Too good to be true: all the hallmarks of a Ponzi scheme
- Collapse of JJPTR, the country’s biggest forex trading entity
- Alleged hacking job, investors risk losing as much as RM500 million
- Company not licensed to solicit investments from public
- JJPTR on Bank Negara’s Financial Consumer Alert list
- Founder Johnson Lee, 28, to reveal plan on May 1 on repaying investors by mid-May
- Lee said to be still in Penang, exact whereabouts unknown
- Southern University College in JB, where Lee’s father is a department head, investigating if students invested in scheme
One of the biggest money games in the country, JJ Poor to Rich (JJPTR) has collapsed.
The country’s biggest forex trading entity, JJPTR was founded by Johnson Lee, 28. It claims to be an investment company founded in March 2015.
Since Saturday, reports of JJPTR accounts being hacked – resulting in a loss of RM500 million and leaving a balance of only US$11,000 – have gone viral, creating panic among many investors.
On Feb 20, Securities and Exchange Commissions (SEC) issued an advisory on JJPTR that it is not registered with the commission as a corporation or partnership. Having no primary licence, it is not authorised to solicit investments, which require a secondary licence. In short, JJPTR has no business soliciting investments from the public.
According to SEC, unauthorised solicitation of investment from the public is illegal and those who act as salesmen, brokers or agents in selling or convincing people to invest may also be prosecuted and held criminally liable.
JJPTR offers investors a monthly 20 per cent fixed profit on their capital investment that starts from as low as US$5. The ‘lucrative investment opportunity’ was promoted through the Internet, presentations, and word of mouth. The investors are not only from Malaysia – mostly Penang where JJPTR is based – but also as far as the US, Canada and China.
Investors range from those who invested small to substantial amounts. Some have received initial returns, while some received no gains at all, and some have taken back their capital but many have lost everything they invested.
Investors usually started with small sums, increasing their investments when returns were delivered consistently. Those whose investments broke even would continue to receive the 20% monthly returns as long as they did not withdraw the money. A commission was paid for the recruitment of new investors.
Investors were told JJPTR grew the funds through forex investments, and cafe and mini-market operations.
Some investors still have faith in Lee, who said he would revive the business and help them recover their investments. He has posted a message on Facebook that he has a plan to repay investors by mid-May.
JJPTR last night posted an audio recording of Lee on its official WeChat and Facebook pages, in which he claimed that he was still in Malaysia and that the latest solution would be unveiled on May 1.
However, many investors were distraught that JJPTR locked its office doors last Saturday and Lee had not met with them. Concern also stemmed from recent dividends not having been deposited, unlike previous payments which were paid on time.
In the latest development, the JJPTR office on Jalan Perak in Penang reopened this afternoon to allow investors to settle some matters. A JJPTR agent has said the founder is in Penang although his exact location is not known.
The Sun Daily reported that JJPTR has called on its members to fill up their information and the balance of capital not yet returned to them in an online form. The offer is extended to members who did not break even in their investments. Apparently, the message was sent to a total of 41 group chats with its 31,000 members via WhatsApp on Sunday.
“We feel touched that many of our members are supporting us although we have been framed by others,” the company said in the text.
However, the text did not state clearly that the company would refund its members’ capital.
As yet, no police reports have been lodged against JJPTR.
According to The Star, Penang Commercial Crimes Investigation Department chief Assistant Commissioner Abdul Ghani Ahmad said, “It is quite normal for ‘investors’ to wait six months to a year before lodging police reports in the hope of getting back their money.”
“Penangites are always interested in taking part in such investment schemes to make fast money. There are still two or three such scams active locally,” he added.
Major Chinese newspapers reported that Lee described the hacking job “the biggest mistake of my life”. According to the Chinese press, the initials JJPTR also represents ‘Jie Jiu Pu Tong Ren’, which in Chinese means ‘salvation for the common people’.
JJPTR, JJ Poor to Rich and JJ Global Network are the three forex trading entities listed on the website www.jjptr.com. It has been reported that the three companies are on Bank Negara Malaysia’s Financial Consumer Alert list as of Feb 24.
MySinchew reported that Johnson Lee is the son of the head of Southern University College’s Entrepreneurial, Incubation & Career Centre (EICC) in Johor Bahru. University authorities are investigating whether any student or teaching staff had been involved in the “JJPTR investment scam”. Rumour has it that some students took part in the scheme.
JJPTR has all the elements of a story that’s been told too many times – get rich quick, high returns, and then, game over.
Reactions from investors have been mixed. Some do not believe a hacking took place. Understandably, some are distressed at losing their hard-earned money, and in some instances, their life savings. Incredibly, there are still some who are willing to continue investing in JJPTR, which begs the question of “Will some people ever learn?”