Three victims of a China investment scam have come forward to warn others that a syndicate of con artists are on the prowl in Malaysia.

Apparently, the scammers have already milked several thousand land owners in Sabah including the titled, lawyers, police officers and even hard-nosed bankers of several million ringgit.

The latest con seems to be a variation of the 'Gates, Soros' land scam which duped thousands by the time it was reported in the media in early November last year. It appears that a different group of people are involved in the latest scam.

"The police seem to be helpless since, on the surface, the operation seems to be legitimate," said a victim from Ranau who only described himself as Masilin.

"This scam has been going on since 2006 and is very active. The situation is getting out of hand as there are more people falling into this trap and giving their possessions away."

Masilin, who declined to reveal the extent of his loss, said victims were initially asked for RM100, a copy of their land grant and had to fill in a form “to get shares for money invested in China.”

The land is also pledged to banks as security to obtain investment funds.

The syndicate is reportedly currently organising roadshows among the Rungus community in Matungong and Kota Marudu in the northern areas of the state.

Victims of greed

Another complainant from Penampang, who prefers to be known as KDM, has an elder sibling who was sucked in by the scammers.

This resulted in a family feud which continues to simmer because some of their land holdings were involved. The victim refuses to disclose to family members the extent of his losses and whether he took out other loans for his “investment” in the scam. They fear that he may have resorted to loans from Ah Longs (loan sharks).

“The business is so ridiculous but it works to the benefit of the syndicate because human beings are greedy and dream of getting millions without having to sweat it out,” said KDM.

“I am disappointed that the police have not been able to do anything so far although many victims have lodged reports,” he added.

The modus operandi of the syndicate, according to KDM, is to get victims to initially attend a business talk for which they have to pay RM 100 for either dinner or luncheon. Also, they have to bring along a photocopy of their land title and fill in some forms giving their bank account number.

This, according to the syndicate, is for the purpose of crediting investment funds by electronic transfer. Instead, the bank accounts are cleared of whatever funds are deposited there including from mortgaging their land. It is not known how the siphoning of funds from bank accounts is done. The money is said to be for investments which will bring in lucrative returns.

"The rest of the explanation sounds like some some form of overseas money laundering by some gigamillionaires who seem to have an endless supply of money," said KDM.

"Each land title owner, depending on the size of the land, is promised somewhere between RM 500, 000 and RM one million in investment benefits."

KDM discovered the syndicate would begin each business talk or seminar by saying they "just started this year" although they have been around the last few years.

Another ruse used by the syndicate to lure victims, according to KDM, is to warn them that previous investors would deny receiving anything from their investments "because they wanted to keep it as a secret for themselves."

An ex-police officer, a victim of the scammers, was reported as saying in the local media that he lost RM30,000 to the scammers by the time he got out.

According to this victim’s version, “the survival of the syndicate depends on the recruitment of new land owners and the new funds obtained by the syndicate will be used as dividends, if any, for previous investors”. This appears to paint a picture of a pyramid, or ponzi, scheme at work.

A third victim, who requested anonymity to spare himself the embarrassment, disclosed that the syndicate leader would tell victims that “it is only a matter of time before the funds are released from the Bank of China and deposited in an offshore bank in Labuan for investors.”

"The syndicate became worried after many so-called investors began to get suspicious," said the victim. "They invited all landowners, including many VIPs, to a meeting at the Atlantis Restaurant in Penampang on June 22. The syndicate leader confidently informed the gathering that their investments are safe and the returns would be credited by August end this year."

No legal documents

The syndicate, according to victims, assures everyone that they are not running a scam. As proof, they claim that they have the blessing of the police, the Federal Ministry of Finance, and Bank Negara.

Such assurances invariably persuade the victims that they are on to a good thing.

"The syndicate failed to produce any legal documents. They just operate by word of mouth. Victims pull in other potential victims," said the Victim No: 3. "If you are dealing in foreign currency, as in this case, one should only deal with licensed financial institutions and authorised forex dealers."

The modus operandi of the company in the earlier 'Gates, Soros' scam, according to victims interviewed by consumer activist Hashima Hasbullah Yahya, was to appoint 10 to 12 principals in each state. The principals in turn have to appoint agents or runners and the number can run into hundreds.

The agents would deal with landowners who are interested in entering into a joint-venture with Microsoft founder Bill Gates, the world’s richest man, and his billionaire "partner", the hedge fund operator George Soros who was vilified for the 1997 Asian currency crisis which caused a run on the Thai baht, Indonesian rupiah and Malaysian ringgit, among others.

Police had then promised to issue a statement on the various police reports lodged. However, the issue seems to have been quietly buried Police had also then pledged to seek the co-operation of the Lands and Survey Department in the matter.

A Bank Negara spokesperson in Kota Kinabalu said that victims of the latest scam can forward details of their "investment" to Unit Penyiasatan Khas at Bank Negara in Kuala Lumpur. Fax: 03-2698 7467 or Tel: 03-2691 5090, 26984163, 26910824.