SINGAPORE: Two men have been arrested for their suspected involvement in a multi-million dollar gold investment scam, the police said on Tuesday (Feb 26).
The suspects were arrested by the Commercial Affairs Department with assistance from the Royal Malaysia Police.
The men are believed to be involved with Genneva Pte Ltd, a gold investment company, which sold gold bars under a buyback scheme between 2008 and 2012.
Under the buyback scheme, the company sold gold bars to customers with promised returns as high as 36 per cent per annum over a contract period.
Subsequently, Genneva implemented a “Gold Inspection” exercise, where customers were required to deposit their gold bars with Genneva when renewing their contracts.
“This was purportedly for the purpose of ascertaining the authenticity and purity of the customers’ gold. The customers were told that Genneva would return them an equivalent quantity of gold after three working days,” the police said.
Within two months, Genneva collected about 3,500kg of gold from the “Gold Inspection” exercise.
The company eventually failed to return approximately 640kg of gold to its customers as it was experiencing financial difficulties. The gold had an estimated market value of S$45 million.
One of the arrested men, who was the general manager of Genneva at that time, was charged in court on Feb 22 with with fraudulent trading.
The other man, who was the head of operations of Genneva at that time, will face a similar charge in court.
If found guilty, both men face up to seven years in jail, a fine of up to S$15,000, or both.