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Apr 17, 2016
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For every person who makes an honest living, there's a scumbag (or an entire group of them) trying to cheat him/her out of his/her meager earnings. We've seen it before, and we'll keep seeing it: headlines and crushing stories of people being enticed—then victimized—by investment scams. And they're in a growing club that absolutely no one wants to be part of. The Securities and Exchange Commission (SEC)'s Lalaine Monserate was quoted in the Philippine Daily Inquirer as saying that almost a million of our countrymen have fallen victim to them, with more than P25 billion lost.

They go by different names, but all pyramiding scams or Ponzi schemes play out the same way. Here's how the spiel goes: join them and their little "legit" business-that-could, and they'll make your money multiply at astounding rates within a short timeframe. No pressure, no long-term commitments, and you can leave anytime you want. But hey, while you're here, bring in everyone you know and we'll all get rich, like, right now!

At first, you won't suspect anything. You'll get paid regularly for a few cycles, the network of unwitting people in the scheme would get bigger, and the money pot becomes a whole lot sweeter. Eventually, when no more new investors come in, payments will stop, the whole pyramid structure falls, the mastermind(s) or operator(s) run off with the remaining funds, and everyone loses as much as millions that may or may not be recovered.

Steer clear of said scumbags, and do extensive research on both the company and the people you talk to (and who these people associate with) before investing in anything! The Securities and Exchange Commission (SEC) has published a handy Investment Scam Checklist, and its Investor Alert page provides additional information on all the nasty tricks of the trade. This government agency also issues advisories on reported and suspicious companies, so read up. It'll also do you good to talk to a registered financial planner to learn more about investments in general, the many types of investments, and whether something is legitimate or not.

While you do that, keep in mind the many pyramid scams that have already happened in the country. We're giving you only three for today, but there are a lot more in the history books—and yet more happening as you read this article.

Lastly, some things to remember: no one (not even the high-society, rich folk) is immune from scams; and if it's too good to be true, it is.

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The Aman Futures scam

The year was 2012. The company name to remember: Aman Futures Group. This pyramid scam used the “double your money” tagline (or even triple) to bring people (and their moolah) in, with most of the victims coming from Visayas and Mindanao—at least 15,000 people lost P12 billion to Manuel K. Amalilio, the Filipino-Malaysian founder of the Aman Futures Group, and his cohorts. An ABS-CBN report ups the total loss to P15 billion, with 105,000 families in Zamboanga del Sur alone losing their money to the scam.

Even at first glance, the investment terms are just too amazing to be true. According to Pinoy Money Talk:

"...one 'investment product' yielded 62% return in just 20 days while another 'investment' gave investors 70% interest in just one week."

Compare that to the usual single-digit annual rates or modest double-digit rates offered by banks, the stock market, bonds, etc. No wonder so many people put in their money.

Based on this timeline from Rappler, it took nine months for the whole operation to fail—January to September 2012, when Aman's Philippine office was closed. Manhunts were conducted, more than 8,000 cases were filed with the National Bureau of Investigation (NBI), and syndicated estafa complaints gradually made their way to the courts (including this one from 21 police officers and two fire officers vs. 62 respondents).

Arrests and investigations were made in both the Philippines and Malaysia. Amalilio was arrested in Sabah in 2013, but for possession of a fake Philippine passport. He was released by the Malaysian government the following year, and the Philippines is still seeking his repatriation. Amalilio's wife, Abigail Pendulas, was also charged with syndicated estafa and arrested in Pampanga in 2014. Aman Futures employees and brokers were investigated; and Pagadian mayor Samuel Co, his wife, and 10 other individuals have been charged as well with syndicated estafa.

The Emgoldex scam

Emgoldex is the most recent scamster on our list, having grabbed both headlines and money just last year. In this video from ABS-CBN's TV Patrol newscast, Emgoldex's gameplan is to attract investors online via its website and through social media. The spiel? Emgoldex sells gold bars, and you can get in on the action (and get "your own" gold bars) by putting in P36,500 of your savings and recruiting two or more of your friends. You stand to reap P180,000 up to P360,000 with your initial investment, with the promise of more cash if you continue to inject money into the cycle.

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And yes, Emgoldex had no SEC license, was based offshore, and was already banned in four countries by February. Dubious AF.

Like the Aman Futures scam, it took more than a year for Emgoldex to go from attracting unwitting people to legal authorities. The TV Patrol report was shown in February 2015, but Emgoldex was still able to change its name in July to Global Intergold and continue operations until the SEC filed a cease-and-desist order with the Department of Justice (DOJ) just last November 2015 for Emgoldex, Global Intergold, and Prosperous Infinite Philippines Holdings Corp.

Cases are now being filed alongside the government investigations, which includes this estafa case filed by two cops against Emgoldex executives. This case is also used by the SEC for their investigation, with GMA News Online quoting the Department of Justice for the relevant figures:

"They have also recruited at least 95 investors. An estimated P2,718,400.00 in cash investment has already been made by them with an estimated return loss of about P11 million..."

This is an ongoing case, so keep scanning newspapers and news websites for developments.


The Legacy Group scam

This scheme is older than Aman Futures and Emgoldex, with 2008-2009 as the years the bubble burst for Celso de los Angeles and his Legacy Group of Companies.

From investment products to gold, we move on to pre-need plans. Remember CAP and Pacific Plans (among other '00-era pre-need plan casualties)? This scam was hot on their heels—and notable for having people like former House Speaker Prospero Nograles as its victims, with a P18 million-P20 million investment.

This report from The Philippine Star in 2009 shows the basics of de los Angeles' plan:

"...buyers of Legacy Consolidated Plans Inc. could sell the plan to Legacy Card, another company he owned, with a promise that the money would be doubled after a certain period of time."

The problem? This is a no-no for pre-need firms. This offense, coupled with the fall of Legacy rural banks (whose deposits de los Angeles and other Legacy Group officials were alleged to have dipped into for personal use through bogus loan programs and ghost borrowers), led to the SEC and the Bangko Sentral ng Pilipinas (BSP) to file charges on February 2009 for estafa, and offering/selling unregistered securities.

By the time the Legacy Group filed for voluntary dissolution, it had P1.06 billion of claims it couldn't service. Worse, according to Atty. Mel Sta. Maria of InterAksyon.com, getting back the money of the pre-need clients is harder since "no such government entity can refund investments made by pre-need plan holders."

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De los Angeles died of throat cancer in 2012, but legal proceedings against other involved parties continue. There hasn't been much development in past years, but the most recent one we found from Inquirer.net was that the Supreme Court declared Legacy's P300-million trust fund as solely for Legacy planholders. Thing is, Legacy has a P1.1-billion liability. So... yeah.

 

GIFS via Imgur and Giphy

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