14 years’ jail for housewife who masterminded S$35m Ponzi scams

SINGAPORE — For about five years, a housewife ran two massive Ponzi schemes, one of which involved “risk-free investments” that she falsely claimed to be making in distressed properties in Singapore’s prime districts.

Leong Lai Yee ultimately tricked 53 victims — many of them her close friends — into parting with S$35.4 million in total.

None of the money was used to buy properties, but some was paid as “returns” to her unwitting victims as a way to keep the Ponzi scheme going.

When several “investors” lodged police reports against her in May 2015, she fled the country before the Commercial Affairs Department (CAD) began investigations. She surrendered herself to the Singapore embassy in Bangkok, Thailand on Nov 2, 2017, and was arrested upon her return two days later.

For cooking up and operating the scheme, Leong, 55, was sentenced to 14 years behind bars on Friday (May 17).

She had pleaded guilty to 51 counts of cheating and using the benefits of her criminal conduct, with another 806 similar charges taken into consideration for sentencing.

In sentencing Leong, District Judge Hamidah Ibrahim noted that the amount involved and the number of charges was “just staggering”.

DISTRESSED PROPERTY SCHEME

The court heard that Leong deceived 13 victims with her distressed property scheme from January 2010 to May 2015.

One of them, Ng Lay Chin, paid her S$800,000 in one instance on Nov 20, 2013. Ng ended up parting with another S$897,000 over a year.

Leong told her victims that she was buying the properties in prime districts here, from sellers on the brink of bankruptcy, and was reselling them at a profit to foreign buyers who were keen to invest in Singapore property.

She invited her victims to invest money with her so she could buy and resell the properties, in return for guaranteed returns and profits of up to 10 to 30 per cent within six to eight months.

Leong said their investments with her would be risk-free, as she would collect a 40 per cent deposit upfront from interested buyers. The deposit would allegedly be forfeited if the buyer backed out, and she would be able to re-market the properties to other buyers.

She also told her victims that she worked with a banker, who was allegedly privy to such properties, as well as a lawyer who could purportedly help her complete the property transactions. This meant that she had “insider knowledge”, she said, adding that she had been dealing with such investments for many years.

Because the “sellers” were supposedly about to be made bankrupt, Leong said she was able to negotiate with them to buy their properties at a competitive price, in exchange for urgently-needed cash.

Leong did not show her victims any documents or details of the properties, telling them that these were confidential. Their investments with her were carried out on a personal level and based on trust, she said.

“Drawn to the accused’s supposedly risk-free investment model, high returns and her allegedly vast experience in the property market, the victims were deceived into participating in her distressed property scheme,” Deputy Public Prosecutor (DPP) Kenneth Chin told the court.

BUSINESS FUNDING SCHEME

Leong ran another Ponzi scam involving business funding from 2012 to 2015.

She told her victims that she was providing business financing in order to fund start-ups or provide businesses with short-term financing. She invited them to invest money with her in exchange for monthly returns of 7 to 9 per cent.

She encouraged them to increase their investments over time, and refer other individuals to her two Ponzi schemes.

She also convinced some of them to pawn their gold items or withdraw their Central Provident Fund savings to invest with her.

She told them to transfer their investments either directly to the UOB bank account she shared with her husband, or to other bank accounts belonging to other investors — creating the impression that her schemes were genuine and had lucrative returns.

Leong channelled the bulk of the funds among her victims, as well as to finance her personal expenses such as mortgage loan repayments, car loan repayments and family expenditures.

She had bought a landed property in Tanah Merah in 2006, which has since been sold, and taken out a S$864,000 mortgage loan to pay for it. She then used S$8,000 of one of her victims’ “investment” to finance the loan repayment.

By late 2014, Leong started delaying payments, promising the victims that she would refund all outstanding payments by May 18, 2015. But when her scheme began to unravel, she decided to leave Singapore.

She has not made any restitution.

‘SHOCKS THE CONSCIENCE OF THE MAN OF THE STREET’

DPP Chin sought 14 to 15 years’ jail, pointing to the “enormous” scale of Leong’s schemes and the amounts and number of victims involved.

He noted the sustained period over which the offences were committed, as well as the level of premeditation and persistence Leong had exhibited.

“This is a case of unusual proportions; a case of staggering numbers. Numbers like these cause public disquiet. It shocks the conscience of the man on the street of how a scheme of such scale can be perpetuated by a single individual,” he said.

Leong’s lawyer, Mr Tito Isaac, asked for eight to nine years’ jail instead. He said that Leong was deeply remorseful, pleaded guilty at the earliest opportunity, and had apologised unreservedly to her victims.

As a former real estate agent, she had “served notable companies and families”. “She is capable of honest and hard work, and she is capable of reform,” Mr Isaac added.