Former financial adviser cheated victims of nearly S$8.7 million after investment scheme promising 40% returns collapsed

In 2020, a young former Great Eastern financial adviser marketed an investment scheme in 2020 promising returns of more than 40% from US stocks, options trading, artificial intelligence (AI) forex trading bots and cryptocurrencies. He proceeded to cheat victims of nearly S$8.7 million within a year after the scheme collapsed.

His victims included his own relatives and friends, as well as those of his clients. He used the money to compensate clients for their losses and to gamble in an attempt to recoup his losses.

Tan Kai Min, 26, pleaded guilty on Tuesday (27 October) to 22 charges, including individual and amalgamated cheating charges, forgery, transferring criminal proceeds and giving false information to a public servant. Another 68 charges will be taken into consideration during sentencing.

According to the statement of facts, Chen was a financial adviser with Great Eastern Financial Advisers at the time of the offences. In 2020, when he was just 20, he devised a scheme to attract investors so he could earn more commission.

He claimed he could generate returns of more than 40% through investments in US stocks, options trading, artificial intelligence (AI) forex trading bots and cryptocurrencies.

Initially, Chen invested all the money he received in the scheme. In early 2023, however, he realised it had failed and he could no longer deliver the returns promised to investors.

To make up for their losses, Chen decided to devise more attractive investment schemes to cheat others of their money and cover the shortfall.

He targeted friends and relatives, including secondary school classmates and friends he had met during National Service, as well as the parents and romantic partners of his friends and clients.

To attract victims, Chen offered high returns and complex investment schemes that appeared profitable. He also maintained an image of wealth, wearing designer brands and driving luxury cars. He recruited others to bring in more victims.

Within just a year, he cheated 82 people of S$8,694,169, causing actual losses of S$5,234,294. He did not invest any of the money. Instead, he used it to pay returns promised to investors when his earlier scheme collapsed, as well as to cover personal expenses.

He used the remaining funds to place bets with Singapore Pools and gamble at Resorts World Sentosa on more than 170 occasions in an attempt to recoup his losses, but lost almost all of it.

By the end of 2023, a growing number of victims were demanding their money back. To fend them off, Chen made various excuses, falsely claiming that he was under investigation by the Commercial Affairs Department, that the authorities had frozen his bank accounts, that his assistant had absconded with the money and that he, too, was a scam victim.

To make his claims credible, he lodged a false police report claiming his bank accounts had been frozen, and forged police letters and documents.

Several victims eventually reported him to the police. After the police asked him to attend an interview at a police station, he turned himself in with records showing the movement of the funds.

The prosecutor sought a jail term of 136 months, or 11 years and four months, while the defence lawyer asked for 114 months, or nine and a half years.

The main point of contention was whether Chen’s relative youth warranted a lighter sentence.

In mitigation, his lawyer said Chen was only 22 or 23 when he committed the offences. Young and misguided, he did not know how to deal properly with the scheme’s collapse or seek help, leading him to make one mistake after another and mistakenly believe that gambling could solve his problems.

The lawyer argued that Chen was still young and the court should give him a fair chance to turn his life around. He was actively reflecting on his wrongdoing and, with support from his family and church, had moved away from his former belief that money mattered above all else.

The prosecutor countered that Chen was not a “misguided” young man but had consistently acted rationally and planned meticulously. He had not only sustained a long-running scam but also manipulated others into cheating on his behalf.

The prosecutor said Chen’s subsequent plans to cover the shortfall and his gambling were aimed at protecting his reputation. These were choices he made after weighing the pros and cons, fully aware that everything he was doing was built on fraud.

The prosecutor noted that the sentence sought had already taken Chen’s early guilty plea into account. He would also only be in his 30s upon release, still in his prime working years.

The judge adjourned the case to 13 November for sentencing.