SINGAPORE – An American man who ran a fraudulent forex trading scheme involving more than $18 million from over 1,300 clients was sentenced to three years and three months’ jail on April 25.

At the time of the offence, Michael Philip Atkins, 51, was a director at Singapore-based firm Aureus Capital. 

He was its majority shareholder and had full control of the scheme, which used only a fraction of the clients’ monies for forex trading. The operation was run in the style of a classic Ponzi scheme, where purported returns to clients were paid using the funds from other clients.

“Such a business model was clearly unsustainable and... the company finally imploded,” said Deputy Public Prosecutor Hon Yi in earlier proceedings.

In the end, the clients received around $12.7 million in total from Aureus Capital and they suffered nearly $6 million in losses.

On April 15, Atkins pleaded guilty in a Singapore district court to carrying on a business for a fraudulent purpose.

Between April 2013 and July 2014, Aureus Capital offered leveraged foreign exchange trading services and schemes.

Clients entered into agreements allowing it to engage in forex trading on their behalf.

Under these agreements, the company would be entitled to 40 per cent to 50 per cent of the profits generated from the trading, while the losses from trading would be fully borne by the clients.

At the time of the offence, Aureus Capital maintained two trading accounts with Oanda Asia Pacific, a separate company which offers foreign exchange trading.

Clients were told that Aureus Capital would manage their funds by trading forex on Oanda. They were also instructed to transfer cash into a bank account.

The bank account received more than $18 million in total from clients between April 2, 2013, and July 15, 2014.

Instead of using the monies for forex trading, more than $14.7 million was used for other purposes, such as paying Aureus Capital’s directors, including Atkins. Only around $1.7 million of the more than $18 million was deposited into Oanda, the court heard.

Weekly statements sent to clients concealed the fact that only a small portion of clients’ funds was used for forex trading. The statements reported profits which were not reflective of actual trading results. In fact, Aureus Capital was making losses on its Oanda trading accounts.

The clients said they were told on June 13, 2014, that Aureus Capital needed to cease trading as it was “acquiring a banking licence”.

The clients did not receive any money when they asked for their investments to be withdrawn. E-mails from the firm claimed it was being rebranded and that all clients’ monies would be refunded by July 28, 2014.

Clients alerted the police when the company and its directors became uncontactable. 

Atkins was arrested in 2014 and an Interpol red notice was issued against him after he jumped bail. Such a notice requests law enforcement units worldwide to locate and provisionally arrest a person pending extradition, surrender or other legal actions.

He was traced to the US in 2017 and an extradition request was sent to the authorities there in 2020. He was successfully extradited to Singapore and re-arrested here on March 18, 2023.