The Philippines seems never to run out of Ponzi scheme victims throughout the years, attributed to low education by the citizenry or the gullibility of the greedy.
In 2007, the NBI filed estafa cases against 27 officers and investors of FrancSwiss Investment on the Internet that allegedly deceived investors in the Philippines of R1 billion ($50 million).
In June 2008, charges were filed against Performance Investments Products Corp. (PIPC) officers and incorporators for violation of the Securities Regulation Code in cases involving $150 to $250 million.
Last year, it was Manuel Amalilio, now a fugitive in Malaysia, who allegedly duped some 15,000 Filipinos of P12 billion.
P.T.Barnum and Ponzi are two names that usually come to mind to indicate a fool parting with his money.
Barnum’s "There's a sucker born every minute" is the usual guidelines followed by Ponzi schemers.
Phineas Taylor Barnum was an American showman, businessman, scam artist, and entertainer, remembered for promoting celebrated hoaxes and for founding the circus that became the Ringling Bros. and Barnum & Bailey Circus.
Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi, commonly known as Charles Ponzi, was an Italian businessman in the US and Canada. He became known in North America in the 1920’s for his money making scheme, promising clients a 50 percent profit within 45 days, or 100 percent profit within 90 days buying discounted postal reply coupons in other countries and redeeming them at face value in the United States as a form of arbitrage.
The Ponzi scheme is not an original idea since historians said he was probably inspired by the scheme of William F. Miller, a Brooklyn bookkeeper who in 1899 used the same scheme to take in $1 million.
Despite years of being made aware by the media, and other sources of information, that a fast return on investment should be examined in fine details by investors, there’s never been a lack of gullible persons to entice to join the bandwagon.
Social scientists blame this on greed.
All levels of the social strata are victimized by Ponzi practitioners, from college professors, teachers, and salary men to common vendors.
A Ponzi scheme in a form of investment promising high a rate of return on their own money or the money paid by subsequent investors, which should already be a warning sign.
A typical pyramid scheme requires member to pay before joining and the only way for them to ever recover any money is to convince other people to join up and to part with their money as well.
The one thing common about these schemes is that you are told money would be made without any tangible product being created.
What are the warning signs that the offer being made is a scam?
When you are offered a high return, either as an individual or a group, but required to recruit new members to make money.
The scheme involves offers of goods or services of little or doubtful value that serve only to promote the scheme. Upfront money, in large amount, is required.
Alarm bells in your head should be ringing when you don’t receive payment or you are encouraged to “roll over” the promised payment, offering even higher returns.
Typically, Ponzi schemes are not registered with the Securities and Exchange Commission or government regulators.
Of course by the time that you realize this, you have already joined a network of fellow travelers who relied only on word of mouth, and therefore, are themselves victims.
Run away when you are told: “This is not a pyramid scheme” or “This is totally legal.”