Title: Thai Anti-Ponzi Law: A Stern Warning to Swindlers in the Land of Smiles
Background
- Long-standing problem with Ponzi schemes in Thailand
- Schemes target real estate and currency/stock investments
- “Guaranteed” returns disproportionately higher than traditional financial institutions
- Government response: the Anti-Ponzi Law (1991)
Ponzi Schemes and the Anti-Ponzi Law
- Law targets schemes that publicly advertise guaranteed investments with returns over the regulatory maximum interest rate (3%)
- Prosecution must prove diversion of payments to compensate earlier investors
- At least 10 investors required to bring charges
Penalties
- Fraud charges for each victim
- Five to ten-year prison sentence
- THB 500,000 to THB 1 million statutory fine
- Additional fine of THB 10,000 per day, per defrauded investor
- Intentionally refusing to disclose business information deemed a criminal offense
Strict Liability Offenses
- Two additional offenses
- Foreign exchange fraud targeting the public
- Businesses exceeding THB 5 million in investments with returns over the regulatory maximum interest rate
Defenses Against Strict Liability Provisions
- Unforeseeable economic downturns or other unforeseen circumstances, such as the Covid-19 pandemic, can provide a defense
Remaining Vigilant
- Ponzi schemes can disguise themselves as secure investments or enticing business propositions
- Anti-Ponzi Law serves as starting point in pursuit of restitution
Thai Proverb
- “If it seems too good to be true, it probably is.”