Federal Court allows forfeiture of RM1.11mil from illegal deposit-taking scheme investors


PUTRAJAYA: The prosecution succeeded in its appeal at the Federal Court on Wednesday to forfeit RM1,112,700 from 79 investors involved in an illegal deposit-taking scheme.

The three-man bench comprising Chief Justice Tun Tengku Maimun Tuan Mat, Court of Appeal President Tan Sri Abang Iskandar Abang Hashim, and Federal Court judge Datuk Sri Hasnah Mohammed Hashim overturned the decisions of the Court of Appeal and High Court.

Stating that there was merit in the appeal, Justice Tengku Maimun ordered the RM1,112,700mil to be forfeited to the government revenue.

Based on the facts of the case, Venus FX was a company providing a trading platform specialising in foreign exchange, and the respondents (79 investors) were members of the Venus FX scheme.

Representations were made that individuals depositing amounts ranging from US$100 to US$10,000 into the company would be entitled to a daily return on investment ranging from 4 to 6% over 80 days.

They would then be registered as members with access to the company’s webpage. Venus FX members were also paid a commission for every new member they recruited.

In 2016, Venus FX management made an announcement on its website instructing all members to deposit their investment sums into a bank account belonging to Yayasan Usaha Ventures Malaysia (YUVM).

Members were informed that YUVM was an authorised foundation governed by the Finance Ministry and the parent company of Venus FX.

The 79 investors paid monies to the YUVM bank account, however, during a meeting in Sept 2016, a Venus FX member informed the other members that YUVM is not associated with the company and that the announcement was a scam.

The members were also told that YUVM's chairman falsely claimed that the foundation was government-authorised and that he was pursuing a banking license under the Financial Services Act 2013.

This license was supposed to be held by YUVM, with Venus FX as its subsidiary managing the license, and to obtain this license, it was stated that RM50 million had to be deposited with YUVM.

Two investors lodged police reports and an investigation of Venus FX’s investment scheme showed that two individuals had commenced the forex trading without a Bank Negara Malaysia licence and that the YUVM chairman and treasurer were also involved in it.

On Dec 14, 2017, the prosecution applied to the High Court to forfeit RM2.2mil from YUVM on the basis that the funds were illegal proceeds under Section 137 of the Financial Services Act 2013.

A notice was published to allow any third party with an interest in the seized funds to file a claim and present reasons as to why it should not be forfeited.

As a result, one investor, R. Sudesh, filed an application with the High Court, seeking to represent 78 other investors, requesting the return of RM1,112,700 out of the RM2.2mil seized.

On May 28, 2019, the High Court ruled in favour of Sudesh and the other investors, ordering the RM1,112,700 be returned to them, which the Court of Appeal upheld on Dec 15, 2022.

Deputy Public Prosecutor (DPP) How May Ling, assisted by DPP Parvin Hameedah, contended that the funds seized from YUVM's bank account were derived from an illegal activity, therefore, deposits made by third parties were also tainted with illegality, and the respondents could not be considered to have a legitimate legal interest.

She argued that both the High Court and the Appellate Court erred in law in determining that the respondents were victims of fraud because the evidence indicated that the respondents willingly deposited money into the YUVM bank account as Venus FX investors, expecting returns on their investments, without any coercion.

Lawyer Ravi Nekoo representing the respondents, submitted that the monies in YUVM’s bank account belonged to the 79 investors, adding that the funds were never removed from the said account to be used for any unlawful activity.

He said his clients were victims of a scam and did not receive or use any proceeds of an unlawful activity. - Bernama

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