Three arrested as 10 victims lose HK$5.1 million in a sophisticated investment fraud

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21st May 2024 – (Hong Kong) Hong Kong authorities have apprehended three individuals linked to a sophisticated investment fraud that swindled approximately HK$5.1 million from 10 victims. The largest single loss reported was HK$1.36 million. Arrests were made on 16th and 20th May after an extensive investigation involving transaction record analysis and CCTV footage. The suspects, reportedly sales managers at a trading company, are currently detained for further investigation.

The trio initiated their scheme in November 2022, operating from a Grade A office in Kowloon Bay, where they hosted investment seminars promising high returns with no risk. They marketed two investment opportunities: the sale of virtual tickets for personal lectures and a high-interest deposit scheme promising 7% monthly interest. However, both investment platforms were shut down in January 2024, leaving investors unable to retrieve their funds and revealing the fraudulent nature of the operations.

The fraudsters initially required participants to pay an entry fee ranging from HK$20,000 to HK$90,000, followed by additional payments in cash or cryptocurrency. They auctioned virtual tickets, which were quickly sold out due to high demand. Subsequently, the victims were instructed to resell these tickets at higher prices the following day. This cycle continued until the ticket prices reached THB 15,000, at which point the fraudsters used the funds from the deposit scheme to buy back the tickets, only to re-enter them into the market.

The scam collapsed early this year as the group failed to fund the buy-back scheme when a large number of tickets reached the designated buy-back price. The fraudsters then either refused to buy back the tickets or demanded exorbitant fees, leading to significant losses for the investors.