Business
Illegal gold traders arrested
  • By Khanh Linh | dtinews.vn | January 14, 2015 01:11 PM

Police have arrested owners of a Hanoi company operating a VND300bn (USD14.3m) underground gold trading floor after it failed to pay promised returns to investors.

 

 HGI operators arrested, police seize documents

Hanoi Police Department's hi-tech crimes division, working with the Public Security Ministry's Hi-tech Criminal Prevention Department, raided Hanoi Golden Investment JSC (HGI) on January 13. It had taken investments of some VND300bn.

Unlicensed gold trading has been banned for several years, but underground floors continue to operate, particularly on the Internet, as more and more companies find ways to enter the activity.

Police arrested HGI general director Phung Quoc Huy and several share holders and accomplices, and searched the offices on Ngoc Khanh Street for evidence.

Police say HGI was established in 2009. It launched a website -- hgi.com.vn -- to provide a virtual trading floor for gold and currency trades, attracting 3,037 traders, who use virtual points paid for with real money.

From 2012, HGI offered investment trust contracts, promising investors a monthly interest rate of 1.5 percent for three-month contracts and 2.0 percent a month for one-year contracts.

HGI employees could earn 0.3 percent commission on investments, and accountants were able earn a commission of 2.5 percent. Many HGI employees were also investors, and were encouraged to persuade relatives to participate.

HGI gathered a total of VND270bn. The money was used to buy 5ha of land in Phu Quoc Island and build a ceramic factory. HGI's Danang City office used USD15m to invest in a US-based company.

Eventually, HGI was unable to meet payments to its investors.

The police investigation is continuing as investigators expand their probe into other activities of the company.

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