Jail for man who siphoned more than S$12.5 million of investor funds through fake wine investment scheme
Eldric Ko, 51, was the CEO of Premium Liquid Assets (PLA), which he incorporated in October 2005 to distribute, sell and broker sales of fine wines.
However, when it became clear that the business was not sustainable, Ko, a Singaporean, decided to cheat investors out of their money and postpone PLA's liabilities.
From 2008 to 2011, the accused and a co-conspirator, Koo Han Jet, devised and carried out the scheme, which involved the use of what the prosecution called a "carefully constructed network of shell entities and overseas accounts" and legal documentation to "create a veneer of legitimacy to the company's operations".
Ko misappropriated S$12.67 million of investors' funds, and squirrelled away S$8 million for his and Koo's personal benefit, Deputy Public Prosecutor Michelle Tay said.
"No restitution was made, and the hundreds of investors remain saddled with their losses to date," she told the court.
Based on investigations, more than S$14 million was paid by victims of PLA's scheme, with more than 200 people affected.
Ko pleaded guilty to one count of criminal breach of trust and two counts of acquiring property representing benefits from his criminal conduct.
Another 12 charges of a similar nature, including cheating, were taken into consideration for his sentencing.
THE SCHEME
PLA offered a wine investment scheme which purported to source wine from suppliers in France and sell the wine to investors.
The company hired sales agents to solicit investors to purchase wine from PLA in exchange for commissions.
The company also gave investors access to view their portfolio of wines online and offered them the service of storing wines at a warehouse. It also offered to help them sell wines in exchange for a 5 per cent brokerage fee.
After operating the business for a few years, Ko realised that the company was selling more than what it could purchase, in part because it was not making enough profits to cover its costs.
"The accused knew that with the way that he and Koo were running (PLA's) business, (PLA) had growing liabilities to its investors, which were more than (its) assets, and which (PLA) could not fulfil. In the accused's words, there was a 'hole' that kept getting bigger," said Ms Tay.
As a response to this, Ko and Koo decided to cheat investors under a specific scheme known as "en primeur", which involves buying wine futures.
Investors were told they could buy wines which would only be bottled in around two years' time. After the wines were bottled, investors could receive three years of free storage in a warehouse in France, and the wines would be fully insured.
Investors could only sell their wines after they were bottled.
These investors were given an invoice stating their ownership, with an expected delivery date for their wines.
Instead of being a genuine investment scheme, the pair only meant to buy time to put off PLA's liabilities to investors. In fact, they never even sourced the purported wines.
The duo agreed to split the proceeds equally.
SHELL ENTITIES CREATED
On Aug 7, 2008, Ko incorporated a shell entity, Grand Millesimes Limited, in the British Virgin Islands to act as a fictitious supplier of wines. Koo then forged invoices from the company to PLA, purportedly for the sales of wines.
In turn, Ko used these forged invoices to justify his transfers of investors' money from PLA's bank account to Grand Millesimes Limited's bank account in Switzerland.
From there, Ko would disperse the money to different accounts he had access to, deliberately choosing accounts that he thought the Singapore police would not be able to obtain information about.
He shared Koo's portion of the fraudulent gains through illegal remittance businesses and in cash.
Ko later acquired his own illegal proceeds through fund transfers into the account of another shell company he created in July 2008.
This company was called Premium Assets Management. It was meant to be a holding company and investment manager of a wine fund, but the fund never materialised.
The company was also not licensed by the Monetary Authority of Singapore to carry out business in fund management.
More than 240 police reports have been lodged against PLA in relation to the fraud since May 2011.
CAUSED "SEVERE HARM"
Ko left Singapore on May 28, 2011, before police investigations commenced to avoid being caught. He was contacted by police via email requesting his return, but he did not respond to them.
Ko only returned to Singapore on May 25, 2024, and was arrested. He has been in remand since and was produced in court via video link.
Court documents did not specify the reason for his return.
Meanwhile, Koo left Singapore on May 3, 2011 and has not returned.
Seeking between seven years and seven years and seven months' jail for Ko, Ms Tay listed multiple aggravating factors, which she said far outweighed mitigating factors.
She said Ko was dishonest from the outset and made sophisticated use of legal documentation to perpetrate the fraud.
As the mastermind, Ko has the highest culpability, and he caused "severe harm" to hundreds of victims, said Ms Tan.
Ko also remained at large for 13 years, she said.
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