Police in Siem Reap province on Saturday arrested seven people who were running an apparent Ponzi scheme, duping investors out of thousands of dollars by promising a 10 percent return on deposits made with their company.
The arrests followed a warning last month from the Securities and Exchange Commission of Cambodia that the company, Empire Big Capital, and two other firms were operating illegally in the country.
Deputy provincial police chief Thong Sokhun said Sunday that his officers apprehended six people at about 4 p.m. on Saturday, as they were making a presentation to potential customers at a hotel. He said a seventh member of the group was arrested elsewhere, but would not elaborate.
“They created a group with seven members and convinced people to use their financial services by promising a high interest rate immediately,” Mr. Sokhun said.
“For example, when a person put his or her $10,000 with them, the group offers 10 percent back immediately, and then 10 percent interest every month. But when people needed their money, they could not get it. That’s why they informed us and we took action,” he said.
On its website, EBC claims to be based in Hong Kong and says that it “manages commercial activities in trade of global fund management, petroleum products, constructions managements [sic].”
“Company and its partners are specially having considerable expertise in structuring complicated transactions and projects to the satisfaction of all involved parties and beneficiaries,” it says.
Following Saturday’s arrests, Siem Reap provincial governor Khim Bunsong issued a statement clarifying the status of EBC, which he said was not licensed by the National Bank, the Finance Ministry or any other relevant bodies.
Last month, the Securities and Exchange Commission of Cambodia released a statement warning members of the public against investing funds with EBC and two connected companies, the Asean Instrument Foundation and the Investment Consultant Association.