Article by William Cate
The Asian Trust SwindleByWilliam Cate
Almost all swindles are based upon a dozen or so basic gaffs that were developed in places like the Middle East, Renaissance England, The Silk Road, Victorian Europe and 19th Century America. Successful basic cons differ only in their presentation, their players and in their use of new twists. The Asian Trust Swindle is the modern version of a tale that may date back fifteen hundred years. The last American heyday for this sting was the 1950s. In the past five years, the Asian Trust has becomes a major league swindle that has fleeced businesses and investors out of hundreds of millions of dollars. As with most swindles, governments will do nothing to protect the victims or prosecute the criminals.
The Story Told to the Pigeons
The Family Trust’s founder was a general in the Nationalist Army. Fleeing to Taiwan with the remnants of Chiang Kai-shek’s Army in 1949, he stole millions of dollars. The family secretly invested their stolen money and avoided paying taxes on the profits in Taiwan. Over the years, their wealth grew to billions of dollars. They continue the investment work of their founder by investing in startup and early stage companies in ways that avoid Taiwan taxes. They make money on every investment and with their help, you will make a fortune using their money.
For those who follow the history of flimflam, this story is essentially the same as the Nazi front fee swindle of the 1950s. The source of the investment money for the Nazi’s was pillaging Europe rather than Asia. But, the rest of the tale is basically the same.
The Ropers
Someone must bring the pigeons in for a fleecing. The Internet gave the swindlers access to tens of thousands of ropers. They were the small business consultants all of whom have websites and have clients in need of investment capital. The ropers were assured of 10% of the money invested in their approved clients’ projects. The Trust would pay the money on top of making the investment in their clients’ company. The business consultant could charge their client for the hours they helped the client secure the Trust’s money. The ropers were given the opportunity to make money from both ends of the deal. Assuming the Trust was real, this was an offer nobody in business would reject.
The Shills
The Trust used a few shills to convince the ropers that they were in a real deal. For instance, a roper would arrive at an airport for their clients’ meetings with the Trust team and “accidentally” meet someone who would tell them how they were funded a year or two earlier by the Trust.
The Trust Players
The Trust’s found was dead. His elderly son runs the Trust with the help of a reliable Western Advisor (who I believe played the role of the founder’s son via email). The son runs the Trust through a chief of staff and an office manager. The office manager’s job was to keep dangling the carrot of funding in front of the eyes of the increasingly wary pigeons. The Chief of Staff made the Trust appear to be Chinese.
The Structure of the Deal
The ropers found the pigeons and helped them to qualify to meet with the Trust’s Chief of Staff and Western Advisor in cities like Bangkok, London, Vancouver, Cape Town, etc. The Trust didn’t charge to meet with the pigeons or to actually help them improve their business plans. At the end of the meeting the pigeon was given a Letter of Commitment to sign. Once signed, the pigeon was expected to pay a series of costs from a Due Diligence evaluation to forming a tax haven IBC. Total costs ranged between about US,000 and US5,000. The requested money was flexible, since taking someone for something was better than not getting all you expected from each pigeon. The payments were made to associates of the Trust and the proceeds shared with the Trust swindlers. If this were the end of the tale, it would be just another front fee scam.
The Twists of the Trust
The Trust used the business plans that they helped write to raise money from investors around the world. The business company clients never saw a dime from this fund raising effort. The result was a multiple of the income you can create from a simple front fee scam. It makes Asian Trusts a major league swindle.
After years of successfully fleecing both investors and the business community at least one of these Asian Trust Swindle groups has hit the mother lode of pigeon money. Their big score is a public company with more money than good sense. This public company is supplying the money to allow the Trust swindlers to “buy” businesses in the People’s Republic of China. You can easily guess the outcome of this business effort.
No Legal Resource
Fraud is a growth business because governments are ineffective in prosecuting criminals. In the case of a swindle that involves multiple countries, there is almost no possibility that any government will take legal action to stop the fraud. A few hundred million more dollars lost and this swindle will run its course and fall below the radar for a few decades. Meanwhile, the victims only recourse is outlined in my “Fleeced” article at GoArticles.com
About the Author
William Cate is an Equity Finance Consultant [http://home.earthlink.net/~beowulfinvestments/williamcateventurecapitalampequityfinanceconsultant/] who is the Managing Director of Beowulf Investments and the Executive Director of the Global Village Investment Club.
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