Four accused in NT$70m commodities ‘scam’

By Jason Pan  /  Staff reporter

Sat, Jan 13, 2018 - Page 4

Prosecutors have indicted a Guatemalan businessman along with three Taiwanese men working for him on fraud charges, after they were accused of making about NT$70 million (US$2.36 million) through an investment scam.

The Guatemalan, whose first and last name initials were R.H., set up a trading company in New Taipei City’s Tamsui District (淡水), which he operated with a business partner surnamed Huang (黃), an executive surnamed Chuang (莊) and another Taiwanese.

R.H. and the three men enticed more than 30 investors to invest a total of NT$70 million in schemes offered by R.H., according to the indictment published by the Taipei District Prosecutors’ Office on Thursday last week.

The company promised returns of between 3 and 6 percent each month from investment in a Guatemalan coffee business and trading in commodity futures, investigators said.

From 2013 to 2015, Huang and Chuang marketed the schemes, while R.H. told investors that he had good business contacts in Guatemala, which allowed him to make stable profits.

R.H. told investors that he had established a company in Hong Kong that shipped coffee beans from Guatemala and that he could export the produce to countries around the world at marked-up prices, investigators said.

He told Taiwanese investors that he needed financial liquidity to underwrite the shipping expenses, with shipping terms between 30 and 70 days, investigators said.

Investors were told they would stand to make a profit of 30 percent on their investment after the produce arrived and the importers paid their bills, but only some were able to reclaim their original investment, while others never got their money back, investigators said.

In other cases, investors did make a profit at the start, but from 2015, R.H. claimed that the coffee bean business and commodity futures trading had gone sour and that he did not have any earnings, the indictment said.

Prosecutors in April last year raided the company and R.H. and the three Taiwanese suspects’ homes, they said.

After being summoned for questioning, R.H. was freed on NT$1 million bail.

During questioning, R.H. said that most of the NT$70 million put up by investors had been lost due to the company’s inability to turn a profit during an economic downturn.

However, prosecutors said they found evidence of fraud and believed that R.H. colluded with Huang and Chuang to pull off an investment scam.

The company first imported coffee beans and other commodities from Guatemala to gain trust from Taiwanese investors and procure loans, they said.

Prosecutors also sought to pursue R.H. on forgery charges, as they said he admitted to having falsified transaction records for the company.

Prosecutors said they had done their best to trace the whereabouts of the NT$70 million, as only part of the amount was found, but they believed that most of the money has been diverted into foreign bank accounts by R.H. and his family.