WATCH OUT: Crackdown on gold trading firms to continue

KUALA LUMPUR - This comes in the wake of raids on four gold trading companies -- Genneva Malaysia Sdn Bhd, Pageantry Gold Bhd, Caesar Gold Sdn Bhd and Worldwide Far East Bhd in Bandar Baru Sri Petaling -- that were raided in the past week for several offences.

A Bank Negara officer said it was looking into other companies that offered similar services and action would be taken if irregularities were found in the companies' dealings.

The officer, who declined to be named, said most of the companies offered get-rich-quick schemes, also known as Ponzi schemes.

"The investment money collected is used to pay out 'high returns' to other investors. Such schemes are illegal and fraudulent," he told the New Sunday Times yesterday.

On Monday, Bank Negara, together with police, the Domestic Trade, Cooperatives and Consumerism Ministry and the Companies Commission of Malaysia, carted away boxes of documents and gold bars from Genneva Malaysia's headquarters in Kuchai Lama, near here.

Five days later on Friday, simultaneous raids were conducted on the other three companies, where similar items were seized.

The companies were listed under Bank Negara's financial consumer alert list of known companies and websites that were not authorised or approved under relevant laws and regulations.

The raids came after months of extensive surveillance and intelligence gathering.

The trading companies were suspected of illegal deposit-taking, money-laundering, tax evasion and avoidance, false description, including misrepresentation and appointment of agents without licence.

Director fled with gold and clients' money

The Bank Negara officer revealed that in Friday's raid, officers were told that a director of one of the companies had fled with money from clients and some gold.

"We have received hundreds of complaints from people who said they were cheated and lost their investments in these companies.

"They claimed that the companies which they had bought gold from were closed when they went to collect it."

He said those who had fallen victim to these companies were afraid to lodge police reports as they feared they would not get back the money they had invested.

"If the offer is too good to be true, then chances are it is a scam," he said as an advice to the public