FAQs related to Joint Raids on Companies Suspected of Conducting Illegal Financial Schemes Using Gold

254300_10151224101604872_1296570642_nIn light of numerous queries received by the enforcement agencies on recent actions taken against companies suspected of operating illegal financial schemes using gold, the following set of Frequently Asked Questions and Answers are for the benefit of members of the public, in particular the affected parties.

Frequently Asked Questions

Q1:  Why did the authorities raid such companies?

A:  The raids were conducted in the interest of protecting the affected investors from putting more money at risk as well as the public at large. The companies that are involved are investigated for suspected offences that include illegal financial schemes, money laundering, tax evasion, false description including misrepresentations, appointment of agents without licence and failure to lodge statutory documents.

Q2:  What is the concern with the business model of such companies?

A:  The concern is that such companies are operating schemes believed to be not sustainable. Such companies promised high monthly returns to the investors and a guarantee to buy back the gold. Such schemes are not funded through actual gold trading but from new monies invested into such schemes. Frequently, the amount of assets and monies held by such companies do not commensurate with the amount collected from the investors.

Q3: Why have the authorities only taken action now? 

A:  Any enforcement action can only be taken when it has been established that there is reason to believe an offence has been committed. This is to avoid hasty or reckless enforcement actions that may affect genuine businesses.

Q4:  What is the status of the actions by the authorities?

A:  The investigations are now ongoing. Regular statements will be issued by the authorities to keep the public informed of the progress of the investigations. Members of the public are advised to only refer to information from official statements issued by the law enforcement agencies for updates on the case.

Q5:  How long will the investigations take?

A:  The length of the investigations would depend on the complexity and magnitude of the case. The complexity increases due to the international dimension of such cases. Cooperation by the affected parties will facilitate the investigation process. The investigations are accorded high priority and all necessary resources are being mobilised by the relevant enforcement agencies to bring the investigations to the earliest conclusion.

Q6:  Why have the assets been frozen and seized?

A:  In cases of suspected illegal financial schemes, the authorities conduct search and seizure operations to secure the evidence and to avoid the companies from destroying or suppressing evidence. This also prevents the assets from being dissipated to the detriment of the investors. Under section 44 of Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA), the law enforcement agencies are empowered to freeze any assets when it is suspected that an offence of money laundering has been committed.

Q7:  What is going to happen to the assets and gold that have been seized?

A: Any assets seized during the course of raids are meticulously documented and accounted for and maintained in safe custody. If there are criminal proceedings, such assets will only be dealt with at the direction of the Court.

Q8:  Can an affected investor claim his/her money or gold from the seized assets?

A:   Assets seized during the course of the investigations can only be dealt with at the direction of the Court. Investors may file to the Court a third party claim for the return of his/her money or gold. Information on whether, and how, to file a claim will be provided after court proceedings are concluded.

Q9:  What is the advice to members of the public who would like to invest? 

A:  The public is advised to be cautious of investment schemes that promise high returns with seemingly low risk, with an arrangement that guarantees the return of the principal amount invested. Members of the public are also advised to check with the relevant authorities when dealing with companies or individuals offering such seemingly attractive business opportunities or financial services that are not licensed by the authorities. As a guide, members of the public are encouraged to observe the following when evaluating an investment scheme:

  • Remember – if it sounds too good to be true, it’s probably not true;
  • Beware of Ponzi schemes. They are fraudulent investment schemes where the operators will take money from new investors to pay earlier or existing investors. Eventually it will reach a critical stage when there are not enough new investors to support this and subsequently the whole scheme collapses;
  • Deal only with licensed financial institutions and authorised dealers;
  • Check with the relevant authorities before investing/ depositing;
  • Don’t be pressured or rushed to invest;
  • Be extra careful with investments over the internet;
  • Be sceptical of any investment opportunity that is not in writing;
  • In case an investment has been made, keep copies of all the investment  documentation; and
  • Refer to the following  financial fraud alert websites:

If you come across fraudulent investment schemes, you are encouraged to lodge a police report.

Joint statement by:

  • The Royal Malaysia Police
  •  Ministry of Domestic Trade, Cooperative and Consumerism
  •  Companies Commission of Malaysia
  •  Bank Negara Malaysia



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