Modern Illegal Investment Schemes: An Assessment of its Combating Regime in Malaysia

Norazida Mohamed1, Nasir Sultan2, Aurovindan Rajamanickam3 & Waseem Subhani4

Abstract
Illegal investment schemes have been a long-standing problem in Malaysia. According to the most current National Risk Assessment conducted by Bank Negara Malaysia, fraud is the most widespread, with the most considerable losses recorded. Despite repeated efforts to crack down on the operation of unlawful investment schemes, the reported cases showed a growing trend with total losses year on year. This research is conducted to gain insight into Malaysia’s current trend of illegal investment schemes and modus operandi adopted by the Malaysian Government to combat them. Malaysia’s regulatory structure was also examined, including relevant laws, regulations, enforcement measures, and prevention and mitigation efforts. This research found that illegal investment schemes are highly complex and aided by technology, mainly social media and instant messaging apps. Further, the past Covid-19 outbreak has exacerbated illegal investment activities. Mule accounts, cryptocurrency, and e-wallets played significant roles in illegally obtained money’s movement. This research also made recommendations to prevent the continuation of illegal investment schemes.

Keywords: Illegal investment, fraud, control JEL: K2, G28