Ten people have been charged with fraud after 1,115 people were convinced to invest a total of NT$4.35 billion (US$143.6 million) in Taiwan’s Mega Dynamo Technology Co (風能量源科技公司), Taichung prosecutors said on Friday.
Company executives duped investors by operating a Ponzi scheme for about 10 years, prosecutors said.
Earlier investors were paid with funds from more recent investors, and the victims believed the profits were coming from company revenue, prosecutors said, adding that investors were promised high earnings with assurances that the company would go public in the US and Australia, but lost their money.
Screen grab from the Eagle Investment Group Web site
The company supposedly focused on wind energy generation, as well as chemical and construction materials, they said.
Those charged include company chairwoman Chiu Tzu-chien (邱姿蒨), 64, general manager Lee Chun-lin (李俊霖), 64, and Lee’s wife, Chiu Hui-ying (邱慧瑩), 61.
Chiu Hui-ying is Chiu Tzu-chien’s younger sister and director of Kuangfeng International Co (廣豐國際開發公司), which was registered by Lee and has close ties with Mega Dynamo.
The trio, along with seven other Mega Dynamo executives and staff, were charged with breaching the Securities and Exchange Act (證券交易法), the Banking Act (銀行法), the Business Entity Accounting Act (商業會計法) and the Company Act (公司法), prosecutors said.
Investigators said that Mega Dynamo is registered in New Taipei City, but reported no revenue from its launch in 2008 to 2012, and from 2012 to last year, it only had an annual turnover of NT$200,000 to NT$3 million.
Company executives reportedly encouraged people to invest in the firm, saying that it owned the patent for “green concrete,” which was said to be half regular limestone concrete mix, with the other half recycled materials.
They reportedly said it had received approval and certification from the US Department of Energy to be used to store spent nuclear fuel, because it could absorb radioactivity and had heat resistant properties.
Prosecutors said they found documents presented at investment seminars, in which executives claimed to have inked contracts to supply “green concrete” to companies operating Chinese nuclear power plants, and investors were promised returns of 8.4 to 12 percent annually.
“Many of the investors were ... engineers, teachers, medical doctors, pastors and business professionals. One doctor invested more than NT$100 million,” Taichung prosecutor Wu Meng-chieh (吳孟潔) said.
Despite not paying out, Wu said company executives in 2018 continued to swindle investors by claiming to a good property development deal in China, but said that local residents were refusing to move.
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