According to The Electric Paper:

MAS ADVISES INVESTORS NOT TO DEAL WITH BLACKLISTED FIRM

The returns for this investment is supposedly so ‘good’ that even famed billionaire investor Warren Buffett can’t hold a candle to it.

MrJames Phang, Sunshine Empire‘s international president, had told The Straits Times in an interview earlier this week that he was a ‘legend’.

‘I’m very good – better than Warren Buffett,’ he declared.

And the company’s promises are indeed sweet. It told people at its talk this week that they would get back their $12,000 investment in a year, plus $1,000 every month for the next seven years.

That roughly translates into a 700per cent profit within eight years – compared to Buffet’s 21 per cent a year.

That’s not all. Each investor would also get $21,000 worth of mobile talktime with Emcall, a local company with links to Sunshine Empire.

The claimed returns are mind-boggling and 20,000 people have signed up here since it was set up last July.

Responding to The New Paper on Sunday’s queries, the Monetary Authority of Singapore (MAS) advised investors not to deal with Sunshine Empire.

Noting that the company was put on the Investor Alert List last month, a MAS spokesman said ‘entities on this list are not authorised by MAS to conduct regulated activities’.

‘In making financial investments, we urge all investors to deal only with persons regulated by MAS,’ the spokesman said.

‘If investors choose to deal with persons not regulated by MAS, they forgo the protection afforded under laws administered by MAS.’

The concern seems to be that Sunshine Empire, unlike other multi-level marketing firms, allows its members to notch up what seem like profits without buying or selling products. This makes its business model look like a pure financial investment scheme.

MrPhang had said that Sunshine Empire is not an ‘investment firm’.

If so, then how does it give such super returns to its investors?

A LawNet check showed that MrPhang – described as ‘international president’ on the company’s website – is not listed as a director or shareholder of Sunshine Empire.

It also showed that Sunshine Empire, which changed its name from Niutrend International in January, is a company ‘providing entrepreneur and self-improvement courses’.

It has a paid-up capital of $150,000.

On its website, it said it is involved in ‘network marketing‘ and is interested in ‘wealth redistribution‘.

It also listed offices in Malaysia, Thailand, Korea, Indonesia, Taiwan and Hong Kong.

There are reasons that MAS raises caution to those who guarantee high returns in a short time. In the US, for instance, some get-rich-quick schemes are known as ‘Ponzi‘ schemes, named after convicted conman Charles Ponzi.

He took US$10million ($14.6m) from 10,000 people in Boston in the early 1920s by guaranteeing investors 50 per cent returns on investments in postal coupons after 45 days.

The website of the US Federal Bureau of Investigation (FBI) noted: ‘A Ponzi scheme is essentially an investment fraud… Instead of investing victims’ funds, the operator pays ‘dividends’ to initial investors using the principle amounts ‘invested’ by subsequent investors.

‘The scheme falls apart when the operator flees with all the proceeds, or when a sufficient number of new investors can’t be found to allow the continued payment of ‘dividends’.’

In other words, money is taken from Ah Kow to pay initial investor Ah Seng. No goods are bought and sold. Neither is the money collected invested in anything.

Ah Kow’s position is riskier than AhSeng’s as Ah Kow joined the scheme after Ah Seng. This is because the purpose of recruiting AhKow is to pay Ah Seng, but there is no guarantee someone else can be recruited to pay Ah Kow.

But if everything goes smoothly, no one will complain so long as they are paid on time.

Mr Leong Sze Hian, president of the Society of Financial Service Professionals, thinks that such schemes are normally too good to be true.

He said: ‘It’s very rewarding and lucrative to those who join at the start. But the funds will dry up eventually and the company will close and set up shop elsewhere, or in another country.’

- Almost got me there….in that MLM Scam…haha Lucky I did not buy the “investment” Ideas by that young energetic guy that shows me the returns “photocopy” and keep on boosting good benefits.

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