Murali Krishnan Naidu, a Singapore person of Indian origin, has been sentenced to more than seven years in prison for scamming 20 people — some of them his own family members — out of SGD 2.5 million over six years.
According to a report in The Straits Times, court documents said that Naidu, now 53, had run a scam where he promised his investors — rather, his victims — that their money would be invested in a lending business set up by his wife, and that this would fetch handsome returns for the victims.
The gullible victims, who were among his acquaintances, friends, and family, withdrew huge sums out of their savings — it averages to SGD 125,000 per victim — and “invested” the money in Naidu’s wife’s lending business.
This business was not an imaginary one. According to the public prosecution, Naidu’s wife had registered a licensed money-lending company named San Tee Credit (STC) in Singapore in August 2006. Naidu was the manager there, as an employee of his wife, the company owner.
Naidu knew how the money-lending business functioned. He had worked for such a firm for four years before his wife set up her own company.
Lured by the promise of huge returns
A private money-lending business works in a manner similar to a lender bank. The investors are, in effect, the depositors, and they would get a fixed interest on their investment principal on a periodic basis. This interest would be lower than the interest charged by the money-lending business from its borrowers. The difference in the deposit interest (paid to the investor) and the lending interest (paid by the borrower) would be the business’s profit.
Deputy Public Prosecutors Jordon Li and Yeow Xuan told the court that the accused knew how to raise money through investment agreements. That is what Naidu did, before he stopped paying his investors the promised interest.
One of his victims, aged 69, gave the accused SGD 335,000 to invest in STC. This money was her entire life’s savings.
Another of his victims, aged 49, gave him about SGD 120,000 to invest in STC. To do this, she took out a mortgage on her home in Malaysia.
The victims fell for the scam because Naidu lured them with the promise of huge returns — 2.5 to 3 per cent interest per month (or 30-36 per cent per annum), and repayment of the invested principal one year from the date of the investment agreement.
In theory, the person who invested SGD 335,000 could make a sum of SGD 120,600 in interest alone, before getting her full original capital back. The lure was irresistible for the victims.
In effect, they woke up to the Ponzi scheme when Naidu stopped paying them interest altogether from early 2013. The victims realised that their money was gone.
According to the prosecutors, it never became clear what Naidu did with the money stolen from 20 people. He was sentenced to seven years and four months’ in jail on January 22, 2024. In total, he had faced 60 charges linked to all the victims.
His wife’s company STC, in which the victims had invested, had lent no money to any borrower between 2011 and 2013, as per scrutiny by the Registry of Moneylenders. However, STC continued to renew its licence by paying the Registry fees.
The valid licence convinced the victims that they were investing in a legitimate company. What happened to STC after 2013 is not known.