Case Study #015: Ponzi Scheme
JMS Rogers was approached by a client who was owed the sum of SGD$27,000. This was the principal sum that was invested by our client to a company that promised guaranteed returns of 2 per cent a month.
For the first few months, returns were paid on time, but eventually, payments stopped.
Our client chased for payments but with no success. Many excuses were given by the company as to why the payments were not being made.
After 1 year of chasing, our client came to us for help. We studied the documents, the contracts signed, and investigated the business activities of the company.
Through our investigations, we discovered that there was no viability for the company to generate such returns and were probably running a small Ponzi scheme.
Upon confronting the company with all our findings, the company made payment in full within 2 weeks.
What we can learn from this:
- When an investment states that the returns are guaranteed, always cautiously proceed. They use this to entice you to invest but they may not have the viability to do so.
- Do your due diligence into the investment to see if their claims for returns are viable. Study every facet of the investment and then conclude.
- Ensure that all contracts are vetted by a lawyer and seek advice from government agencies on whether such investments are legitimate.
- View more about us Singapore Debt Collection
