SINGAPORE - Lured by the promise of 5 per cent returns, 18 investors put in a total of $2.2 million into what turned out to be a Ponzi scheme.

Some had doubled down on their investment after they received repayments on their supposed returns - but these were just done by the perpetrator to create a false sense of security.

The victims lost up to $300,000 each, as Wan Lai Kuan, 34, never planned to come true on the deals.

On Tuesday (Aug 30), Wan was jailed for five years and nine months after she pleaded guilty to six counts of cheating.

Another 12 cheating charges and one charge over the running of a fund management business without a valid licence were taken into consideration during sentencing.

The court heard that in 2014, Wan and two partners Chan Xuan Feng and Ang Shi Yi set up Skycastle Capital, a business dealing with fund management from foreign exchange trading for profit.

Wan's role was to conduct trading for clients, while Chan managed the firm and referred investors to Skycastle, said Deputy Public Prosecutor Lee Wei Liang.

For reasons not mentioned in court, both partners left the firm by June 2015. Chan continued to refer investors to Wan even after he left and was paid for it.

From 2015, Wan reached out to old acquaintances, pitching an investment opportunity that promised a 5 per cent monthly return on their invested sum.

She received between $3,000 and $720,000 from each investor. In turn, some of them told others about the investment opportunity and referred them to Wan.

To create a false sense of security, she prepared written contracts and made several repayments to the investors to trick them into thinking they were receiving genuine investment returns.

This prompted some of them increase their investments, handing her more funds.

But none of this money came from genuine investment returns, said DPP Lee, adding that Wan never intended to manage the investment portfolios for her clients and had no intention of fulfilling her contracts.

Between March 2017 and October 2018, 10 investors lodged police reports against Skycastle over its failure to pay them their investment returns, prompting the police to investigate.

It was found that Wan cheated 18 investors into investing $2,219,000 through the Ponzi scheme.

She spent almost $1.2 million on personal expenses, such as to run her cafe, settle loans, and pay for the daily expenses of her mother and former boyfriend Marcus Seah Wei Liang.

Seeking between 70 months and 76 months' jail for Wan, the DPP said she had taken deliberate steps to prolong the scheme and lured investors to hand her more funds by luring them into a false sense of security.

He added that the repayments made cannot be regarded as restitution as they were made to induce more investments.

Chan was not aware of Wan's cheating, but was fined in April this year for illegally carrying on business at Skycastle without a licence, said DPP Lee.

Skycastle has since been renamed ASDF, at which Wan remains a partner, said the DPP.

Those found guilty of cheating can be jailed for up to 10 years and fined.