Cash News
SINGAPORE: The mastermind of a multi-million-dollar Ponzi scheme disguised as cryptocurrency investments was jailed for six years and fined S$16,000 (US$12,284) on Monday (Aug 26).
Yang Bin, a 61-year-old Dutch national, admitted to incorporating and running a company which purportedly owned 300,000 machines that could mine cryptocurrency and generate enough revenue to give investors daily returns of 0.5 per cent.
In reality, Yang’s company had no such machines and instead used money from later investors to pay earlier investors.
Yang – who was listed by Forbes as the second-richest man in China in 2001 – pleaded guilty to eight charges, including amalgamated charges of conspiring to cheat, working without a valid work pass and hiring a man without a valid work pass as an employee.
Another 11 charges of a similar nature were taken into consideration for his sentencing.
Yang incorporated A&A Blockchain Innovation on Apr 20, 2021 after arriving in Singapore on a social visit pass. He did not have a legitimate work pass to run his company, of which he was chairman.
He hired co-accused persons Lu Huangbin as A&A’s CEO, Chen Wei as his personal assistant and a director, and Wang Xinghong as chief technological officer. All three reported to Yang, who was the sole person in charge of the company’s funds.
Yang directed Chen to collect cash from investors, which he used for his personal expenses.
Of the co-accused, only Wang has been dealt with. He was jailed for five years on Aug 6 for his role in the scheme. Lu and Chen’s cases are pending.
INVESTORS PROMISED FIXED DAILY RETURN OF 0.5%
Between May 20, 2021 and Feb 15, 2022, A&A offered its Chain Mining Scheme to local investors, promising them a fixed daily return of 0.5 per cent on their investment, which would come from mining cryptocurrencies.
In marketing materials to investors, A&A claimed it had agreed with Yunnan Shun Ai Yun Xun Investment Holdings to acquire 70 per cent ownership of 300,000 mining machines in Yunnan, China.
Yang sought to create a “veneer of legitimacy” by creating such marketing materials, including presentation slides and videos to “induce investors into parting with their monies”, Deputy Public Prosecutor Wong Shiau Yin said.
Yang placed Lu in charge of marketing to reach out to investors.
The mining machines could purportedly mine cryptocurrency, such as Bitcoin and Ethereum, and could generate revenue for returns in such a manner.
In reality, there was no such agreement, with A&A instead operating a money circulation scheme where it used money from later investors to pay returns to earlier investors.
At Yang’s instruction, Wang developed an application that investors could ostensibly use to buy tokens to invest in the mining scheme and monitor their daily returns.
The app was the “entire ecosystem and foundation” on which the scheme operated, added Ms Wong.
APP SHOWED FAKE RETURNS
In fact, the app was a centralised software where system managers could input random figures to show fake returns.
The scheme attracted more than 700 investors who invested about S$6.7 million between May 2021 and February 2022.
Yang’s charges involve about S$1.8 million across 12 victims, who lost around S$1.1 million after accounting for returns that some had obtained through the scheme. Yang did not make any restitution.
A total of S$100,000 seized from Yang’s residence and he admitted that the sum belonged to investors who invested in A&A.
Ms Wong sought six-and-a-half years to seven-and-a-half years’ jail and a S$16,000 fine for Yang, describing him as the mastermind who was at the “top of the hierarchy” within the scheme.
She cited Yang’s premeditation and the sophistication of the scheme due to the app and marketing materials created.
Yang’s lawyer, Teo Choo Kee, argued for five years’ jail or slightly more for Yang, hinging on the sentence that was handed to co-accused Wang.
Mr Teo said Yang was only slightly more culpable than Wang, who also played an important role in perpetuating the scheme, and not to the extent that his jail term should be one-and-a-half years more than his co-accused.
The lawyer added in mitigation that Yang had pleaded guilty early and cooperated fully with the authorities.
Mr Teo said his client had received less from the scheme than Wang, who had obtained about S$100,000.
However Ms Wong pointed out that the authorities had recovered S$100,000 from Yang’s residence, all of which had been obtained through his bogus scheme.
Addressing the court via a Mandarin interpreter, Yang said he had stomach cancer.
District Judge Brenda Chua noted that Yang had been the mastermind of the scheme and overall person-in-charge of the company, with a higher culpability than Wang.
Commenting on the charges, the judge said that not only were “significant amounts” involved, but that no restitution had been made to victims.
For conspiring to cheat, Yang could have been jailed up to 10 years, and fined. As his charge was amalgamated, he could have received twice the amount of punishment.
For working without a valid work pass, he could have been jailed up to two years, or fined up to S$20,000, or both.
For hiring a foreign employee without a valid work pass, he could have been jailed up to a year, or fined between S$5,000 and S$30,000, or both.