Sunshine Empire duo start serving jail sentences

Sunshine Empire founder James Phang Wah arriving at a district court yesterday.

SINGAPORE - The founder and the former director of multi-level marketing (MLM) company Sunshine Empire have surrendered themselves at a district court to start serving their respective jail sentences for fraud.

The MLM company sold "lifestyle packages" promising high returns. However, the "investment returns" were generated from new members signing up, rather than genuine profits.

The Straits Times reported that James Phang Wah, 51, the founder of the firm, was sentenced to nine years in jail and fined $60,000.

Jackie Hoo Choon Cheat, 31, the company's former director, was sentenced to seven years behind bars.

The start of the sentences for Phang and Hoo were delayed for them to settle their personal and business affairs and spend time with their families.

The two were convicted last year. They subsequently appealed, but the appeal was dismissed by the High Court last month. However, Phang has asked his lawyer to apply for permission to take his case to the Court of Appeal, arguing that it raises questions of law and public interest.

According to court papers, Sunshine sold almost 26,000 packages from August 2006 to October 2007, earning $180,000.

Phang reportedly received more than $7 million in "consultancy fees". Hoo received about $900,000.

Phang's wife Neo Kuon Huay was paid nearly $950,000 as the group's "sales director", a job that she did not do.

She has been fined $60,000 for falsifying payment vouchers.

The Commercial Affairs Department has seized about $21 million in Sunshine assets and will determine how the funds should be disbursed to the firm's creditors.

When sentencing the duo, District Judge Jasvender Kaur said Phang and Hoo knew the scheme was not sustainable, but still continued for the monetary incentive.

Phang has also been charged for not keeping proper accounts and possessing uncensored and obscene films. A pre-trial conference will be held later this week.