The head of a Taiwan-based investment company surnamed Tseng (曾), along with 151 others, was indicted on Thursday for allegedly selling offshore funds in contravention of banking laws, among other offenses, the Taipei District Prosecutors’ Office said in a statement.
Tseng recruited people in Taiwan to illegally sell offshore funds, amassing more than NT$13 billion (US$397.19 million) from more than 800 investors, prosecutors said.
An investigation showed that on May 25, 2010, Tseng established the company and recruited 11 people as general managers, administrative vice presidents, deputy general managers, directors and supervisors, the statement said.
Photo: Wu Sheng-ju, Taipei Times
He later hired an additional 140 people as managers, deputy managers, assistant managers and sales personnel, it said.
Tseng and his associates promoted, solicited and sold offshore financial products without approval from the Financial Supervisory Commission (FSC), the statement said.
They guaranteed annual investment returns of 8 to 15 percent, claiming minimal or no risk of loss, and promised the return of principal upon maturity with additional agreed returns, prosecutors said.
Sales personnel took investors to Hong Kong to open accounts, they said.
Following instructions from sales personnel, the investors transferred funds for the products by exchanging foreign currency and remitting it to designated banks to buy offshore financial products, they said.
Investors would verify their portfolio’s performance through account statements provided by the company or by logging into a Web site, while the company would take commissions and referral fees from transactions, prosecutors said.
This continued until investors in February last year discovered that they were unable to redeem their principal or interest, resulting in the loss of their investments, the statement said.
The company allegedly defrauded 804 individuals with total investments exceeding NT$13 billion, the office said.
The office indicted Tseng and the 151 staff over contraventions of the Organized Crime Prevention Act (組織犯罪防制條例), illegal sale of offshore funds under the Securities Investment Trust and Consulting Act (證券投資信託及顧問法) and illegal banking operations under the Banking Act (銀行法).
The office said that three other suspects have absconded and been placed on a wanted list, while a request has been filed with the court to confiscate approximately NT$1.3 billion in assets.
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