American extradited to S’pore admits running $18m fraudulent trading scheme

An American man was a director at Singapore-based firm Aureus Capital when he became the main person running a fraudulent forex trading scheme linked to it.

The scheme involved more than $18 million from over 1,300 clients.

On April 15, Michael Philip Atkins, 51, pleaded guilty in a Singapore district court to carrying on a business for a fraudulent purpose. This came 10 years after he was first arrested here in 2014. He jumped bail subsequently. In March 2023, he was extradited from the US to Singapore.

Deputy Public Prosecutor Hon Yi told the court that Atkins, who was a majority shareholder of the firm, had full control of the scheme which used only a fraction of the clients’ monies for forex trading.

The prosecutor added: “The scheme was run in the style of a classic ‘Ponzi’, where the purported returns to clients were paid using the funds from other clients... Such a business model was clearly unsustainable and... the company finally imploded.”

In the end, the clients received around $12.7 million in total from Aureus Capital and they suffered nearly $6 million in losses.

DPP Hon urged the court to sentence Atkins to up to three years and eight months’ jail, adding: “In effect, the scheme was his and all losses caused to the clients of Aureus must be directly attributable to him only.”

Between April 2013 and July 2014, Aureus Capital offered leveraged foreign exchange trading services and schemes.

Clients entered into agreements allowing Aureus Capital to engage in forex trading on their behalf.

Under these agreements, the company would be entitled to 40 to 50 per cent of the profits generated from the trading, while the losses from trading would be fully borne by the clients.

At the time of the offence, Aureus Capital maintained two trading accounts with Oanda Asia Pacific, a separate company which offers foreign exchange trading.

Clients were told that Auereus Capital would manage their funds by trading forex on Oanda, said DPP Hon. They were instructed to transfer cash into a bank account. 

The bank account received more than $18 million in total from clients between April 2, 2013, and July 15, 2014.

Instead of using the amount for forex trading, more than $14.7 million was used for other purposes, such as paying Aureus Capital’s directors, including Atkins.

Only around $1.7 million of the more than $18 million was deposited into Oanda, the court heard.

Weekly statements sent to clients concealed the fact that only a small portion of clients’ funds was used for forex trading.

The weekly statements also reported profits which were not reflective of actual trading results. In fact, Aureus Capital was making losses on its Oanda trading accounts.

According to the clients, they were told on June 13, 2014, that Aureus Capital needed to cease trading as it was acquiring a banking licence.

The clients did not receive any money when they asked for their investments to be withdrawn.

Subsequent e-mails from the company claimed that it was being rebranded, and that all clients’ monies would be refunded by July 28, 2014.

Clients alerted the police when the company and its directors became uncontactable soon after. Atkins was arrested.

An Interpol red notice was issued against him after he jumped bail. Such a notice requests law enforcement units worldwide to locate and provisionally arrest a person pending extradition, surrender or other legal actions.

He was traced in the US in 2017 and an extradition request was sent to the authorities there three years later.

He was successfully extradited to Singapore and re-arrested here on March 18, 2023.

Atkins will be sentenced on April 25.