Inside MBI: The Billion-Dollar Ponzi Scheme That Shook Malaysia

Fresh details have emerged in one of Southeast Asia‘s biggest financial scandals, as authorities continue their crackdown on the now-defunct MBI International. New arrests, asset seizures, and revelations from the scheme’s alleged mastermind have reignited public attention on the massive Ponzi operation that duped millions and funnelled billions into questionable ‘investment’ deals.

A major fraud case linked to MBI International is causing serious concern in one of Southeast Asias busiest property hubs. Authorities have arrested 17 people, including well-known real estate developers, and seized assets worth RM3.8 billion (US$897 million). The case involves an alleged Ponzi scheme that fooled millions of investors.

MBI International was founded by Tedy Teow Wooi Huat. The company promised high returns to investors, but instead used money from new investors to pay old ones. This kind of setup, known as a Ponzi scheme, collapsed when new money stopped coming in. The losses are estimated at over US$7.65 billion, with more than two million people affected.

Teow is now in custody abroad and has begun sharing information with investigators. His statements have helped Malaysian police launch a large-scale operation, codenamed Op Northern Star, to track down people involved and to recover stolen funds.

Authorities believe that a large portion of the money was moved into the property market. Some developers may have received this money in the form of suspicious loans. Investigators suspect these deals were made to hide the true source of the money. Several major property projects are now under review.

One of these is a planned development on reclaimed land near Pulau Jerejak, an island with a long history. Police believe funds linked to MBI may have been used to buy state land there. People involved in these deals are now being asked to show proof of how they paid for their projects.

Although the names of those arrested have not been made public, sources say several individuals with top national honours are under investigation. Many of the companies involved are linked to large developments in the region.

MBIs story began in 2009, shortly after Teow was convicted of a smaller scam involving a failed cafe business. MBI used a digital coin called M-Coin, which could be spent at stores and shopping malls run by the company. These places were once popular with tourists, especially from cruise ships. Today, the main mall, known as M Mall, is mostly empty.

The first signs of trouble appeared in 2017 when financial regulators raided MBI offices and froze some accounts. However, early actions were limited, and Teow stayed active in business for several more years. He was finally arrested in 2022 and later extradited.

Since then, he has provided useful information about how the scheme worked and who helped him. Police believe some of the money was also used to trade stocks, possibly to hide or grow the illegal funds.

The investigation is still ongoing, with more arrests expected. Police are focused on finding where the money went and who helped move it.