Logo of Phnom Penh Post newspaper Phnom Penh Post - For thousands of investors, Empire Big Capital’s promises almost sounded too good to be true – they were

For thousands of investors, Empire Big Capital’s promises almost sounded too good to be true – they were

With their flashy cars and high-profile venues, the Hong Kong-based company’s investment pitch looked like a dream come true to many. For tens of thousands of people across the Kingdom, the dream turned into a nightmare.

Sokha Roy, with other duped villagers, explains how the company allegedly swindled him.

Sokha Roy, with other duped villagers, explains how the company allegedly swindled him. Heng Chivoan

The luxury cars first arrived in tiny Techo Akphivat village in Kampot province in February 2015, carrying representatives from a company being sold as the next big thing, local schoolteacher Sokha Roy recalls.

At a presentation given by a man named Phearun, Roy was explained the benefits of the scheme: 10 percent monthly dividends on a minimum investment of $2,000, with incentives if investors could spread the word and get others to sign on.

The company, Empire Big Capital, was a Hong Kong-based entity working with two other locally registered Cambodian companies – the Asian Investment Fund and the Investment Consultant Association.

Its representatives invited the villagers, most of whom were farmers or former soldiers who had been given social land concessions in the area, to Phnom Penh to the lavish Sokha Hotel on the Chroy Changvar peninsula and to sessions on Koh Pich to learn how they could properly invest.

For three months, Roy attended each one. “Those who attended the seminars included the provincial governors, district governors and even the military and police generals,” he said. “I want to invest and make more money because we are so poor, because they told us that it will be so.”

What Roy and his fellow villagers saw was the very embodiment of success – nice cars, expensive hotels and promotional material with inspirational quotes from people like Warren Buffett. They also had seen television broadcasts on stations like SEA TV and Hang Meas TV, as well as articles in newspapers – including the Khmer edition of The Phnom Penh Post – covering the company’s Cambodia launch in 2013, with proclamations from executives about the potential benefits.

Investor Sith Pov, from Prey Veng.

Investor Sith Pov, from Prey Veng. Heng Chivoan

“Empire Big Capital is not a company selling goods or services, but a joint investment company providing trainings to those investors who are inexperienced to become successful to reduce any possible risks,” Tri Pollis, a general manager of the Cambodia branch, told SEA TV at the launch.

Perhaps most importantly, the company representatives pointed to registration certificates from the Ministry of Commerce and the Ministry of Interior, inked in 2013, which gave the investment scheme a last seal of approval for those on the fence.

Part of the training process, Roy and other investors interviewed by Post Weekend said, was to explain how to get loans from banks and microfinance institutions in order to put money into the scheme. They were taught to lie, saying they needed cash for a business venture or for home extensions, which opened up what the company said would be virtually limitless possibilities of returns.

Roy cobbled together his life savings – $5,000 – and then went to a bank for the rest, eventually putting $44,000 into the company.

“After I deposited the money in 2015, nothing strange happened. We could receive the 10 percent dividend in July and August,” Roy said. “In December 2015, we stopped receiving money from them. Again and again they told us the money had not arrived and asked us to wait until the next month. We have not received the money until today.”

Nuon Chhor with EBC papers.

Nuon Chhor with EBC papers. Heng Chivoan

Roy was far from alone. For many residents in his village, life was fundamentally altered. This was the case for Nuon Chhor, 57, a former soldier who lost both of his hands and one eye in 2000 while demining in Koh Kong province. He moved to the village after being given a concession and has been living off his $250 monthly pension. He first invested $6,000 in June 2015, and, seeing returns in the first few months, pumped in another $8,000, which he borrowed from a bank.

“This fraud completely changed my family’s life. We had to collect all our savings to pay the debts,” he said. “I did not have to sell my land because my two daughters, who are working in garment factories in Phnom Penh, have been helping me. Now, I still owe them half of what I borrowed.”

Chhor is one of the lucky ones. Many other villagers Post Weekend spoke with had sold their land, others had left to work in Thailand and there were unconfirmed rumours of people elsewhere who had committed suicide because of their debts.

In interviews with victims of the fraud and their lawyers, Post Weekend found the company had reached every corner of the country, from the remote area of Anlong Veng in Oddar Meanchey to Prey Veng province. While most were rural and poor, many of those defrauded said they knew of government officials who also fell victim. The Ministry of Interior estimated on May 31 that the scheme may have defrauded as many as 50,000 people, robbing them of up to $400 million, though official numbers are not yet known.

Two years since many parked their life savings into the scam, the government now says it is taking action. It has formed a committee devoted to the case, with members from the Ministry of Interior, Ministry of Commerce, Securities Exchange Commission of Cambodia, the Ministry of Economy and Finance and the Ministry of Justice.

Ly Sovanna, a lawyer with the Bar Association of the Kingdom of Cambodia, is currently fielding complaints from victims all over the country, compiling evidence for a class-action suit. As of this week, he could not confirm the number of complainants, but he said that more than 100 representatives had come to collect forms to fill out.

“So far, we still do not know about the complaints and the number of victims, or even who are the accused,” Sovanna said at the end of June. “Therefore, the Bar Association needs help from the affected people all over the country. If they have their own lawyers, the Bar will work with them to track the information.”

The logistics of the case pose difficulties for Sovanna and his small team, in part because they will need to fan out to remote areas to gather complaints.

“So far, we still do not know about the complaints and the number of victims, or even who are the accused.”

Not only are there likely thousands of potential complainants, but because of the way the company was structured – incentivising investors to promote the product to their friends and neighbours – questions remain as to who was a victim and who was an employee.

“Many of them are afraid because they were the ones to collect the money, along with their money, and bring it to the company,” he said. Because of this, Sovanna says a “first-come, first-served” policy will be used by which nobody can sue another person who has filed a complaint before them.

Then there is the issue of culpability and the recovery of funds. The four heads of the companies – Malaysian national and EBC head Sean Tan, ICA’s Huot Sovann, AIF’s Chi Gosaly and Long Sambath, whose exact role is unclear – are all suspected to have fled the country.

A group of investors from Techo Akphivat village in Kampot and from Kor Kou Village in Prey Veng.

A group of investors from Techo Akphivat village in Kampot and from Kor Kou Village in Prey Veng. Heng Chivoan

Because of this, Sovanna says the police are searching for the “upline” workers – those just below the top tier who handled the money. Getting compensation for victims would require seizing those employees’ assets, which are unlikely to come anywhere near the total invested amount.

“The Ministry of Justice and the Bar Association have asked the people to help track down the employees’ [directors’ and upline] assets so that the lawyers could freeze them to guarantee the compensation,” Sovanna said.

Ngi Chanphal, the secretary of state at the Ministry of Interior, declined to comment on the case, saying simply that the complaints “are in the hands of the court”. Asked why it took nearly two years for the Interior Ministry to fully investigate, he appeared to deflect blame to The Post. “As a newspaper, you should have known [about] that a few years ago,” he said.

Part of the reason for the delay, Sovanna says, was what appear to be coordinated efforts by the company to convince people not to get the law involved. According to Sovanna, following an announcement by the SECC flagging the company for fraud in May 2015, an inter-ministerial committee was formed to investigate its operations. It summoned the three company directors for questioning but the investigation was called off after a letter was sent, purportedly from investors, asking the government not to intervene.

Por Yuthpithy thumbs through documents.

Por Yuthpithy thumbs through documents. Pha Lina

“We could not make sure it was really from the people, but it had thumbprints and was submitted by the so-called representative of the people,” he said.

None of the victims interviewed were aware of such an intervention but they described persistent efforts by company representatives to dissuade them from going to the police. In one case described to Post Weekend, representatives even asked for more money from victims as a kind of service fee to unlock the promised dividends.

In two instances in 2015, groups of EBC representatives were arrested in Takeo province and in Siem Reap province for trying to convince people to put their money into the scheme. Nonetheless, the company directors continued to operate the business from their Tuol Kork office until January of this year.

It was at this office that investors would often come to deposit money, and then, in later months, to demand an explanation. After his $8,000 investment disappeared, Por Yuthpithy made such a trip to the company headquarters. At a restaurant nearby, he met Keb Sovanna, another victim – defrauded of more than $71,000, mostly borrowed from relatives, friends and the bank.

“His story made me feel so sorry so I went to the company and asked the head of the network where can we get our money?” he said.

Sovanna’s plight, which he himself corroborated, inspired Yuthpithy to take action. After the company shut their offices, he housed a group of protesters who came in from the provinces to demonstrate. “People came to me crying and telling me about their problems and their bad health,” he said. “I hate injustice.”

Por Yuthpithy, who invested $8,000 and is now helping other victims.

Por Yuthpithy, who invested $8,000 and is now helping other victims. Pha Lina

To try to help people organise, Yuthpithy created a Facebook group to bring victims together, which quickly became populated by company employees telling them to stop complaining publicly or they would never get their money back.

In one back-and-forth recorded audio exchange in the group, Yuthpithy even conversed with Sovann, one of the directors, who otherwise seldom engaged with investors.

“By inciting people to sue one another, asking them to sue the representatives, or settling it with the company: Which is the best option?” Sovann asked, after accusing Yuthpithy of taking $5 to $10 for every signature he got on complaints against the company.

“It is as if we were living in Pol Pot Regime. The ones who could save us are comparable to those who saved us from the genocide.”

Undeterred, Yuthpithy continues to help victims and says he now fields more than 50 calls a day regarding cases. He has travelled to meet victims in Anlong Veng, Siem Reap, Preah Vihear and Banteay Meanchey provinces, instructing them on how to piece together evidence to file a complaint. An engineer in Phnom Penh working mainly on construction projects, he says his work has become slower because he is stretched so thin.

“Many times I have had to apologise to the contractors but they understand what I’m doing,” he said.

For Sovanna, the victim who originally inspired Yuthpithy, the only way to turn his life back around would be for the court to secure compensation. He said his relationships with his wife and with the relatives and friends he borrowed money from have deteriorated.

“I know four or five families [in my area in Tbong Khmum province] who were also tricked and their life was changed just like mine,” he said. “It is as if we were living in Pol Pot Regime. The ones who could save us are comparable to those who saved us from the genocide.”