We dedicate this editorial to those who have been burned by the so-called “Ponzi-scam” deals and the next would-be-victims.
We will simplify the scheme so that everyone will understand and having understood, to beware. “Caveat emptor”- as the Latins would say. Ponzi scam is named after the Italian inventor of this fraud. In simple terms, this is to enthuse people with money to “invest” in the firm -for a number of fictitious reasons: commodity trading, treasure hunting, securities, palm oil, mining etc. High interest rates of from 30% to 80% in a short period of time ( two weeks to a few months) make the investor go loco with glee and loses all perspective. Greed has always been with man since the serpent tempted Adam and Eve to partake of the Apple and “be like God.” So there- is the market.
To pay the original victims, the scammers have to lure a next batch of victims just to pay the interest of the original victims. In the beginning, this is well and dandy and many people do get rich. But eventually, the bubble will burst. For instance, if the total investment is now P10 billion, the scammers will have to generate P2 billion in a few weeks just to pay, say, a 20% interest on the P10 billion.
Raising P2 billion is not easy- and that is when the whole Ponzi razmatazz collapses like a deck of cards.
Filipinos never learn and the Ponzi Game is getting bigger.
In 2009, the Legacy Bank-Pre Need Insurance defrauded thousands to the tune of P24 billion. The dirty evil genius behind the Legacy Scam, Celso de los Angeles, was always in media on wheelchair and/or in a hospital, and up to last year, was declared dead. The Evil Genius told depositors that the plan is risk-less because PDIC (Philippine Deposit Insurance Company) will pay all depositors of P500,000 deposits and below.
True enough, after the ashes were thrown, PDIC or the Filipino taxpayers paid the insured PDIC depositors P14 billion, and for the rest of the remaining P10 billion -others lost their shirts.
The assets of Legacy Group was only P 500-Million against a deposit liability of P 24-Billion.
Bankrupt as the soul of Shylock, you might say.
But Filipinos never learn.
This year 2012- three years after Legacy- depositors/investors in Pagadian and other Mindanao places and Cebu were again gypped of P12-Billion by a Malaysian-Filipino Evil Machine named Manuel Amarillo who at 32 is indeed “so young and so corrupt.” His company was named Aman Futures Group Philippines.
One other Ponzi scam (Rasuman Group) seemed focused in Cagayan de Oro (only) with a much smaller P 300-M pyramiding scam which eventually lost P 150-Million to the P 300-Million in the Aman Group Scam. Good riddance, you might say.
Victims of the Aman deal numbering 15,000 Filipinos are in a lynching mood while President Noy has asked the Interpol and the Malaysian embassy to help bring the wily Amarillo to the bar of justice in the Philippines. One Aman agent has been kidnapped and killed, two suicides reported, two houses of Aman relative burned and their offices ransacked. The Government has asked the victims “not to take the law into their own hands”.
The 15,000 victims are small and big time. Tricycle drivers, fish vendors to professionals, teachers, public officials, police, and small and big businessmen.
It is called a pyramiding scheme- because from a small tip base of investors- the scam grows geometrically with a very wide base below-who the ones who will be the ultimate victims. The fact that 8,000 of the 15,000 filed complaints gives enough reason that perhaps the other 7,000 who came ahead of the game had made their killing -and did not see the need to complain. They were able to get out fast enough. They now have big houses and fancy cars.