EVEN seasoned businessmen fall prey to fraud. Dangle an irresistible deal in front of them and some may just bite, even if reason and experience dictate otherwise. To Tan Yen Fu, it was a foible he could exploit.

The scheme he hatched was audacious: he approached businessmen pretending to represent a bank, taking advantage of the Asian financial crisis in 1997 and 1998 when many businesses needed money desperately. He promised them collateral-free loans from foreign investors if they paid him an upfront fee. Amazingly enough, he managed to convince several businessmen to pay hundreds of thousands in upfront fees and to sign up for loans worth millions. One businessman was even willing to go overseas to sign an agreement with a foreign company to secure the loan. They never got any money.

On March 8, 2000, the Commercial Affairs Department (CAD) learned that Tan, also known as William, was deceiving people into making upfront fee payments for bank loans which never materialised. Tan operated using a company, Funder Williams Consultants Pte Ltd, located at Tat Hong Building in Howard Road. CAD seized records from Tan's office and found evidence of his scams.

Web of Deceit
Assistance was also obtained from Interpol to verify the status of his overseas principals. It was established that they were not financial institutions and that no bank would grant loans based on the type of instrument that Tan issued his victims. 'Advance fee fraud is often transnational in nature, and it is not easy to convict the perpetrator,' said Johnny Tan, the lead investigating officer (IO) who worked on the case. 'This case demonstrates one of our successes in conviction of transnational advance fee fraud cases.'

He added: 'The investigation into the case was challenging as we had to follow the trail all over the world and gather evidence through our international police network by working closely with our overseas counterparts.' The CAD investigation unearthed a complex web of deceit Tan spun to mislead his victims, which included prominent businessmen, and those who unknowingly joined his business ventures. It holds important lessons for businessmen who often find themselves approached for all kinds of deals. Basically, Tan's victims were enticed by his claim that they could obtain huge loans by paying a minimum fee and without having to pledge any collateral. But they should have been aware that they could never get such a deal from real financial institutions. Still, many of them did not heed the warning signs and took the plunge.

Victims Duped
'The victims in this case were duped into believing that it is possible to obtain huge amounts of loan without collateral. This is not possible,' said lead IO Tan. 'No matter how hard-pressed for funds, one should always act prudently and seek independent professional advice before entering into any agreement that requires monetary commitment.' Another lesson to learn - and it's nothing really new - is not to fall for appearances. CAD investigators found that Tan was adept at impressing his victims. He passed himself off as an accountant and even indicated that on his name cards. He posted an impressive profile of himself on his company's website and rented a posh office in Raffles Place. He was always dressed like a businessman and drove a BMW to create the impression that he was successful.

Tan, in reality, was an undischarged bankrupt. He was made a bankrupt on April 4, 1997 for defaulting on payment of credit card debts. Yet, between December 1997 and March 2000, he was managing the business of Renny Williams Capital Consultancy Pte Ltd, later renamed Funder Williams Investment (International) Pte Ltd, and Funder Williams Consultants Pte Ltd. Both companies were dealing with financial services, investment and business funding for loans.

Renny Williams Investments (International) was set up on Dec 19, 1997 as a joint venture between Tan, two businessmen and a lawyer, after he convinced them of the business potential. Although he was the main person managing the business, he did not name himself as a director as he was an undischarged bankrupt. Instead, he placed his wife as a shareholder and director. The registered office was then located at Goldhill Plaza. Within months of setting up, Tan used the company's funds to buy a Mercedes Benz and a country club membership. On May 21, 1998, three of the directors of the company resigned as the overheads were high and no business was done.

The office moved to Howard Road. At that point, a freelance broker joined Tan as a consultant and on Tan's suggestion, they formed Funder Williams Consultants (FWC) on July 7, 1998. The consultant and Tan's wife were directors of the company. Again, Tan did not name himself as a director although he was running the company. However, the consultant soon discovered that Tan was an undischarged bankrupt and, realising something was amiss, resigned as director on March 16, 1999 and transferred his shares to Tan.

Free Shares
In March 1999, William offered his secretary directorship in the company. The offer included 10,000 'free shares'. But she also discovered that he was a bankrupt and was duping clients to pay upfront monies for false loans. She subsequently resigned as director on Dec 31, 1999 and returned the 10,000 shares to Tan.

On July 13, 1999, Tan changed the name of Renny Williams Investments (International) to Funder Williams Investments (International). On Dec 28, 1999, a retiree joined Tan as one of the directors of the company. The office was shifted to Ocean Building at Collyer Quay.

Tan was brazen enough to openly operate a website hosted in Singapore, www.fegroup.com.sg. According to the website, Funder Williams Consultants was part of Singapore-based Funder Williams Group (FWG). The group purportedly consisted of Funder Williams Holdings (International), Funder Williams Investment (International), Funder Williams Offshore Trust, and FWG International Consultants. Apart from Funder Williams Investment (International), the other companies were not registered in Singapore. Tan also told his clients that the group included Funder Williams Investment Bankers.

False Claims
He sold a huge lie to his customers: to start with, he used the name William Darren Tan in his business dealings, a name different from that under which he was made a bankrupt. He made himself out to be the president and CEO of the Funder Williams Group since 1992. He described himself as an experienced banker, a member fellow of Chartered Institute of Bankers and a member of the Certified Practising Accountants. He claimed to have started the business in 1982 and built the company into an international corporation with offices in seven locations.

Among his varied achievements, Tan also claimed to be a member of the International Who's Who of Professionals. At his office at Ocean Building, Tan displayed a plaque showing his admission as an associate to the Australia Society of Certified Practising Accountants. This apparently impressed his victims. The plaque was later seized by CAD. It was found to be false - there was no such certificate issued to Tan.

During the Asian crisis, when bank loans were hard to come by, Tan told potential customers he could get loans ranging from US$5 million to US$30 million from foreign investors without collateral. All his clients had to do was pay him an advance commission of between $10,000 and $140,000. He would then arrange for a lender bank and the collateral for the loan.

Five Fell for Scam
Five businessman fell for Tan's scam and were cheated of a total of around $623,000. They were seeking funding for their business projects locally and overseas. The projects included the operation of a coal mine and the reconstruction of a hotel overseas. Some needed money because the economic downturn had hit their companies hard. In all cases, the loans never materialised. In one instance, Tan had the audacity to sue one victim to recover the balance of the upfront fee.

Hard as it is to believe, Tan even got one of the victims to go to the US to sign an agreement with his principal in Los Angeles directly. Thinking that this would expedite the loan arrangement, the businessman signed the agreement and paid the US company in California an additional sum of US$150,000 to secure the loan. The loan, of course, never took place.

Indeed, Tan claimed that several overseas companies were his principals. He provided the victims an irrevocable loan guarantee commitment (LGC) letter and said that this was a bond that could be presented to any bank to obtain a loan. Upon receipt of an LGC from Suevic Ltd, a company based in Cyprus, one of the businessmen went to a bank at Collyer Quay, Singapore, and tried to obtain a loan. He was told by the bank that he was being cheated. When he confronted Tan, the latter said it was not his fault, nor the fault of his principal, as the victim did not have a lending bank in the first place.

Tan was charged on Oct 11, 2001, and convicted on March 28, 2002. He was sentenced to a total of five years and two months' imprisonment for four counts of cheating, attempting to cheat, abetment to cheat and other offences under the Companies, Bankruptcy, Accountants and Banking Acts.

Taken into consideration was the scale of Tan's operation and the large sums he cheated his victims of, the fact that the fraud was premeditated and meticulously planned with Tan deploying an elaborate scheme to deceive his victims and to cover his tracks. Tan also did not make any restitution to the victims.

'There is no such thing as a free lunch,' said lead IO Tan of the case. 'When a deal is too good to be true, it probably is.'

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