Internet scam fleeces investors

Henry C.K. Liu hliu at mindspring.com
Sun May 23 21:06:56 PDT 1999


Monday May 24 1999

Internet scam fleeces SAR investors

JO PEGG

A sophisticated global investment scam using

Internet sites to con buyers has fleeced Hong

Kong people of millions of dollars, UK

investigators on their way to the SAR have

revealed.

Police investigating the scam estimate the

fraudsters - who have set up bank accounts

and offices in Switzerland, Guernsey, Belize,

Austria, Malta and the West Indies - could

have netted billions of dollars worldwide,

much of it from investors in Hong Kong,

Singapore and other Asian countries.

Potential investors are sent brochures offering

shares in funds at "special" low prices, and

are referred to Internet sites which appear to

track the sham funds' daily growth.

But when buyers try to pull out, they are

advised to switch to another "promising

investment" and send more money, told they

cannot have their money back, or their calls

go unanswered.

Detective Constable Martin Woods of

Britain's National Crime Squad said there was

little chance victims would get their money

back.

He said the sophistication of the con and the

money spent to make it look convincing

meant there may not be much left if the

brains behind the operation are ever caught.

The operation was uncovered through

documents found during a police raid on a

London solicitor's office over an unrelated

crime.

"There are an immense number of victims.

It's multi-multi-millions of dollars," Detective

Constable Woods said.

"Previous similar scams have netted billions

of dollars."

British financial investigator Tony

Hetherington said the operation had existed

under different names for at least four years.

He understood the masterminds were

Canadian and said investigators suspected the

scam was started with Colombian drug

money.

A Lam Tin engineer who sank more than

$120,000 into worthless investments said he

was convinced by brochures he received after

answering a magazine advertisement.

He monitored what he believed were

independent Web sites, and items about the

funds in the International Herald Tribune's

Internet edition, which he thought were news

items but were actually advertisements.

Detective Constable Woods, of the Money

Laundering Investigation Team, will interview

known Hong Kong victims - who have lost

about $2 million between them - at the British

Consulate early next month before going on

to Singapore.

He says the cases his team are investigating

would probably only scratch the surface, as

many local victims would have written off the

loss as a bad investment and not called police.

Three other local people have lost $1.5

million, $230,000 and $78,000.

A solicitor, magistrate and an accountant have

been arrested in London on suspicion of

laundering the proceeds of the operation

through British bank accounts.

Copyright ©1999 South China Morning Post Publishers Ltd.

All Rights Reserved.



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