13-053MR ASIC acts to stop offshore scam netting Australian investors
Tuesday 19 March 2013
ASIC has obtained interim orders in the Federal Court in Adelaide stopping China Environment Group (CEG) and its director, Mr John William Ullmann, from selling CEG shares and preventing them from providing financial services in Australia.
ASIC alleges that CEG, a company incorporated in the British Virgin Islands (BVI) entered into an agreement with Lucky Pearl Investments Limited, (Lucky Pearl), also based in the BVI, for the sale of CEG shares. However, it was Mr Ullmann’s personal shares in CEG which were marketed to Australians by two companies associated with Lucky Pearl, Anova Corporate Services Limited (Anova) and Great Wall Capital Limited (GWC). Both these companies use addresses in Shanghai, China.
None of CEG, Anova, Lucky Pearl, GWC, or Mr Ullmann hold an Australian financial services licence.
ASIC alleges that Mr Ullmann, as the sole director of CEG, acquired 100 million shares in CEG for one US cent each. Investors were then sold Mr Ullmann’s shares for US$1.00. ASIC further alleges that promotional materials prepared by Mr Ullmann and CEG were presented in a manner so as to deceive investors into believing that their money would be directed to CEG to enable it to develop clean air technologies in China.
ASIC alleges that, in fact, 80% of the money was paid as commission to Lucky Pearl and the balance paid to Mr Ullmann and another company believed to be associated with Lucky Pearl.
Many of the persons who purchased CEG shares from Mr Ullmann had previously acquired shares marketed by Anova and GWC in other companies including Hydro Solutions Asia and Delmedica Investments Limited.
Until further order, CEG and Mr Ullman cannot:
provide advice in relation to any financial product
deal in, or arrange access for any person to any financial product
solicit investment in or receive funds related to CEG
alter, amend or destroy any books, records or documentation related to CEG.
The matter has been listed for a directions hearing on 28 March 2013 at 10 am.
Cold-calling fraudsters usually contact their victims by telephone and convince them to invest in schemes involving the purchase of shares in overseas companies. They operate without AFS licences and use false addresses and phone lines often routed to another address. In the vast majority of cases, investors lose all of their money.
Significant features of this type of scam are:
they are regularly supported by sophisticated internet technology including a website which purports to provide investors with real-time information in relation to their trading
victims are often initially contacted by a person surveying their interest in investing generally
victims are lured with promises of high returns and then subjected to pressure in order to induce them to hand over their money, and
when a person falls victim a first time, they are often called back and encouraged to invest in a more sophisticated trading strategy which requires even more money.
If you are suddenly and unexpectedly contacted by somebody trying to sell you a financial product, you should:
hang up the telephone
check ASIC registers to see if the person or company selling the financial product is licensed or authorised to do so
call the company back using the details on the ASIC register to verify its identity