Thai court slaps 35.2m baht fine on pyramid scheme defendants

The Criminal Court of Thailand sentenced defendants in the pyramid scheme case, กองทุนพัฒนาเกษตรกรไทยสู่สากล (Thai Farmers Development Fund to Global) to 352 years in prison and fined them 35.2 million baht. The Department of Special Investigation (DSI) plans to use artificial intelligence (AI) to detect such scams online.

The DSI’s Financial Crime Division had been investigating special case number 40/2559 involving fraudulent activities by the company I.C. International Limited and Disthanont (surname withheld). They were accused of deceiving the public by promoting the establishment of the Thai Farmers Development Fund to Global to execute the project Million Mushroom Blocks to Redeem Cattle and Buffalo.

After concluding the investigation, investigation officers recommended filing charges against the two defendants for public fraud and fraudulent borrowing according to the Criminal Code and the 1984 Emergency Decree on Fraudulent Borrowing.

The case was forwarded to the Special Case Office of the Attorney General’s Office, which subsequently prosecuted the two defendants in the Criminal Court under case number A 263/2022. The court has now issued its verdict under case number A 234/2024, convicting both defendants as charged with 88 counts of fraud.

I.C. International Limited, the first defendant, was fined a total of 52.8 million baht, while Disthanont, the second defendant, was sentenced to 528 years in prison.

The court considered the defence’s evidence, which was somewhat beneficial to the case, and decided to reduce the penalties under Section 78 of the Criminal Code. I.C. International Limited’s total fine was reduced to 35.2 million baht, and Disthanont’s prison sentence was reduced to 352 years. However, due to the maximum imprisonment term for each count being 10 years, the cumulative prison term for Disthanont was set at 20 years under Section 91(2) of the Criminal Code.

Victim compensation

Both defendants were also ordered to jointly compensate the victims with an annual interest rate of 5% on the principal amount from the date of the lawsuit (filed on February 8, 2022) until full payment is made to each victim.

The fraudulent scheme involved recruiting members for the Million Mushroom Blocks to Redeem Cattle and Buffalo project, requiring each group of 20 participants to pay a 350 baht fee for administrative costs and a monthly savings fee of 100 baht, totalling 1,550 baht per year. After one year, members could withdraw their savings.

Members were promised benefits, including 2,000 mushroom blocks and one mushroom growing house per person, valued at 30,000 baht. This represented an annual return of 1,935.4% on their investment.

As more members joined, additional projects related to the mushroom scheme were introduced to attract further investments, offering high returns without the intention of actual implementation. A total of 88 victims were defrauded, resulting in damages amounting to 7,012,150 baht.

The DSI publicised the court’s judgment to warn individuals involved in pyramid schemes about the severe penalties, including lengthy imprisonment for each count of fraud, and asset seizure by the Office of the Prevention and Suppression of Money Laundering under the Anti-Money Laundering Act of 1999.

The Financial Crime Division is developing an AI-based surveillance system to detect and prevent internet-based pyramid schemes more effectively, reported KhaoSod.