The husband and wife owners of Rixun Inc were yesterday taken into custody for allegedly using company products to defraud more than 2,400 investors nationwide of more than NT$6 billion (US$210.67 million).
After being questioned by the Taipei District Prosecutors’ Office, Hsu Hsien-ming (徐明賢) and his Japanese wife, Mitsuko Azuchi, were detained.
They were among 17 people summoned by authorities on Thursday.
The couple, along with an accountant and the company’s executives, could be charged with fraud, illegal fundraising and breaches of the Banking Act (銀行法), prosecutors said, adding that they allegedly used multi-level marketing, like a Ponzi scheme, to defraud investors.
An investigation showed that Rixun, established in 2013 with a core of 12 executives and accountants, conducted investment seminars throughout Taiwan to promote its video phone and its “Freely” tablet computer.
People were allegedly persuaded to invest NT$147,000 in a set of six video phones or “Freely” tablets, which Rixun would rent out to users, while the investors were promised NT$6,000 per month and a “guaranteed profit” of 15 percent for the first three years, prosecutors said.
Each investor was allegedly encouraged to sign up their family members and friends as lower-level members in the scheme, with a signing bonus of NT$14,000 for each new member and other bonuses for product promotion, they said.
Raids of Rixun’s headquarters and the couple’s residence on Thursday uncovered records for more than 2,400 members, while prosecutors said that the scheme brought in NT$6.3 billion in illicit profits.
Victims of the scheme filed complaints with local authorities to get their investment money back, with some saying that they realized it was a fraud after they received the promised NT$6,000 for a few months, but then nothing after that.
The couple registered several other companies in Taiwan, such as T-Voice Co (Japan) Taiwan branch, which they promoted as having the latest Japanese technology.
After questioning, two Rixun executives were yesterday released on NT$200,000 and NT$30,000 bail.
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