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By Khushwant Singh
EACH customer of multi-level marketing firm Sunshine Empire who bought a $12,000 product stood to receive $19,200 in rebates.
'Not only did Sunshine pay rebates at an unsustainable level, it continued to bait, attract and accept new participants,' international forensic accountant Luke Steadman said in court yesterday.
To afford such a scheme, Sunshine Empire would have had to generate returns of 349 per cent a year, and it had no way of doing this except for the sale of more lifestyle packages, Mr Steadman pointed out in a report.
The expert was engaged by the Commercial Affairs Department (CAD) to see if Sunshine's business model was sustainable.
On trial are Sunshine founder James Phang Wah, 49, and former director Jackie Hoo Choon Cheat, 29, who have been charged with operating Singapore's biggest Ponzi scheme.
The prosecution's case in the trial is that their firm had no real business plan.
Both men allegedly knew this, but went ahead and collected $180 million from customers in order to make a quick buck.
The pair also face charges of criminal breach of trust and failing to keep proper accounts.
In addition, Phang's wife, Neo Kuon Huay, 46, has been accused of falsifying accounts in order to pocket nearly $950,000 as commission from Sunshine's sales revenue.
Phang, Hoo and Neo have denied the charges and have maintained that their business was a viable one.
Yesterday, housewife Wen Liang Ying, an investor in Sunshine, was among those who took the stand.
The 38-year-old told the court that she paid $25,240 to participate in Sunshine's trading scheme in October 2007.
She said she managed to collect only $4,000 in rebates before Sunshine closed down a month later.
Madam Wen is among 14 people who will testify that they had been duped into investing in Sunshine's scheme because the company had made exaggerated claims about the success of its foreign ventures.
The trial continues.
This article was first published in The Straits Times.
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