Eco House Scams Singapore out of Millions
Following the previous post Property Investment Schemes Gone Wrong, where we talked about the Ecohouse Property Investment Scheme which is potentially in trouble, there are new alarming developments.
Ecohouse is supposed to be a Brazilian developer which was endorsed by the government to build social housing. The scheme which offers 20% return per annum saw 1,500 Singaporean investors put in $70 million.
Initially, the investors did not get their returns as promised and hence some took action by reporting. Ecohouse tries to calm them by mentioning problems such as worker shortage and help them to restructure the scheme. Investors still did not receive their money. After which, MAS came in to put Ecohouse on the MAS alert list.
The Scam Emerges
Early this week, reporters visited the Ecohouse office in Suntec and it was closed. They gave an excuse that they were consolidating their office to London. Today, Brazilian government officially denies any relations to the Ecohouse firm. Ecohouse is not a partner of the national housing program or the state owned bank. The scam is now very clear.
Too Little, Too Late?
MAS came in to put the firm on the MAS alert list this year. However, that is after thousands of people have invested in this scam. Furthermore, does the alert list do anything concrete? Many firms were operating as normal even though they were on the MAS alert list. The new move toregulate all investment schemes are hopefully a step in the right direction. However, after seeing so many unregulated investment schemes still existing and publicly selling at even the recent investment exhibition, it is hard to wonder how effective any of these measures are.
Money Down The Drain
Since the Ecohouse owners are all located overseas, there is unlikely to be any legal recourse for the investors. There is no way for the Singapore courts to reach them. If the money has all already been transferred abroad, which is very likely, they aren’t getting any money back either. Although it is another sad story, there is nothing much they can do except learn their lesson, accept the losses and move on.
As usual, always be wary of high returns, especially guaranteed returns. Any returns above 10% per year should be examined very closely. If unfamiliar, it is always best to avoid foreign property investments. To learn how to invest smartly without taking excessive risks, you can attend ourInvest For Passive Income seminar which is taught by Calvin, Managing Director of Dr Wealth.