Better Living Global Marketing raided, Luke Teng arrested?
Last we checked in with Better Living Global Marketing, it’s owner, Luke Teng, was attempting to solicit new investors to cover the scheme’s “cash flow problems“.
In his efforts to schmooze potential investors, Teng (right) made all sorts of claims – one of which was the revelation that he was “seriously considering” taking Better Living public.
Better Living Global Marketing’s cash flow problems began back in early 2014, with affiliate ROI payments grinding to a halt.
Over the past year, BLGM’s failure to pay out its advertised ROI resulted in seventeen BLGM investors lodging complaints with Hong Kong police.
This prompted an investigation by the Commercial Crime Bureau, which ran parallel to Teng desperately trying to attract new investors.
The Bureau’s investigation has now apparently concluded, with Hong Kong police yesterday raiding Better Living Global Marketing’s offices.
Residences of key-insiders of the scheme were also raided, with five arrests made. One of those arrested is described as the owner of the scam, and is believed to be Luke Teng himself.
The arrests of the group, including a man and four women aged 50 to 59, were made when officers from the Commercial Crime Bureau swooped on a number of residences in Kowloon and the New Territories on Wednesday morning.
The members of the group were arrested for conspiracy to defraud and were detained overnight.
Police officers also raided two offices of the online auction company at New Mandarin Plaza on Science Museum Road in Tsim Sha Tsui on Wednesday, seizing computers and documents for investigation.
Notably the South China Morning Post report doesn’t mention either Luke Teng, Better Living Global Marketing (the Ponzi scheme) or Bidder’s Paradise (the attached penny auction) by name.
The details surrounding the investigation and arrests however certainly seem to fit:
Police said they had received complaints from 17 people between April to October in 2014 about an online auction investment scheme run by a local firm since early 2013.
Investors were invited to pay at least HK$10,000 to buy points on the online platform so that they could make retail purchases with prices lower than market rates.
The items on sale included watches, mobile phones and handbags.
Online auction users were also urged to use a certain number of points daily to earn cash rewards. Referring more people to the scheme also rewarded members with extra cash. The rewards were to be deposited into the members’ accounts, the firm promised.
The Ponzi points model is a favourite of MLM penny auction scams. It was first pioneered by Zeek Rewards, which was revealed to be an $850 million Ponzi scheme after it was shut down by US regulators in 2012.
Better Living Global Marketing initially competed openly with Zeek Rewards, but switched to a model of supreme secrecy following the US regulatory shutdown of Zeek Rewards.
It is believed Luke Teng thought believed that by operating his scheme out of Hong Kong, that regulators would turn a blind eye to his operations.
Admittedly this did seem to be the case, as the months dragged on and Teng publicly went about soliciting new investors – without so much as a peep from Hong Kong’s regulators.
Now, with Better Living Global Marketing shut down and Teng in custody, we turn to what happens next.
As per information from local authorities,
Police believed the firm managed by the arrested man had allegedly conned the clients using the model of a pyramid scheme.
After the seventeen victims approached police, it was believed that about HK$4 million ($515,000 USD) in funds were involved in the alleged scam, but police now think that as much as HK$50 million ($6.4 million USD) may have been involved from the estimated 50,000 members joining the auction site.
Hong Kong (China) is largely viewed as a money laundering haven by the MLM underbelly, with many schemes recently flocking to Hong Kong-based payment processors in an attempt to bypass US money laundering regulations.
Whether Teng stashed the funds he stole from investors locally or offshore has yet to be revealed. The results of any recovery efforts (if they exist) and return of funds to Teng’s victims have yet to be revealed.
At the time of publication, the Better Living Global Marketing website was unresponsive. The attached penny auction, Bidder’s Paradise, was still online but inoperative (a maintenance message is on display, indicating access to the site’s databases has been severed).