Why did the Federal Court overturn previous rulings on the forfeited funds?

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Federal Court Overturns Lower Courts' Decisions on Forfeiture of RM1,112,700 from Illegal Deposit Scheme Investors

The Federal Court overturned previous rulings by the Court of Appeal and High Court, ordering the forfeiture of RM1,112,700 to government revenue. This decision stemmed from the prosecution's successful appeal, which argued that the funds seized from investors in Venus FX's illegal deposit-taking scheme were derived from illegal activity and that the investors could not claim a legitimate legal interest. The prosecution contended that the lower courts erred by considering the investors as victims of fraud, as evidence suggested they willingly participated in the scheme expecting returns.
Prosecution's Appeal Contended Funds Were Tainted by Illegality

The prosecution appealed the High Court and Court of Appeal decisions, asserting that the RM1,112,700 seized from the Yayasan Usaha Ventures Malaysia (YUVM) bank account was proceeds from an illegal activity. Deputy Public Prosecutor How May Ling argued that deposits made by third parties into such an account were therefore tainted with illegality. This meant, according to the prosecution, that the respondents, representing 79 investors, could not legitimately claim a legal interest in the funds.
Investors' Voluntary Participation Challenged Victim Status

A key argument presented by the prosecution was that the 79 investors willingly deposited money into the YUVM bank account, anticipating returns from their investment in Venus FX. This voluntary participation, the prosecution argued, contradicted the lower courts' determination that the investors were victims of fraud. The prosecution's stance was that the evidence indicated a willing involvement in the scheme rather than being coerced or deceived into parting with their funds.
Lower Courts Erred in Law, Federal Court Found Merit in Appeal

The Federal Court, in its decision delivered by Chief Justice Tun Tengku Maimun Tuan Mat, found merit in the prosecution's appeal. The court concluded that the Court of Appeal and High Court had erred in law by focusing on the investors as victims of fraud. Instead, the Federal Court's view was that the nature of the deposits and the scheme itself rendered the funds illegitimately claimable by the investors, leading to the order for forfeiture to the government.
Venus FX Scheme Involved Promises of High Daily Returns

Venus FX operated a trading platform specialising in foreign exchange, promising investors daily returns ranging from 4 to 6 per cent over 80 days for deposits between USD100 and USD10,000. Members were also incentivised with commissions for recruiting new members. The scheme later instructed members to deposit funds into the YUVM bank account, which was falsely presented as an authorised foundation and the parent company of Venus FX.

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Why did the Federal Court overturn previous rulings on the forfeited funds?

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