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IFW Global Investigating Plantation Management Scam

17 April, 2020

International fraud investigation and asset recovery agency, IFW Global, is investigating an Agarwood plantation management scam operating throughout Asia, Africa and the Middle East. IFW Global has received a number of complaints from investors about the company which alleges to guarantee a yearly return on investment of almost 20%. If the allegations are proven to be founded, the alleged corruption could represent hundreds of millions of dollars defrauded from investors across the world.

What is Agarwood and Why are People Investing In It?

Agarwood is a resinous timber that forms in the heartwood of aquilaria trees. The agarwood is dark, resinous and fragrant. Growth only occurs in aquilaria trees which have been infected with a mould called phialophora parasitica. This infection causes the heartwood to develop the agarwood timber. This agarwood timber is harvested and a perfume ingredient called oud oil is then distilled from the agarwood using steam. It’s this valuable oud oil which forms the basis of agarwood cultivation scams. 

How do Agarwood Plantation Management Schemes Work?

The scheme operator offers potential victims the opportunity to invest into a small part of a larger plantation, with the lure of receiving the same alleged high returns as the big plantation owners do, at a fraction of the costs.

The deal is offered as a fully managed investment, with above-average returns. Often this can be in the vicinity of at least a yearly return on investment of 20%. It’s alleged that the Agarwood trees will produce “oud oil” after seven years, which can be sold to the multi-billion dollar fragrance industry to make highly sought after perfumes. The company often alleges that all safety measures are in place to protect the investment for total peace of mind to the investor.

There is sometimes a clause in the agreement that stipulates that the scheme operator will replace any trees that are damaged through flood, drought, theft, fire, disease or other issues. The investor is sold a plot of land or a certain number of saplings and promised a lucrative return on their investment after seven years (or sooner if they purchased semi-mature trees).

IFW Global is investigating claims from investors that a prominent plantation management company that operates in this manner is taking investment capital from ‘investors’, lulling them into a false sense of security with flashy PR tactics but actually failing to pay out the promised returns or maintain the upkeep of dead or diseased trees.

A typical operating process for Agarwood investment schemes can work like this:

  • The potential victim will receive a cold call and be invited to attend a presentation at a Hotel with lunch included.
  • At this hotel lunch, the target will be wowed with a professional seeming presentation and be asked to sign a reservation form. Sometimes they are also asked for a deposit at this stage.
  • The ‘investor’ then makes a bank transfer for the full amount plus any applicable ‘admin fees’. Often this payment is made to a Singaporean bank account.
  • They will then sign paperwork and the contract will be processed.

History of Agarwood Investment Scams

The plantation management company under investigation is not the first group to have offered above-average returns for fixed-term investment in the so-called “Wood of God”. Thousands of innocent investors have already been fleeced of their savings from similar schemes around the world.

In 2013, investors in failed plantation scheme Tropical Forestry Venture, called foul after their investments of up to $60,000 per investor were lost as the company folded. The scheme promised investors a return of three to seven times their investment once their trees reached maturity. These payments failed to come to fruition.

In 2016, The Straits Times published an article raising questions about Singaporean firm One Plantation Capital (OPC). Over 400 people invested a total of $9.5 million with OPC, even as burned investors in the Tropical Forestry Venture scheme were filing police reports about a similar operation.

Timber plantation management schemes have also had disastrous results in Australia where agri-business operators Timbercorp and Great Southern collapsed with a combined investment book of $1 billion. These failures led to hundreds of people losing their life savings and facing eviction from their homes as banks foreclosed on mortgages.

What To Do If You’ve Been Affected By A Tree Scam

If you believe you may have become caught up in a fraudulent plantation management scheme please contact IFW Global today to discuss your experiences.

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