Ponzi scheme in Singapore, Singapore's own Madoff?

The recent case of Public Prosecutor v Stefanovic Nenad shows the results of a local Ponzi scheme. As most people know, a Ponzi scheme relies on using new investors's money to pay off previous investors, thus giving the previous investors the ILLUSION that the business is doing well.

Nenad, a Singapore resident Yugoslav, tooks monies from various persons in Singapore, telling them that he could obtain 30% returns from them using a trading account he had with a company called FIMAT Singapore Pte Ltd. The amounts of money involved were over $800,000. In some of the cases, he used new investors' monies to pay off previous investors who were persuaded to invest the money with him. In other cases, he took money from investors, telling them that he was going to use his FIMAT trading account even after this account was closed.

He was charged with 11 charges, out of which the prosecution proceeded with only 4 charges. He pleaded guilty and was sentenced to 64 months' imprisonment. The judge took into consideration the fact that a large sum of money was involved, the public interest in stopping financial fraud and the fact that he had used his illegal methods over a period of time (over a period of 2 years).

The charges against him included cheating, forgery and criminal breach of trust.

Those who wish to read the full judgment of the court may wish to refer to the Subordinate Courts website - www.subcourts.gov.sg.The case is found (for the time being at least) at http://lwb.lawnet.com.sg/legal/lgl/rss/subcourts/60844.html.