While the masterminds behind multi-level marketing company Sunshine Empire — dubbed as Singapore’s biggest Ponzi scheme — were eventually prosecuted and convicted for their fraudulent dealings, it remains uncertain as to whether all of the victims of the elaborate scam could recover their money.
Through Sunshine Empire, thousands of unsuspecting Singaporeans had purchased close to 26,000 “lifestyle packages” ranging from S$240 to S$12,000 for 15 months between Aug 2006 and Nov 2007, lured by the promise of high returns at little to no investment risk.
Entrepreneur James Phang Wah, who owned the firm, was found guilty of criminal breach of trust. He subsequently served a nine-year prison sentence and paid a S$60,000 fine.
Phang was then extradited to Malaysia after the end of his jail term, after which he stood trial in Dec 2011 for violating Malaysia’s Banking and Financial Institutions Act due to accepting illegal deposits.
Sunshine Empire was charged in Malaysia in March 2009 under the same act for accepting deposits from the public without a valid licence. The company pleaded guilty and was fined RM2 million in June 2010.
Jackie Hoo Choon Cheat, Sunshine Empire’s director, was handed a seven-year jail term in Singapore. In August 2016, he was charged in Malaysia with the same offences upon being released from Singapore prison.
Phang’s wife, Neo Kuon Huay was fined S$60,000 for falsifying payment vouchers.
Phang and Hoo appealed to the Court of Appeal to have their case reviewed, but the court upheld the duo’s convictions in Sep 2012.
S’pore Govt has been “safekeeping” confiscated money for more than 10 years
The Commercial Affairs Department (CAD) raided the Sunshine Empire in Nov 2007. It had then only managed to recover S$21 million out of almost over S$190 million that was swindled from investors, who ranged from university students to retirees.
CAD’s position to the victims in 2013 was that it was “attending to matters concerning the disposal of the seized monies” and that the process to lodge a claim will be posted on its website when the matters had been finalised.
Around six years since the case and nearly two years since the CAD’s last reply regarding the status of the claims, CAD stated in an email to TOC that it was only able to “consider how to deal with the seized assets after September 2012, when the Courts of Appeal upheld the conviction of the persons involved”.
“Since then, we have been working towards finding an appropriate process to dispose of the assets seized,” said the department in an email on 16 June 2014, noting that it would entail a complicated process as this is one of its largest seizures and the number of potential claimants involved is “unprecedented”.
“We have since involved different agencies in our deliberation. Admittedly, this has taken some time,” CAD added, stressing that it is in “the advance stages of finalising the matter” and has not “neglected the concerns of the investors”.
Fast forward to 2017, the Singapore Government said it was still “safekeeping” and has yet to decide what to do with the recovered funds even after 10 years it confiscated the S$21 million from Sunshine Empire’s bank accounts.
According to a news report dated 24 Dec 2017, the Singapore Police Force told Chinese papers Shin Ming Ri Bao that both the Attorney General’s Chambers (AGC) and CAD were still “deciding” on how to manage the S$21 million.
To date, the monies recovered remain in the police’s possession, with no indication of whether the victims will be contacted to see who it would return the monies to.
The Malaysian High Court seized RM20 million (S$6.5 million) from Sunshine Empire
In Malaysia, Phang was charged under Section 25(1) of the Banking and Financial Institutions Act 1989 (BAFIA) for taking illegal deposits at two premises.
The first was in Menara Uncang Emas, Jalan Loke Yew between 14 July 2006 and 17 Oct 2006, and the second was at KUB.com Building, Jalan Yap Kwan Seng between 18 Oct 2006 and 4 April 2008.
Its Malaysian affiliate company, which represented by its director Mohd Azlan Azman, pleaded guilty and was fined RM1 million (S$3 million) for each count.
Prosecuting office Alvin Ong believes the scheme had involved a total of RM230 million (S$76 million), of which over RM20 million (S$6.5 million) was forfeited by the Malaysian High Court in 2013 under an anti-money laundering and anti-terrorism financing law.
Flagged multiple times but no action taken back in 2007
One of the victims, Choo Lai Chong, said in an interview with The Straits Times on 7 Jan 2018 that he never recovered his money despite when the company was proven to be a sham and that he had testified in court.
Mr Choo, a retired electrician, fell into the scheme in July 2007 after being persuaded by a friend and bought four Gold Prime packages costing between S$9,600 and S$12,000 each.
A month after investing his money into Sunshine Empire, he received returns of S$14,000 which he used to buy 10 more Gold Prime packages and one Silver Merchant package for S$1,200.
“Word went around that the firm was being investigated in Malaysia. And that (Sunshine founder James) Phang and his followers were trying to secretly move everything to Hong Kong,” said Mr Choo.
This has prompted him and a group of more than 10 investors to file a police report against the company.
It was said that Sunshine Empire was flagged multiple times by members of the public in 2006, but the Singapore authorities did not take action until late 2007.
“The game is over, our money is lost and we cannot get it back,” said Mr Choo, who has lost about S$90,000 of his savings due to the scam.
Victims were told not to file police reports, wait for updates from CAD
It is worth noting that the CAD’s website has been taken offline in 2016. While the reason for closing down the website is unknown, members of the public are still able to access the website via an internet archive.
In a thread discussion on Sam’s Alfresco Coffee forum, one netizen reproduced a list of questions and answers related to Sunshine Empire which were previously viewable on the CAD’s website before it was taken offline.
One of the questions asked if a victim of the Sunshine Empire scam can recover the lost money, to which the CAD answered: “We need to comply with the legal requirements for disposal of the seized monies. These funds cannot be dealt with pending court proceedings.”
When being asked about the progress of the proceedings, CAD answered that the case has been fixed for trial in the Subordinate Court 7 at the time, and that “further updates on the proceedings will be posted on this website”.
The CAD also noted that Sunshine Empire scam victims do not have to make a police report “at this point in time”, while those who have made a report to CAD before will not need to lodge another police report as the CAD is a unit of the Singapore Police Force.
“If you have reported your dealings with Sunshine Empire to the CAD and provided your personal particulars and details of your dealings, including payment of monies to Sunshine Empire, you should wait for updates from the CAD,” it said.
The CAD was basically telling the victims not to file a police report “at this point in time” and wait for further updates on its website.
But the chances for the victims to get back their lost money are slim to none now, considering that the police may not even know who are the interested parties to the claim and that they have been left uninformed about the case since the CAD’s website was taken offline.
TOC has recently reached out to the CAD via phone call and was told by ASP Ho Ban Hsiung, the officer who took over the case since 2010, that the CAD is still processing the monies as the matter is “complicated”.
When asked if there is any timeline for the matter to be resolved, ASP Ho said that the victims will be informed by the CAD when the matter has been finalised.
However, when pointed out that CAD had asked victims not to file police reports and there might be no records by then, no clear answers were given.
Is CAD hoping that the victims to eventually forget about the case and allow the matter to die off in another ten twenty years?