PAGADIAN CITY (Mindanao Examiner / Oct. 4, 2012) – An investment trading scheme thought by many as answers to their long time dream in becoming a millionaire is now on the brink of collapse after it failed to pay up hundreds, perhaps thousands of people who invested in what is believed to be a scam.
Investors said they have put so much money into the trade after its owners promised to pay them as much as 50% profit in just two weeks.
The investment trading began in February this year in Pagadian City in Zamboanga del Sur province and the people behind it operated without any government permits, not until June after news of its high-yield, high-profit spread like wildfire, attracting even street vendors and tricycle drivers to pour their hard-earned savings into an overseas stock and money trading.
During the first weeks of its operation, investors were paid at least 31% and profits increased to 50% in the succeeding weeks – luring not only ordinary citizens, but politicians as well. The amount of money invested in the company could run into tens of millions of pesos, or probably hundreds of millions.
“Oh, it was really a big business here. Many people became millionaires because their investments grew a hundred fold and more as long as they stay in the trading business and even politicians are raking a lot of money from their investments, mostly overseas,” said Rick Santiago in an interview, but he did not say whether he also invested money into the trade or not.
The Department of Trade said the people behind the investment trading were able to secure a permit for a business name and that succeeding permits carried various names of owners.
Maria Socorro Atay, the DTI provincial director, said she heard a lot of complaints from investors now, saying they failed to get back their money and profit from the company.
“We have warned the public about the scheme, but sad to say the greed for money is stronger than the reality that this business is another Ponzi scheme. We cannot do anything to help them unless they file a criminal complaint and the police can act on these problems,” she said during a news talk with the Mindanao Examiner Tele-Radyo.
Atay renewed her warning to the public to be careful in their business transactions, especially if it is high-risk such as money market or stock trading. “If it’s too good to be true, it ain’t true and it is a scam,” she said.
She said the Securities and Exchange Commission has issued a public warning about the Ponzi scheme, but many investors simply ignored this after being told by the company that they would be paid on time.
“Even commercial banks do not pay that much. Imagine a 50% percent profit in your capital in just a matter of two weeks. And all they give the investor is a piece of paper and written on it is the amount of their capital or investment. That is a scam. It’s a large-scale swindling, it’s syndicated estafa. We hope authorities would immediately act on this problem before the people behind it disappear,” she said.
The scheme is named after Charles Ponzi, who became notorious for using the technique in 1920. His operation took in so much money that it was the first to become known throughout the United States. Ponzi’s original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors’ money to make payments to earlier investors and himself.
It was also the same scheme that American stock broker and investment advisor Bernard Lawrence Madoff – who was arrested in December 2008 – used to lure thousands of clients to invest in his scam. As much as $65 million dollars were believed lost to Madoff’s scam.
The Criminal Investigation and Detection Group of the Philippine National Police have begun investigating the scam, and so are the Anti-Money Laundering Council and the National Bureau of Investigation.
Two investors are reported suffering from psychiatric problems now after failing to get their investments back from the company, whose executives are now in hiding. (Mindanao Examiner)
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