Four executives of UFun Store Co Ltd, were arrested yesterday on charges of operating a pyramid scheme. According to statements from authorities in Thailand, the alleged fraud has affected more than 14,000 individuals, with monetary damages in excess of 10 billion baht. Thailand authorities are on the hunt for three other Malaysian citizens believed to be connected to the UFun scheme.

According to Thailand authorities, the Sunday raid was a result of several complaints made by victims of the alleged UFun pyramid scheme. The scheme was international in scope, involving victims from Thailand, Malaysia and Indonesia. Approximately 250 million baht have been seized by the Anti-Money Laundering Office.

UFun sold various cosmetics and supplement products via a convoluted referral scheme. The scheme focused primarily on existing customers bringing in new participants, rather than on selling the products.

Rittidej Warong, a resident of Bangkok and owner of a major share of the business, was arrested during the early morning raids yesterday. Rattavich Thiti-arunwat, one of the top recruiters at UFun, was arrested at his residence in China Mai. Authorities seized several luxury items from his property. Chaithorn Thonglorlert, a shareholder in UFun, was apprehended in Bang Na. Police seized several hundred thousand in baht currency from Thonglorlert’s residence.

Following the arrests, Chief of Police, Somyot Poompanmoung, held a press conference and revealed some details about the ongoing investigation of UFun. According to Poompanmoung, authorities took an interest in UFun as a result of disgruntled consumers who were filing official complaints at government offices across Thailand in 2014. On the 8th of April, the authorities declared UFund a pyramid scheme and issued arrest warrants for all company shareholders and directors. Somyot Poompanmoung was quoted in an article by the Bangkok Post:

“We found the company did not mention products it registered to sell in its sales pitches. Instead, it urged clients to expand their teams by offering in return high-value items such as cars or gold bars. That way, the money it made mainly came from new members rather than from selling the products.”

UFun was utilizng their own cryptocurrency called UToken, that was used by customers to purchase various products offered by the company. However, members were heavily incentivized to bring in new clients with a very hefty bonus scheme. The authorities examined the promotional material and the amount of funds that were derived from new entrants into the scheme, and concluded that UFun’s profit from recruitment of new members greatly overshadowed proceeds originating from product sales.

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