Company director of troubled firm with Singapore links arrested with US$46,150 and loaded gun
US company with S'pore links raided by FBI
An investment company - USFIA Singapore - was placed on the Monetary Authority of Singapore's (MAS) Investor Alert List on Dec 15.
USFIA Singapore, which sells amber products, was in the news early last month when The New Paper reported that one of its directors, Mr Steve Chen, a US citizen, had been taken to court in the US by the country's Securities and Exchange Commission.
The MAS had previously told TNP that "USFIA is neither licensed nor regulated by MAS".
In September, Los Angeles-based USFIA Inc was raided by the Federal Bureau of Investigation in a pyramid scheme probe.
Interestingly, the report said that when the raid was conducted at the USFIA company offices, Mr Chen, who had arrived later, "was wearing a security guard uniform and carried a loaded gun, which was not concealed".
US Marshals seized the weapon and found US$46,150 in cash in Mr Chen's car.
A US court then froze US$32 million (S$44.9 million) of Mr Chen's assets and bank accounts, placing them under receivership.
Last month, the appointed receiver, Mr Thomas A. Seaman, an independent entity tasked to look into Mr Chen's assets and business dealings, filed its First Report.
It uncovered a few key findings in the 36-page report, including the recovery of more than US$20 million.
The report stated: "At this point there is no indication of any legitimate Gemcoin or other viable business. There is also no indication the Receivership Entities had any significant sources of income other than monies raised from investors."
The findings were based on reviewing business records, interviews with employees and digital data extracted from 240 seized computer devices.
At least 28 business entities in the US and overseas were identified to be linked to Mr Chen, a shareholder of USFIA Singapore, which was registered here in April last year.
Mr Chen has also been named in a US$100 million class action lawsuit filed by LA-based lawyer Long Liu, who accuses Mr Chen of "fraud, breach of contract and negligent representation".
Mr Long told TNP he is in touch with "a few hundred claimants" through e-mails from countries such as Singapore, Thailand, Malaysia, France and China.
Mr Long said in a telephone interview: "The issuance of the First Report as a factual matter will help in my class action suit (against Mr Chen and his associates). I don't have to wait for another report to proceed."
Before the probe in the US, USFIA sought investments in amber mines and Gemcoin, a virtual currency.
Court documents previously filed by the SEC alleged that some of the "false and misleading representations" Mr Chen has made were claims that USFIA owns several large amber mines in the Dominican Republic and Argentina.
The receiver was unable to substantiate his claims.
The First Report stated: "Instead of mines located around the world, millions of dollars in precious gems, and houses and cars available to investors, the Receiver has found only costume jewellery and bins filled with rings of nominal value."
The receiver has seized properties like the USFIA building in LA, a hotel, an apartment building, a warehouse, several single family homes and parcels of undeveloped land, including a proposed golf course.
The receiver said it would continue in its probe. Investors who want to file complaints can do so at www.usfiareceiver.com.
Last Wednesday, two Singaporeans with business interests in USFIA Singapore said they were anxiously monitoring developments in the US court.
TNP tried to speak with representatives of USFIA Singapore last week, but none was available for comment.
Instead of mines located around the world, millions of dollars in precious gems, and houses and cars available to investors, the Receiver has found only costume jewellery and bins filled with rings of nominal value.
- First Report filed by the appointed receiver on USFIA