By Chris Lang
The Taipei Times recently reported that a husband and wife had been convicted and given prison sentences for running a carbon credit trading scam. The scammers raised more than US$3.3 million over two years.
Hsu Chu-tsai (徐鉅裁) and his wife Yang Liang-liang (楊亮亮) were the owners of a company called Rich Alliance Good Health Co. On 25 August 2022, the Hsinchu District Court ruled that the couple were guilty of financial fraud and illegally operating an investment company.
Hsu was sentenced to eight years in prison, and Yang was sentenced to four years. The judges also confiscated the US$3.3 million profits that the couple raised and imposed a fine of US$827,500 on the company.
Rich Alliance Good Health Co
Hsu and Tang registered the company Rich Alliance Good Health Co in Hsinchu City in 2016. At first the company marketed equipment to generate renewable energy and to control pollution.
The Taipei Times reports that in 2019, the couple started to promote carbon credit trading. They claimed to be authorised by international bodies that deal in carbon emissions trading schemes. They enticed people to invest with promises of lucrative returns.
Hischu prosecutors who carried out an investigation into Rich Alliance Good Health Co stated in a court filing that,
Although Hsu and Yang knew their company was not dealing in ‘carbon credit trading,’ they set up a trading platform to lure investors by promoting the company as engaging in legitimate international schemes for carbon neutralization and the sale of carbon credits, taking advantage of the worldwide trend for renewable energy sources and reducing greenhouse gas emissions.
London Carbon Credit Exchange
Hsu claimed to have studied at the Ifo Institute for Economic Research in Germany. He also claimed to have been head of foreign exchange trading at a leading bank in Singapore and that he was authorised to trade on the “London Carbon Credit Exchange”.
The prosecutor’s investigation revealed that most of Hsu’s claims were fraudulent, backed up with forged papers about his business ties in Germany and Singapore. The London Carbon Credits Exchange did not exist, the prosecutors argued, as before Brexit, the UK was part of the EU Emissions Trading System.
Actually, a company called London Carbon Credit Exchange Limited was registered with Companies House in the UK in June 2010. But it was based in Bristol and there is no evidence that it was international platform for trading carbon credits (despite its name). In any case, in June 2020, the director of London Carbon Credit Exchange Limited applied to strike the company of the registry. It was dissolved on 20 October 2020.
Carbon credit trading scam: Annual profits of between 18 and 48% were promised
Hsu and Yang scammed 78 investors from Taiwan, China, the USA, and other countries. Investors handed over US$3,000 to Rich Alliance Good Health Co and received in return a “carbon credit voucher” for 300 carbon credits.
Hsu and Yang promised that that their “carbon credit certification center” guaranteed the vouchers. They promised returns of between 18 and 48% per year. Investors received some payments at first, but in the second year investors faced shortfalls.
In June 2020, Hsu wrote to investors claiming that the director of the London Carbon Credit Exchange had died of COVID-19. As a result, carbon credit trading was suspended in London and payments had been delayed. At this point, some of the investors smelled a rat and reported Rich Alliance Good Health Co to Taiwan’s authorities.
In their ruling, the judges said that,
The couple lured people to invest by false promises of high rates of return from the carbon credit trading scheme. Many investors lost their savings and incurred huge financial losses. It also resulted in damage to Taiwan’s financial system and its regulation.