garment tycoon falls victim to $150 million investment fraud
taipei, Friday, 21 February 2025.
shen yu-hsiung, chairman of tai ya group, was defrauded of over twd 5 billion. the elaborate scheme involved promises of lucrative overseas plane ticket investments and immigration opportunities. cheng chun-chun, chairman of the hermit restaurant group, and luo pei-wen, a woman with a prior fraud conviction, allegedly orchestrated the fraud. luo, who has a prior conviction for a similar fraud, and cheng are now in custody. yu-hsiung’s family discovered the scam after his death.
details of the fraudulent scheme
The scheme, active from 2019 to 2023, involved Luo claiming she could secure high returns by purchasing overseas plane tickets in bulk [1]. She also purported to have special access to overseas immigration opportunities [1]. Luo allegedly defrauded Shen of twd 4.89 billion through the overseas plane ticket scheme and twd 54 million plus usd 8.5 million through the immigration project [1][2]. To gain Shen’s trust, Luo initially provided some returns via wire transfers and cash, later switching to accounting deductions to conceal the actual investment amount [1].
legal proceedings and implications
Following Shen’s death in October 2023, his family discovered the discrepancies in the accounts and filed a lawsuit against cheng and luo [1][2]. Authorities arrested cheng and luo, charging them with fraud, forgery, and money laundering [1]. The taipei district court has detained luo, citing concerns about potential flight risk, evidence tampering, and collusion [2]. The court noted luo’s prior conviction for similar fraud offenses and the discrepancies between her statements and cheng’s [2].
market reaction and investor concerns
News of the fraud has raised concerns among investors regarding corporate governance within tai ya group [alert! ‘no direct mention of stock value or market reaction in source’]. The revelation of such a large sum being misappropriated could lead to increased scrutiny of the company’s financial oversight and internal controls [GPT]. Investors may be wary of potential instability and reassess their positions, which could exert downward pressure on the company’s stock [GPT]. Expert opinions suggest that companies must reinforce their risk management frameworks to prevent similar incidents [GPT].
background of the perpetrators
Cheng chun-chun, chairman of the hermit restaurant group, was previously an aide to shen yu-hsiung [1]. Luo pei-wen has a prior conviction for defrauding friends and family of nearly twd 30 million through a similar plane ticket scheme [1]. She met cheng after her release from prison [1]. The hermit restaurant group operates a popular bar and restaurant in taipei, emphasizing a relaxed atmosphere and quality service [1].