Faith Ong, Author at Goody Feed

So imagine we all have a decent amount of savings but it is not enough to buy a house entirely. If we were to pool our money together, we could probably purchase a fancy condo and sell it again to make a profit. Even better, we find houses where the owners are in deep financial debt and need cash ASAP. So we capitalise on their desperation and bargain for the lowest price that they will go. From there, we can sell the property and earn from the difference. Sounds legit? Well, yes. I suppose purchasing 'distressed properties' could be a successful operation if everyone in it is cooperative and honest. But If Someone Isn't? Housewife Leong Lai Yee carried out a large scale Ponzi Scheme worth a whopping $35 million with a plot that deserves a Netflix documentary (#FyreFestival) but also landed her 14 years of incarceration. Source: Giphy.com What is a Ponzi Scheme? A Ponzi Scheme is an investment scheme that is set out to cheat people of their money. It first promotes itself to give a high rate of return and assures the investor of low risks. At the start, the Ponzi scheme gives old investors 'returns' by taking the money from the new investors to pay them. The scheme will fall apart when there are no more new investors and the money runs out. Basically, if something sounds too good to be true, it probably is. The plot Source: Giphy.com So what Mdm Leong did was that she used the trust that her friends had for her to pool the funds together to purchase distressed properties. She promised high returns with low risks, which we all know doesn't exist. With her past experience as a property agent, she was supposed to know a lot more about the property market. Mdm Leong told investors that she had a banker who was helping her to manage the whole 'investment' scheme. When the investors requested to see the relevant documents, she would tell them that it was 'confidential'. Mdm Leong was able to keep up the act for five years. Image: oh-my-god.co Mdm Leong guaranteed that each person would make a 10%-30% profit on the amount that they put in. Seduced by the chance to earn more money, various individuals poured in hundreds of thousands and even took out the money from their CPF to invest. One of her investors, Ng Lay Chin gave her a total of $1.697 million to grow. A parallel Ponzi scheme Emboldened by the success of her distressed properties scheme, Mdm Leong cooked up another plot to grant funding to startups or provide short-term financing to businesses. She promised a 7-9% return monthly. When it fell apart In 2014, Mdm Leong's grand plans began to show signs of falling apart as she was not able to pay investors in time. She gave her word that she would pay them back by 2015 but her scheme could not stand for much longer. Sensing the demise of her scheme, Mdm Leong and family escaped Singapore. Her investors then reported her to the police. What She Actually Spent The Money On Mdm Leong used the money from the Ponzi scheme to fund her lifestyle, as she needed to repay the loans for her landed property, her car and family expenditures. She has pleaded for leniency for her 14 years' jail term stating that she is remorseful. However, the judge has concluded that the scale of her operation has simply been too astounding and 'shocks the conscience of the man on the street'. Spending within your means Source: Giphy.com In a prosperous country like Singapore, it is common to find people who covet and aspire to own big-ticket items. However, not everyone is able to fund such a lifestyle. Money is not easy to earn. Illegal quick money is never the solution as they will reach a point where they go bust. It is better to live within your means and only purchase what you can afford.

Faith Ong

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