Investors targeted by fraudsters

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ASIC has obtained interim court orders to stop a British Virgin Islands company and its director from selling shares and providing financial services in Australia.

China Environment Group (CEG) allegedly entered into an agreement with Lucky Pearl Investments Ltd, for the sale of 100 million CEG shares. The shares were personal shares of CEG director John William Ullmann, allegedly acquired for one US cent each and then sold for US$1.00 each.

The shares were marketed by Anova Corporate Services Ltd and Great Wall Capital Ltd. (GWC), and supposedly “presented in a manner so as to deceive investors into believing that their money would be directed to CEG to enable it to develop clean air technologies in China”, according to ASIC.

Instead, ASIC alleges that 80% of the money was paid as commission to Lucky Pearl and the balance paid to Ullmann and another company believed to be associated with Lucky Pearl. Many of the investors who purchased the shares had previously acquired shares marketed by Anova and GWC in other companies including Hydro Solutions Asia and Delmedica Investments Limited, said ASIC.

Significant features of this type of scam that your clients should be wary of are:

  • they are regularly supported by sophisticated internet technology including a website which purports to provide investors with real-time information in relation to their trading
  • victims are often initially contacted by a person surveying their interest in investing generally
  • victims are lured with promises of high returns and then subjected to pressure in order to induce them to hand over their money, and
  • when a person falls victim a first time, they are often called back and encouraged to invest in a more sophisticated trading strategy which requires even more money.

None of CEG, Anova, Lucky Pearl, GWC, or Ullmann holds an Australian financial services licence. Until further notice, CEG and Ullmann have been banned from providing advice in relation to any financial product; dealing in, or arranging access for any person to a financial product; soliciting investment in or receiving funds related to CEG, and; altering, amending or destroying any books, records or documentation related to CEG.

The matter has been listed for a directions hearing on 28 March.

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