Four held in massive pyramid scheme
published : 11 Apr 2015 at 12:02
writer: Online Reporters
Police have arrested four executives of UFun Store Co Ltd, which operates an alleged pyramid scheme of the same name that involves 14,700 people and 10 billion baht in possible damages.
Thai Rath Online reported on Saturday the executives were charged with collaborating in fraudulent borrowings. The police are also hunting another Thai and three Malaysians believed to be the masterminds, according to assistant police chief Pol Lt Gen Suvira Songmetta, who led the raids at their residences this morning.
The police said they acted on several complaints with combined damages of 10 billion baht. Some 14,700 of people in Thailand, Malaysia and Indonesia reportedly fell victim to the scheme. The Anti-Money Laundering Office also seized 250 million baht of the company's assets.
UFun sells cosmetics, food supplements and other products to members in a complicated business model that focuses on bringing in new members rather than selling the products, the police said.
Rittidej Warong from Si Sa Ket, 40, was arrested at his residence in Khan Na Yao district in Bangkok this morning. A lawyer by profession, Pol Sub Lt Rittidej holds 51% of the business.
Rattavich Thiti-arunwat, 34, was taken into custody at his house in Chiang Mai. Police also seized two luxury cars, a dozen brand-name bags and around 40 luxury watches at his house in Bangkok's Bang Kapi district. Mr Rattavich, a top team leader of the business, claimed his business was legitimate and was planning to expand abroad.
Chaithorn Thonglorlert, 40, was apprehended at his residence in Bang Na, Samut Prakan province. Police also seized money transfer slips of hundreds of thousands of baht each and ringgit banknotes there. He is a shareholder of the company.
Police chief Somyot Poompanmoung told a briefing at the company's head office in Bang Na after the raids that several people had filed complaints against the company through government aid centres after they had not received their shares of promised profits since 2014.
"We looked into its business and found it was in fact a pyramid scheme. We revoked its corporate licence on April 8 and sought eight arrest warrants for its shareholders and directors, three of whom are Thai," Pol Gen Somyot said.
UFun made money by persuading people to invest with it through its website and other online channels.
It offers five investment positions: one-star ($500), two-star ($1,000), three-star ($5,000), four-star ($10,000) and five-star ($50,000). After becoming members, the customers will get points for discounts when buying products.
The members are also asked to persuade others to join their teams by buying UToken, a virtual currency of its own used to buy the company's products.
"We found the company did not mention products it registered to sell in its sales pitches. Instead, it urged clients to expand their teams by offering in return high-value items such as cars or gold bars. That way, the money it made mainly came from new members rather than from selling the products," he said.
The other suspects on arrest warrants in this case are three Malaysians — Tae Kim Leng, 40, a shareholder and director; Lee Kuan Ming, 38, a director; Wong Ching Hua, 42, a shareholder and director — and a Thai, Arthit Pankaew, 47, also a shareholder and director.