Talks aimed at quashing Ponzi fraud

Police chatting with Finance Ministry

New forms of Ponzi schemes have developed as fraudsters attempt to avoid criminal charges. PORNCHAI THIRAVEJA Director-general, Fiscal Policy Office

The Department of Special Investigation (DSI) and the Finance Ministry have discussed methods to strengthen their efforts to prevent Ponzi schemes, says Fiscal Policy Office director-general Pornchai Thiraveja.

Mr Pornchai said new forms of Ponzi schemes have developed as fraudsters attempt to avoid criminal charges.

He said the DSI held consultations with the ministry on the law. Law enforcement authorities want to ensure regulations cover all types of activities deemed to be Ponzi schemes.

The discussion is meant to expand the scope of the law to protect people from investment scams, said Mr Pornchai.

Both the Finance Ministry and Interior Ministry are in charge of enforcing the law pertaining to Ponzi schemes.

Activities deemed to be a Ponzi scheme under the law include the operator of a scheme soliciting up to 10 or more individuals to jointly make an investment, when in fact there is no investment good or service in existence.

This form of investment fraud offers a higher rate of return than bank deposit accounts, until the scheme collapses.

There is no actual business and existing investors are paid with funds collected from new investors.

Penalties for this type of fraud include imprisonment, ranging from 5-10 years, and a fine of between 50,000 and 1 million baht.

The latest investment scam to make the headlines involved the Forex-3D foreign exchange group, which allegedly cheated thousands of victims out of 2 billion baht in total.

Finance Minister Arkhom Termpittayapaisith previously asked regulators under the ministry’s umbrella to examine any legal loopholes to prevent such a case from happening again.

The Forex-3D group claimed it would invest the funds it raised from investors in foreign exchange.

The DSI has already taken legal action against a number of suspects and continues to investigate the case.