SINGAPORE – When gold trading company Genneva ran into difficulties over promises made to customers in a buyback scheme, it asked them to send back the gold bars, saying it was just for authentication.
But instead of returning them later, some of the bars were pawned for loans.
Genneva sales agent Chen Qiaoling falsely stated that she was the pawner on three pawn tickets in August 2012.
The Chinese national later falsely declared the loss of the tickets and dishonestly redeemed 3kg of the precious metal worth more than $200,000 from a local pawnshop.
Chen, now 38, sold the gold bars in October 2012 and received more than $150,000 in cash. The Singapore permanent resident later remitted more than $109,000 to a bank account in China.
She pleaded guilty earlier this week to two counts of cheating over making a false declaration to a Commissioner of Oaths and then unlawfully redeeming 3kg of gold bars.
She was sentenced on Thursday (Nov 18) to a year’s jail.
Defence lawyer Amarjit Singh Sidhu told the court that she was not the mastermind behind the scheme, adding that the proceeds had been used to compensate and refund some clients in China.
She has since made a partial restitution of more than $40,000 and The Straits Times understands that she is no longer working for Genneva.
The court heard that its customers bought gold bars at up to 40 per cent above the market retail price. They would then receive monthly payouts of up to 3 per cent of the purchase price.
Deputy Public Prosecutor Lee Wei Liang told the court: “At the end of the contractual period, the customers may either sell the gold back to Genneva at the purchase price, keep the gold, or renew the contract to continue receiving monthly payouts.”
On Aug 17, 2012, the company implemented a “gold inspection” scheme.
Clients who had bought gold bars had to send them back for “inspection”, failing which they would be unable to renew their contracts with the firm or collect monthly payouts.
DPP Lee said the purpose of the inspection was purportedly for Genneva to authenticate each piece of gold sold to its customers.
Between Aug 17 and Sept 30 that year, it collected around 3,500kg of gold, but only about 2,700kg were later returned.
A portion of the remaining gold was sold, pawned or used to fulfil new sales. Investigations revealed that Genneva pawned about 125kg of gold bars at various shops in Singapore.
The Commercial Affairs Department later received “a large number” of reports over issues, including failure to pay customers their promised monthly payouts.
The court heard that a purchasing head of Genneva had been tasked to pawn gold bars collected from customers.
On Aug 23, 2012, Chen accompanied him to a pawnshop where he handed over three gold bars weighing more than 3kg.
Chen falsely put her name on the pawn tickets as the pawner and received a loan of more than $166,000.
The pawn tickets and monies were then handed to the purchasing head.
Chen and other sales agents later found out that some unknown individuals had tried to redeem the gold bars which they had helped to pledge for money.
She decided to get back the valuables pledged under her name before these unknown individuals redeemed them.
On Sept 29, 2012, she falsely reported to the pawnshop that the pawn tickets were lost, despite knowing that they were, in fact, with the purchasing head.
Later that day, she falsely declared the loss before a Commissioner of Oaths and submitted the affirmed declaration form to an employee of the pawnshop.
As Chen did not have enough cash on her, she redeemed two of the three gold bars before selling them to a bank for around $140,000 on Oct 1, 2012.
She used part of the money to redeem the third bar, which she later sold to the bank for about $70,000.
The court heard that she received total net sale proceeds of more than $150,000.
On Oct 17 that year, she remitted part of her ill-gotten gains to a bank account in China.
Chen’s bail was set at $30,000 on Thursday and she will have to surrender at the State Courts on Nov 25 to begin serving her sentence.
For each count of cheating, an offender can be jailed up to three years and fined.
In July last year, Genneva’s former general manager, Malaysian Kwok Fong Loong, then 65, was sentenced to 56 months’ jail after admitting to one count of fraudulent trading.
The cases involving two of its former directors – Singaporean Iseli Rudolf James Maitland, 62, and Malaysian How Soo Feng, 47 – are still pending.
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