Hishamuddin Hashim alleged that 30 people had lost more than RM600,000 to a kootu fund known as the Saving Extra Sapiza fund.
He alleged that a woman known as “Sapiza” is believed to have been behind the scheme, in which victims had been cheated of tens of millions of ringgit.
He said his group, the Malaysian International Humanitarian Organisation, had received 60 complaints from victims who included civil servants, professionals and housewives, with their losses ranging from RM7,000 to RM200,000.
One of the victims, a graphic designer, said that he joined the scheme to help finance the medical treatment of his child, who is suffering from spina bifida, but ended up losing over RM70,000, Bernama reported.
Hishamuddin said masterminds of kootu funds should be investigated under the Penal Code for cheating, which provides for a maximum of 10 years’ jail, whipping and a fine if found guilty.
“My concern is that usually in cases like this, they are investigated and charged under the Kootu Funds (Prohibition) Act, which provides for a maximum fine of RM500,000,” he said, according to Bernama.
“Based on the trend of punishment handed down by the courts, most cases only ended with a fine. While the main masterminds have made a profit of millions of ringgit, the victims have suffered a loss with a much larger figure.
“Hence, the investigation should be carried out under Section 420 of the Penal Code, under which they can be jailed.”
A kootu fund is a scheme for pooled savings from a group of people who make contributions every week or every month, with each member making a bid to collect the pool after the leader has collected the first pool.
Kootu funds are illegal under the Kootu Funds (Prohibition) Act.
The Saving Extra Sapiza kootu fund, which has been active since 2015, offers ‘extra’ returns of up to 60% to each player, with three different payment plans, starting from RM250.
Former inspector-general of police Musa Hassan, who heads the Malaysia Community Crime Care organisation, said banks should identify any suspicious transaction and report it to Bank Negara Malaysia.
“There is a need for cooperation (in the investigation) between all agencies so that they can carry out their duties properly and take decisive action. Besides the victims, the country is also affected because they (perpetrators) do not pay income tax,” he said.