People never learn. They’re so willing to defy common sense in the hopes of making a quick buck. The latest calamity to hit many Filipinos is a pyramid scheme that has cost them billions of pesos.
In Pagadian City in southern Philippines, a Ponzi-style scam has hit all kinds of people. Ordinary market vendors, tricycle drivers, teachers, government workers, policemen and firemen, as well as rich people have succumbed to the lure of quick and substantial payoffs. They put their life’s savings into an age-old fraud that never loses its magnetic pull. Now, these people are desperate, making them suicidal enough to kill either themselves or those who took them for a ride, along with their hard-earned money.
The scheme came fast like the typhoons that ravage this country with regular impunity. In less than a year, thousands of folk lost their shirts, and now even their minds. They’re imploring the government, or the gods, to help bring back the money they lost.
They can’t bring back the fraudsters who gypped them. The owner of the company, called Aman Futures, that took in the hundreds of investors has allegedly fled to Kota Kinabalu in Malaysia, himself said to be half-Malaysian. In a video message to investors, he promised to give the investors’ money back.
The investors shouldn’t hold their breath expecting refunds. I doubt that the fooled people will ever get any cent back.
Ponzi schemes are, of course, as old as circus impresario P.T. Barnum’s dictum: “A sucker is born every day.” People are willing to suspend disbelief the moment they smell a quick profit without any sweat off their brow. The scam artists in Pagadian City were promising up to 50 percent, even double-your-money, returns in one month on their investments.
As Ponzis work, the early investors did get the handsome returns on their money. This worked for as long as new investors poured in their own investments. Like a simple sleight-of-the-hand game in rural fairs, the scheme works by paying Peter money from John. As long as new Johns came along, there was money to pay Peter. But a town or a city only has so many people with money to invest. Once the well dries up, there is no more money to pay Peter. That’s when the “caviar” hits the fan.
Caviar is all over Pagadian and, it’s further reported, one or two other cities that had opened similar illegal operations. The National Bureau of Investigation (the Philippines’ FBI) has been sent there to probe the matter.
But what can the NBI really do? The government may be able to get Malaysia to extradite the chief Ponzi guy (although the Philippines and Malaysia have no extradition treaty) and send him to jail, along with his cohort. But what about the people who lost their life’s savings and who are now losing their minds, worrying about how now to send their children to school, how to pay the new SUV they had put a down-payment on, and how to keep up with the mortgage? Their money may be forever lost.
Ah people, gullible are thy middle name. Barnum is laughing in his grave.
Pyramid scams are not new in the Philippines. Every five years or so, news breaks out about syndicates being exposed. I had a cousin who had a long career at an international bank here in Manila and who made a six-figure investment into such a scheme years ago. Pretty soon he and his money got permanently separated, victimized by clever, sweet-talking Ponzi peddlers. “How could you, a seasoned banker, fall for that sort of thing?” I asked him incredulously. All he could say was “Oo nga eh,” (Yes, I know), topped with a sheepish half-smile.
If someone who had worked in a bank and one who knows the return on conventional investments is 3 percent, 5 percent tops, is willing to fool himself and believe that his money can earn 30 or 50 percent in no time, it’s easy to believe that common folk would be too willing to believe, too.
The lure of getting rich quick is so strong and seductive. Especially if they see that the guys who plunged in ahead of them were getting the promised returns on their money. And then, before they could even spell “Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi,” all their money is gone, like smoke in thin air. (An immigrant from Italy, Ponzi invented the pyramid scam in the United States in the 1920s.)
Some of the current victims here are no fools or stupid. Crusty businessmen, high government officials, seasoned gamblers and pillars of their communities went for it. These guys, resilient as they are and used to the cruel vicissitudes of real life, can probably bounce back and move on, hopefully to not fall for the same hoax again in their lives.
But what about the poor soul who drives a tricycle or jeepney for a living, the sweaty guy who hauls tubs of fish or fresh meat at the town’s wet market, or the public-school teacher whose honest daily toll pays her peanuts? How will they move on as their richer co-victims will be able to move on?
A lot of lives have been ruined at the hands of clever crooks that prey on gullible people whose only desire was to better their lives and those of their children. It will take a long time before they can move on. Or recover their sanity.
But is it just gullibility, the readiness to believe, that led these people to their ruin? One could use the word “greed” and it would be apt. But I won’t because that would be hurtful to those who are already hurting. It would be adding insult to grave injury. Let’s just say, then, that it’s a lack of common sense to plop down tens or hundreds of thousands and, in some cases, millions, in an investment scheme that didn’t make any sense at all. It was simply too good to be true. But the victims chose to part with their senses and closed their eyes to certain ruin and disaster.
To Fil-Am readers who ought to know better and who still have recent memories of Bernie Madoff, it’s not too late to advise your relatives here to be wary of get-rich-quick scams. It’s too late for this particular fraud but, again as Barnum so astutely said, suckers are born every day. People have short memories and, worse, they believe even when the odds are too long.
Send your relatives a message, get on the phone to them and warn them. Tell them to make the following motto their own: Caveat emptor! If it’s too good to be true, then it’s probably not true.
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