong Kong.

"I only trade with regulated companies. I didn't made checks on this company because I thought it was based in Hong Kong. I trusted the system there and didn't see this coming," he says.

Due to the sophisticated software that was used in the scam, even an experienced investor like James was fooled into thinking his trades were real.

"In this whole saga, I thought I was doing forex trades. But I was actually funding the account and doing fictitious trades. After I discovered the scam, I called my 'friend' but the number was no longer in use."