Man who ran Ponzi scheme jailed for 80 months

Mar 30, 2011
Man who ran Ponzi scheme jailed for 80 months
By Elena Chong

A MAN who ran a large Ponzi scheme by promising high returns to his investors in futures trading was jailed for 80 months on Wednesday. Dickson Tan Jing Yun took nearly $6 million in investment funds from 46 people from September 2004 to October 2008.

He paid out only $1.5 million to the investors, including principal repayments. No other restitution has been made, with $4.5 million lost either through trading or personal use.

Tan, 37, pleaded guilty last week to running a business of fund management without holding a capital markets services licence between 2004 and 2008. He also admitted to 10 charges of criminal breach of trust of $1.2 million, of which $834,332 or 67 per cent of the total sum were dishonestly converted to his own use.

Senior District Judge See Kee Oon, who took another 22 charges into consideration, agreed with Deputy Public Prosecutor Christopher Ong Siu Jin that there were aggravating features in the case which called for a stiff sentence.

'The premise was to lure additional investors to join the scheme while seemingly making good on initial promises of guaranteed fixed returns - essentially a confidence trick repeated many times over on potential unsuspecting victims,'' said the judge. He said Tan clearly planned his offences, and had systematically repeated his pattern of offending, A number of his clients were not well-educated and a few were above 50 years old.

Tan was an insurance agent in 2004 when he ran the scheme on the sidelines. He then joined another company as an associate manager and his last appointment was a branch manager with an insurance broker December 2007.

Mar 31, 2011
Man behind $6m Ponzi scam jailed
He's sentenced to 80 months; his clients got back only $1.45m
By Elena Chong, Court Correspondent

A FORMER insurance agent who ran a $6 million investment scam was sentenced to more than six years behind bars yesterday.

Dickson Tan Jing Yun, 37, promised his 50 victims fixed returns ranging from 10 per cent to 13 per cent a year.

They had no idea he was really running a form of Ponzi scheme - which means investors are paid not from genuine profits, but the money put in by new members.

Tan paid back only $1.45 million of the $6 million given to him by his clients, a third of whom had no more than secondary education.

He misappropriated at least $1.3 million and lost much of the rest through trading.

He received the 80-month sentence after pleading guilty to 10 charges of criminal breach of trust and one of running an unlicensed business.

Deputy Public Prosecutor Christopher Ong Siu Jin said Tan started the scheme on the side in 2004 while working for Great Eastern Life.

At that point, he genuinely believed it would allow him to achieve better returns for his clients. After trying it out with his own money for about a month, he started offering clients the option of trading in the futures market through the scheme.

Tan told them that he would invest their money through his personal trading accounts with Phillip Futures, guaranteeing them high fixed returns.

But investigations showed that most of the money his investors gave him was deposited into a joint bank account he held with his colleague, Ms Winnie Liw Lee Lan, 46. Most of its transactions were conducted by him.

Between September 2004 and October 2008, 46 people invested $5.97 million through Tan. Four others invested through Ms Liw.

The victims, whose ages ranged from their 30s to their 60s, invested between $50,000 and $350,000 each.

He invested either part of their money or none at all, said Mr Ong.

Some of it was used to pay other investors or pay off his overdrafts and Ms Liw's personal and credit card expenses. She has not been charged.

Tan's lawyer, Mr Noor Mohamed Marican, said his client was remorseful, had promised not to get involved in such trading ever again and had offered his apologies to the victims.

He said his client accepted that the losses were due to his own greed. He had been overconfident over his prospects of succeeding with the scheme and had lost about $1 million of his own and his father's money.

Agreeing that a deterrent sentence was necessary, Senior District Judge See Kee Oon noted that less-educated investors appeared to make up a sizeable number of Tan's clients.

He said the scheme was a confidence trick, repeated many times over on unsuspecting victims. The accused, he added, had clearly planned his offences, and had systematically repeated his pattern of offending.

elena@sph.com.sg

No matter how silly a scheme is. There's alway someone who will fall for it.
Considered the life saving of so many, 6 years is not heavy at all and may worth another try.

Cory

The swindler promised 10-13% annual returns guaranteed. It's very tough to make that kind of return consistently, and even for me 5-6% per annum is already not too easy. It really makes you wonder if people bothered to stop and ask themselves if this was truly possible....

The article also mentions that a lot of those swindled were uneducated folk or had low education. From my experience, even highly educated professionals have been cheated before due to their greed and avarice, so sometimes education should not be used as an reason for getting cheated, though it does play a role.

Just my 2-cents.

(31-03-2011, 09:55 AM)Musicwhiz Wrote: The article also mentions that a lot of those swindled were uneducated folk or had low education. From my experience, even highly educated professionals have been cheated before due to their greed and avarice, so sometimes education should not be used as an reason for getting cheated, though it does play a role.

Well, there is Education and there is Financial Education. I have many friends who are well-educated (University grads in various disciplines) but not working in financial related sectors. Most of them think that a combination of a POSB savings a/c, an ILP and CPF will be enough to set them for life.

I'm not sure if they know how to calculate compound interest, or that Stocks aren't expensive or cheap because of it's price per share or always aware that $1 today isn't going to be $1 tomorrow (in the how many burgers you can buy sense).

It's a bit sad really.