SINGAPORE – Two former directors who pocketed a total of more than $1.2 million in their firm’s Ponzi scheme were each sentenced to three years and 10 months’ jail on Monday.

At the time of the offences between December 2009 and October 2010, Singaporean Iseli Rudolf James Maitland, now 63, and Malaysian How Soo Feng, now 48, were directors of The Gold Label (TGL), which sold gold to more than 2,000 customers.

The company had promised its customers a return on their investments and high payouts.

TGL, which has since wound up, took in more than $120 million under a so-called “buyback” scheme.

The scheme, however, was not backed by any real investments. Instead, the company depended on the money from new gold sales to satisfy the payment obligations to its older customers, the court heard.

Following a trial, the pair were each convicted on Sept 1 of carrying on a fraudulent business, an offence under the Companies Act.

Maitland and How were directors and shareholders of TGL from July 7, 2009, to Nov 15, 2010. It was not stated how much money they pocketed individually.

In January this year, a third former director, Wong Kwan Sing, 50, was sentenced to two years and 10 months’ jail after pleading guilty to an offence under the Act.

The Straits Times reported in January that Wong, a Malaysian, who is also known as “Gary”, pocketed at least $598,000 from the scheme.

TGL sold gold bars to its customers at a premium of more than 20 per cent above prevailing gold market prices in contracts lasting three or six months, the police said in a statement on Monday.

In exchange, the customers were promised guaranteed returns as high as 24 per cent per annum.

The police said that at the end of the contract period, customers had the option to sell the gold bars back to TGL at the same price that they were bought.

“This effectively allowed the customers to recoup their initial investment amount in full, while still making guaranteed returns, creating a semblance of a risk-free investment with attractive returns,” said the police.