Profitable Plots, EcoHouse, A2A and Macro Realty (The thought process of EcoHouse scam victims.)

UPDATE (3 AUG 17):
Macro Realty Developments Pte Ltd promised returns as high as 18 per cent yearly.

Singaporean police are investigating a property company believed to be involved in a ponzi scheme that conned hundreds of Malaysians investors out of millions.

According to an ABC report, the company is controlled by Australian Veronica Macpherson and received over A$110 million (S$119 million), mostly from Singaporean and Malaysian investors.

Although based in Singapore, Macro Realty Developments Pte Ltd offered investments to fund property developments in Pilbara, Western Australia.

Investors were promised returns as high as 18 per cent yearly.

The investment scheme was reported to have been heavily promoted in Singapore and Malaysia since 2014.

However, KPMG liquidator Hayden White told ABC that the scheme collapsed last year with creditors owed more than A$200 million.

...the alleged Ponzi scheme raised almost A$110 million from its 1,700-plus investors who were told their funds were being used for property developments but were instead used to pay the company's expenses, including the interest payments to early investors.

Source: http://www.asiaone.com/singapore/hundreds-singapore-and-malaysia-investors-duped-millions-property-company

Remember what is the question we must ask?
"How in the world is your company able to pay me XX% per annum when the properties are still being built and not generating any income?"

UPDATE (6 APRIL 17):
Profitable Plots, EcoHouse and now A2A. Why do people keep falling for these?

Lesson:
Marketing presentation plus a well decorated office is enough to make some people part with their hard earned money.

Lesson:
This is tragic. In our golden years, don't be too adventurous with money. It could turn out to be a case of misadventure.
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Remember Profitable Plots? It was a huge Ponzi scheme and money paid by Singaporean investors were used to pay investors in the U.K.

Timothy Nicholas Goldring, 60, was sentenced to seven years.

"Investors lost some $3.1 million in the Boron bonds scheme between November 2008 and August 2010. The two directors of land banking firm Profitable Plots promised 12.5 per cent in returns within six months. Most of the money ended up being used for unrelated purposes, including paying off debts to investors from the firm's UK business."

Source: AsiaOne, June 2014.

EcoHouse Group was international too and there were investors who gave money to EcoHouse in the USA as well:

Click to enlarge

Source: Alternative investments.

The blogger and investor has woken up to the fact that it is a scam, I believe.

I share this because I think it is useful to see what an average and reasonably intelligent investor's thought process might look like before he plonked down not an insignificant amount of money in an investment proposed by EcoHouse.

In summary? The investor

1. Liked the promise of very much higher returns.
2. Liked the relatively short investment horizon.
3. Noted a booming economy.
4. Noted the purported track record.
5. Noted the purported backing by the government.
6. Noted the purported 100% security of the investment.

EcoHouse Group was an elaborate scam and they knew how to push all the right buttons to get people to part with their money.

Most investors sucked in by the scam are probably swayed by points 1 and 2 above and were just nudged into the cooking pot by points 3 to 6. They probably didn't even bother verifying the truthfulness of points 4 to 6.

To me, all the justifications made to invest in projects by EcoHouse should have taken a back seat because the most important question to ask should have been:

"How in the world is your company able to pay me XX% per annum when the properties are still being built and not generating any income?"

Now, if we should be approached by salespeople or "advisors" promoting similar investments and I dare say that there are still quite a few around, what should we do?

"Seek as much transparency as possible. If they do not understand exactly how a manager is making money, do not invest. If there is a secret process that cannot be explained, run."

Read:
Samuel Israel, hedge fund manager of a Ponzi scheme.

Related post:
EcoHouse: Questions we must ask and people I detest.

EcoHouse: Questions we must ask and people I detest.

In the Singapore Armed Forces, we have a saying that "TSR is written in blood."

TSR stands for Training Safety Regulations, if I remember correctly. The regulations are written in blood because new regulations are introduced or existing ones improved after some fatal accidents. Unfortunate, I know, but being humans, a failing that we have is a feeling of invincibility until bad things happen to us.

This is why some friends and fellow bloggers feel that the best way for people to learn is through experience, falling down and picking themselves up again. OK, not everyone is able to pick themselves up again which is why I think fall prevention is still the way to go.

Having said this, there is a camp that believes no amount of education is going to work if people are not willing to listen or if they choose not to believe. Fair enough.

How many investment scams have been exposed? How many people have been scammed? How many millions of dollars have been spirited away? How many confidence tricksters have been convicted and put behind bars?

Surprisingly, many people are still falling victim to scams.

Hundreds of investors here, who ploughed millions of dollars into the hands of a developer claiming to be working with the Brazilian government on a social housing programme, were left fearing the worst after the Brazilian Embassy said on Thursday (Aug 14) that its government had no dealings with the company.

EcoHouse, which has abruptly shut down its Suntec offices, is neither affiliated with the Brazilian national housing programme nor registered as a partner of its state-owned bank.

On its website, EcoHouse claims that it was chosen by the Brazilian government as “the only UK company to date officially authorised to build developments under Minha Casa, Minha Vida”, which aims to provide three million homes for the country’s growing middle class.

The company was founded in 2009 by Mr Anthony Armstrong Emery. Various media reports have put the number of Singapore investors in EcoHouse projects at between 800 and 1,500. Up to S$70 million had reportedly been ploughed into three housing projects.

Some investors have begun legal action against EcoHouse to recover their capital investments, which amounted to a minimum of £23,000 (S$47,810) per unit.

EcoHouse had promised a 20 per cent fixed rate of return for a 12-month investment contract, but many investors said they have not received their returns or their capital despite their contracts reaching maturity.

Source: CNA

I feel very sad for these people who have lost their money and I would like to remind everyone that as investors for income, we must always ask the questions that matter. See related post #1 below.

I really detest people who have no qualms about cheating others of their hard earned money. I also detest those who work for them knowing well what they are doing and I do know of someone who was involved in one of those gold investment scams. Just because we know how something works and that we can make money from it does not mean that we should do it. To say nothing of legality, what about ethics?

The Chinese people have a saying:

君子爱财取之有道
"A righteous man makes money in righteous ways."

Related posts:
1. EcoHouse Group placed on IAL.
2. Just like taking candy from a baby.