US receiver finds Singapore money trail

US receiver finds Singapore money trail
The reception area of USFIA Singapore at its office at AZ@Paya Lebar.
PHOTO: The New Paper

A local gemstone investment company, whose director is being investigated by the US Securities and Exchange Commission (SEC) for an alleged pyramid scam, has said it is a separate entity from its parent company in Los Angeles, California.

USFIA Singapore's co-director Wong Yet Loong told The New Paper last Thursday that his company only resells stocks of amber received from USFIA Inc.

But a US court-appointed receiver, who has been tasked to look into director Steve Chen's assets and business affiliates, had argued otherwise.

The receiver, Mr Thomas A. Seaman, published his Second Report on Feb 26, stating he had discovered a money trail from USFIA Singapore to two US law firms hired to represent Mr Chen, a US citizen, and the other entities under receivership.

The report said a Singapore lawyer had told Mr Seaman that both companies were "unrelated".

It stated: "Nevertheless, an attorney located in Singapore who purported to represent USFIA Singapore sent several communications to the receiver's counsel claiming USFIA Singapore was unrelated to USFIA Inc.

"When asked for documents to support his claim that USFIA Singapore is unrelated to USFIA Inc, the Singapore attorney provided none."

Neither the report nor Mr Wong revealed the name of the Singapore law firm representing USFIA Singapore.

USFIA, which stands for United States Fine Investment Arts, made headlines last September when a US court froze Mr Chen's assets of around US$32 million (S$45 million) and bank accounts, placing them under receivership.

He also faces a US$100 million class action suit filed by an LA law firm representing overseas investors.

TNP reported last November that Mr Chen is a director and 80-per cent shareholder of USFIA Singapore, registered here in April 2014.

The company was placed on the Monetary Authority of Singapore's Investor Alert List last Dec 15.

While the receiver's report says that USFIA Singapore is simply the Asia Headquarters of USFIA Inc, Mr Wong told TNP over the phone that his company is independent of USFIA Inc.

"We just collect stock from them (USFIA Inc.)... the amber stones. They are our suppliers. When we get the products, we supply them locally."

Aside from selling amber products, the Singapore firm seeks investments in amber mines and gemcoins, a virtual currency.

Mr Seaman was appointed last September after the SEC filed a civil suit against Mr Chen.

More than 40 other companies affiliated to Mr Chen were also scrutinised.

RETAINERS

The Second Report alleged that two US law firms had received large retainers from USFIA Singapore

On TNP's previous visit to the USFIA Singapore office in AZ@Paya Lebar building, both companies' names were prominently displayed.

On USFIA Singapore's website usfia.com.sg, the USFIA Inc name appears at the top of the page.

Its About Us page also explains the nature of USFIA Inc's business in amber mining and processing.

Since Dec 31 last year, the receiver has recovered roughly US$22 million and taken control of assets linked to Mr Chen, including the USFIA office building, a hotel, an apartment building, a warehouse, a few single-family homes and parcels of undeveloped land.

The Second Report stated: "Aside from some income generated by the hotel and rental properties, the receivership entities had no significant source of income other than money raised from investors."

Mr Seaman has recommended selling the properties.

zaihan@sph.com.sg


This article was first published on March 8, 2016.
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