Client: Private investor
Project: To conduct a risk assessment regarding On The Go Transport Pty Ltd
Service: Character Risk Assessment
Kaizen Enterprises was engaged in 2004 by a potential investor to provide a risk assessment of a Melbourne investment scheme 'On The Go Transport Pty Ltd'.
We immediately discovered issues that suggested the possibility of a Ponzi scheme. On The Go Transport had several characteristics which were similar to earlier frauds, including:
Further investigation revealed that the trucking business appeared to be running at a significant loss, which caused us to question where the money for continued operations was coming from. There also seemed to be significant expenditure in keeping up the appearance of an ‘empire’. On visiting the trucking headquarters and company offices, it was clear to us that there was no radio mast. Experience suggested that there should have been a radio mast present to enable communication with the supposed trucking fleet.
The company claimed to have 236 trucks, which would have equated to a capitalisation of around $9 million. We were told that the company intended to obtain an additional $35 million from investors, and, alarmed by the potential for substantial investor losses, we contacted the Australian Securities and Investment Commission (ASIC) to report the fraudulent scheme.
Throughout our assignment, our principal, Ian James, worked closely with David Elias, a journalist at The Age, regarding the matter. The Age published a number of investigatory reports into On The Go Transport, and its promoter, ‘Prince Omar Yusuf’, in November 2004 and April 2005. The Victorian Police subsequently opened an investigation into the company and uncovered a complex multi-million dollar fraud. Yusuf then fled to Malaysia. In December 2008 Yusuf returned to Victoria, where he was arrested and plead guilty to defrauding investors of $7.29 million and was sentenced to 12 years imprisonment.