California Wow Allegedly Siphoned Bt1.6 Billion Overseas

[TallGuyJohninBKK]

The Thai police could redeem themselves to some extent by tracing where the money went, taking it back with a court order, and refunding it to the people who lost money. Oh sorry, just woke up from a dream..

I don't think international money transfer investigations are handled by regular police officers. I would think that this would be a federal policing agency's job.

Does Thailand have a Federal Policing Agency? The other thing I am wondering is how did they manage to transfer that amount out of the country, even when I try to transfer 100K the banks don't like it.

Because presumably you're not a crook.... but instead, just an ordinary folk.

If you were a BIG crook, everything would have sailed out smooth as silk.

[TallGuyJohninBKK]

They had much more then 1000 members in Thailand affected. Please get your facts right!

They state that were MORE than 1,000 members - perhaps they should have said INFINITELY more to save you the bother of posting and me the bother of pointing this out. Do you know how much time you have wasted (of mine, yours, and people reading two unneccesary posts)??

At least in their heyday, I would imagine "more than 1,000 members" would have been a GROSS understatement of California Fitness' population of paid "lifetime" members across the country.

[tonyboy33]

The largest Thai Shareholder is Mr Nathapol Jurangkool (12%) aged 26 who's father started Summit Car Parts Group.

Hmmm. Wonder if they know anything about importing luxury European cars?

[vijer]

And just why is the money laundering agency investigating this and reporting it in the media? Hardly an uncommon fact that companies move capital around to suit their needs. Nothing illegal in that. Just goes to show the power of governments these days. Private banking records scrutinized and the findings splashed in the news. Sounds like something that would happen in the US.

So a company goes bankrupt but had 1.6 BILLION that they could have used to pay creditors yet you want to criticize the government. I hope you get screwed someday and everybody will just say see how terrible the government is.

[smedly]

Makes you wonder what were the auditors doing?

there is not really anything new in this behaviour, many directors/officers of companies floated on the market pay themselves huge salaries... [etc]

You're missing the point - whatever goes on needs to be transparent to shareholders and it's the auditor's job to ensure that the accounts present an accurate picture. For this they are paid a handsome fee and are themselves liable for signing off on dodgy annual reports. It's quite difficult for money to walk out of a company without creating a blotch on the balance sheet.

and have you checked the companies finances that they submit every year to the SE and shareholders - you will find that it was all above board and plain to see - they gave themselves huge salaries and in fact is all above board and plain to see, which is exactly my point, stupid is what stupid does - shareholders and customers without doing their research - and a life time member is almost like a shareholder - you will find this case will stall - unless they provided false accounts or broke SE rules

[Minnehaha]

It was formed in 2003 as a JV between Fitness Holdings Inc 51% (Now called Elite Holdings) and Major Cineplex 49% owned by the Poolvaraluck Family. The Company was listed on the stock exchange as CAWOW. It made a profit in the first year of trading after that I believe that it made substantial losses, however ordinary shareholders continued to buy CAWOW stocks whilst Major dumped all their shares that they had in CAWOW and the ordinary investors lost their shirts. The Americans headed up by Howard David Levine are still the major shareholders in CAWOW. The largest Thai Shareholder is Mr Nathapol Jurangkool (12%) aged 26 who's father started Summit Car Parts Group.

Thanks for the informative post.

I met Eric Levine several times - was not impressed. I believe he was the one with the "idea" or connections for CAWOW.

I listened to the Ca Wow sales pitch one time and couldnt get out of there fast enough but not before they got my mobile number from the app. My instinct was right. They kept calling me. I finally went to the manager and (politely) demanded to see they remove my phone number from the list, before I would walk out of her office. The calls stopped.

I believe they had some kind of partnership with Fitness 24 or whatever it is called - its a big one, very popular in California, open 24 hours. And they have relationships with others around the world, so if you travel to Thailand you can use CAWOW.

How can a company that is operating at a loss be SWIFT ing millions of $ overseas, unless it is fees or some kind of expense. The auditors should catch this, or at least report it and the SET should catch it.

Selling lifetime memberships is not necessarily a failing business model. I dont know the math but it is something like this: 100 people buy a gym membership, over the next month 80 use the gym couple times a week. After the second month 65 use it a few times a week. After 6 month 50% use it a few times a week. After a while... only about 25% will use the gym regularly. Some never use it. Also, I know more than a few people who have memberships at 3 or 4 gyms - these are dedicated fitness freaks. But even then, they wind up using one or the other gym, while the other memberships sit idle.

I am not convinced the lifetime membership was the downfall. I think it was poor management, high rents, fees sent overseas, and so on.

[Minnehaha]

When are they going to sell the equipment?

There are millions of baht in assets collecting dust in these places...

My condo would buy some.

They could recoup lots of money.

[unanimosity]

It was formed in 2003 as a JV between Fitness Holdings Inc 51% (Now called Elite Holdings) and Major Cineplex 49% owned by the Poolvaraluck Family. The Company was listed on the stock exchange as CAWOW. It made a profit in the first year of trading after that I believe that it made substantial losses, however ordinary shareholders continued to buy CAWOW stocks whilst Major dumped all their shares that they had in CAWOW and the ordinary investors lost their shirts. The Americans headed up by Howard David Levine are still the major shareholders in CAWOW. The largest Thai Shareholder is Mr Nathapol Jurangkool (12%) aged 26 who's father started Summit Car Parts Group.

Thanks for the informative post.

I met Eric Levine several times - was not impressed. I believe he was the one with the "idea" or connections for CAWOW.

I listened to the Ca Wow sales pitch one time and couldnt get out of there fast enough but not before they got my mobile number from the app. My instinct was right. They kept calling me. I finally went to the manager and (politely) demanded to see they remove my phone number from the list, before I would walk out of her office. The calls stopped.

I believe they had some kind of partnership with Fitness 24 or whatever it is called - its a big one, very popular in California, open 24 hours. And they have relationships with others around the world, so if you travel to Thailand you can use CAWOW.

How can a company that is operating at a loss be SWIFT ing millions of $ overseas, unless it is fees or some kind of expense. The auditors should catch this, or at least report it and the SET should catch it.

Selling lifetime memberships is not necessarily a failing business model. I dont know the math but it is something like this: 100 people buy a gym membership, over the next month 80 use the gym couple times a week. After the second month 65 use it a few times a week. After 6 month 50% use it a few times a week. After a while... only about 25% will use the gym regularly. Some never use it. Also, I know more than a few people who have memberships at 3 or 4 gyms - these are dedicated fitness freaks. But even then, they wind up using one or the other gym, while the other memberships sit idle.

I am not convinced the lifetime membership was the downfall. I think it was poor management, high rents, fees sent overseas, and so on.

Uh, duh, swifting money overseas is the cause of their loss?

[Bagwan]

Makes you wonder what were the auditors doing?

Collecting brown envelopes?

[unanimosity]

They had much more then 1000 members in Thailand affected. Please get your facts right!

They state that were MORE than 1,000 members - perhaps they should have said INFINITELY more to save you the bother of posting and me the bother of pointing this out. Do you know how much time you have wasted (of mine, yours, and people reading two unneccesary posts)??

At least in their heyday, I would imagine "more than 1,000 members" would have been a GROSS understatement of California Fitness' population of paid "lifetime" members across the country.

When asking a rep about membership at one location alone the rep stated there were 1400 members and she estimated the total membership of the chain at around 14,000 so could the OP be a dropped digit or a typo?

[SICHONSTEVE]

They had much more then 1000 members in Thailand affected. Please get your facts right!

They state that were MORE than 1,000 members - perhaps they should have said INFINITELY more to save you the bother of posting and me the bother of pointing this out. Do you know how much time you have wasted (of mine, yours, and people reading two unneccesary posts)??

To be fair if it's the goal of the article to give the reader an accurate guide as to the actual number (obviously it is), and the number is much more than 1000, then it is a case of poor reporting.

"more than 1" would be accurate too, but pretty useless.

Maybe, but factually they were correct and they didn't get their facts wrong!!

[hellodolly]

1,600 Million baht.... US$52 Million.

Nice bit of change.

How anyone couldn't foresee this when they were handing out 'lifetime' memberships for a few K baht I don't know.

Well, except for the amount involved.

Isn't it odd the names and addresses of those involved aren't printed in the Thai press.

Indeed it is. They will print photos of killers and thief's why not swindlers?

Of course there are always pictures in the paper of swindlers but they call them Government members.

[technologybytes]

It's amazing now to note how many people claim that they knew it was too good to be true and that it was a scam all along!

Is it not at least possible that it was not a scam but just a badly managed business that failed?

The fact that money was sent overseas is hardly an issue, it's entirely possible that it was repayment of part of the start up capitol.

If one of the investors (or a group of investors) put up 1.6 billion baht in start up capitol it would be quite proper of them to recover that even if the business was losing money, that's not a crime or even ethically questionable. I'm not saying that is what happened, I'm just saying its a possibility.

[hellodolly]

The Thai police could redeem themselves to some extent by tracing where the money went, taking it back with a court order, and refunding it to the people who lost money. Oh sorry, just woke up from a dream..

I don't think international money transfer investigations are handled by regular police officers. I would think that this would be a federal policing agency's job.

So what you are saying is if EyesWideOpen is wrong nothing will happen.

Sounds about rite to me.

[Bagwan]

Re lifetime memberships.

How many more times do people have to read "If something looks too good to be true it usually is" on boards such as this?

BTW what is the latest on Tony selling up? Is a double whammy on the cards?

[tragickingdom]

But sending money overseas is not forbidden. I assume that the company is a Franchise, so it is not that strange that they pay overseas. It is a bit hard for Thais to understand that there is not always money flowing in but just as often flowing out in corporation. The fact that they transferred maximum 15 million dollar overseas do not make them fraudulent.

[Sydebolle]

nice going yet impossible without a local fat cat or cats, for that reason

[jpduggan]

I've been wondering if other gyms offering lifetime membership are not going to go the same way???

[Thai at Heart]

1000 odd lodged a case against them

How did the banks lend so much? They didn't own the properties did they? All rented?

[MrVain]

So what?

[chuenyongman]

So, where did the money go?

To someone with big pockets.

So, where did the money go?

[Thai at Heart]

Note, it didn't say illegally sent out.

There is no way an auditor should miss this.

[Evolare]

Thats what I suspected...something was not right. As everytime I went they where selling new memberships.

And they had many customers for pt and people paying for extras but sure lifetime memberships was a bit of a svam at least I got 4 years out of my membership. Wouldnt mind getting my money back...

[Searat7]

I was told by a California manager that 90% of their members had lifetime memberships. I would like to point out that they stopped selling these about 2 years before the Paragon location closed.

I paid 14,500 for a lifetime membership and before that I was paying 1,600 a month so the payback period was only 9 months. I feel that lifetime members made out ok financially and that the big losers are the minority shareholders, recent members who prepaid their membership, creditors and especially the banks. Every time a new club was opened it was with 100% borrowed money. I have to wonder why they banks kept extending credit when they were losing so much money. When California was still operating their financial statements were posted on their website.

[bigbamboo]

But sending money overseas is not forbidden. I assume that the company is a Franchise, so it is not that strange that they pay overseas. It is a bit hard for Thais to understand that there is not always money flowing in but just as often flowing out in corporation. The fact that they transferred maximum 15 million dollar overseas do not make them fraudulent.

Swindling your paid up members does though.

[Evolare]

But sending money overseas is not forbidden. I assume that the company is a Franchise, so it is not that strange that they pay overseas. It is a bit hard for Thais to understand that there is not always money flowing in but just as often flowing out in corporation. The fact that they transferred maximum 15 million dollar overseas do not make them fraudulent.

Well to begin with this was a thai company on the thai stockexchange and its closer to 57 million dollar unless you think 1 dollar closer to 100 baht. And it is actually considered fraud as it wasnt declared publicly if it was count on complaints...but I doubt anyone of us will ever get anything back as old members...

Edited June 8, 2013 by Evolare

[OZEMADE]

So how is Tony's lifetime membership going, I remember reading that he was having troubles around Pattaya with his Gym's. Also a few Russians working at the doors?

[ricklev]

I bet that when the dust settles it will turn out nobody did anything illegal. Everybody involved had good lawyers who know Thai corporate law. I doubt anybody out and out embezzled or stole 1.6 billion baht. They just did what was allowed under the law. Of course I could be wrong,

[harrycallahan]

Makes you wonder what were the auditors doing?

there is not really anything new in this behaviour, many directors/officers of companies floated on the market pay themselves huge salaries... [etc]

You're missing the point - whatever goes on needs to be transparent to shareholders and it's the auditor's job to ensure that the accounts present an accurate picture. For this they are paid a handsome fee and are themselves liable for signing off on dodgy annual reports. It's quite difficult for money to walk out of a company without creating a blotch on the balance sheet.

and have you checked the companies finances that they submit every year to the SE and shareholders - you will find that it was all above board and plain to see - they gave themselves huge salaries and in fact is all above board and plain to see, which is exactly my point, stupid is what stupid does - shareholders and customers without doing their research - and a life time member is almost like a shareholder - you will find this case will stall - unless they provided false accounts or broke SE rules

Well I just did my own back-of-the-envelope audit and found irregularities, I guess that's why the anti-money laundering peeps are onto it.

[Evolare]

I bet that when the dust settles it will turn out nobody did anything illegal. Everybody involved had good lawyers who know Thai corporate law. I doubt anybody out and out embezzled or stole 1.6 billion baht. They just did what was allowed under the law. Of course I could be wrong,

I think your right, another interesting thing is that

Some people thai and farang of whom i know one, wanted to take over the bulk of california wow and the facilities but was stonewalled because of this investigation etc. Their approach was really good but too clever for thai traditional banks (Bangkokbank) and others involved...as central wanted them to pay 100% of accumulated debt of what california wow owed...one good example...now they got nothing instead...and all members myself included got squat...thats at least one thing I can do at home without paying anyone