Jail for man who used investors’ funds to pay debts, lied that money had been stolen

SINGAPORE - A man who used money he had received from investors to pay off his own debts has been sentenced to jail.

On April 15, Madarssamarecar Mohamed Bagurudeen, 48, was handed a jail term of four years and 11 months.

The Singapore permanent resident had earlier pleaded guilty to five counts of criminal breach of trust.

In 2017, he had promoted a scheme that promised investors a monthly interest of up to 3 per cent for convertible loans they provided to his company for a predetermined period.

In total, Madarssamarecar received $865,000 from four investors into his firm, The Gold Souk Investment Holding. Business records show the firm, which has been struck off, was an investment holding company.

He ran into trouble in 2018 when his money-changing businesses started to lose money, and decided to use the investors’ funds to pay what he owed in the form of investment returns or refunds to other clients.

He also used money from an acquaintance, referred to in court as Farook, to pay his debtors without Farook’s knowledge.

The two men had an arrangement where Farook would pay a commission to Madarssamarecar for helping him obtain cashier’s orders for the purchase of property and vehicles.

Between October 2018 and January 2019, Madarssamarecar helped to obtain cashier’s orders on more than 10 occasions, pocketing commissions of at least $8,000.

In January 2019, Madarssamarecar closed the bank account he had been using to receive money from Farook. He then asked another man, Sivakumar Madivanan, 40, to help receive the money instead.

That same month, Farook deposited $2.7 million into Sivakumar’s account for a property purchase and asked Madarssamarecar to obtain a cashier’s order for a deposit on the purchase.

The next day, Farook attempted to deposit another $2.9 million into Sivakumar’s account, but the bank denied the transaction. It was not explained in court why the transaction failed to go through.

Farook then decided to hand over the $2.9 million to Madarssamarecar in cash, so that he could deposit the money himself and apply for the necessary cashier’s order.

The two met at a carpark in People’s Park Centre, where Farook handed over the money and various documents related to the purchase of property.

Around this time, Madarssamarecar had other money changers pressing him for repayment of currencies that his money changing companies had purchased from them.

So he instructed Sivakumar to pay the creditors with $500,000 taken from the $2.9 million received.

On the same day, Madarssamarecar told Farook that he could not give him the cashier’s order for the initial $2.7 million, as the bank had questioned him.

Sceptical, Farook asked for the $2.9 million cash to be returned to him, but Madarssamarecar was able to return only $2.4 million.

Madarssamarecar claimed the remaining $500,000 had been deposited, and that he could not contact the bank account holder, leading Farook to contact the police.

The court heard that Madarssamarecar defaulted on his payments to the investors of The Gold Souk Investment Holding when investigations into Farook’s complaint began in January 2019.

To buy time, he lied to the investors that their money had been stolen in Malaysia, after he had used the funds to purchase $10 million in Malaysian ringgit.

Court documents did not provide details on the status of the $2.7 million that Madarssamarecar had received from Farook.

Sivakumar faces two charges for criminal breach of trust for his alleged role in the incident. His case is still before the courts.