Scums

The news this week has been teeming with reports of uncovered scams. Most recently, the NBI successfully shut down the “Visioner 2020 International Traders’ Ponzi scheme in Lanao del Sur, which had followed in the footsteps of the Aman Futures Group and Coco Rasuman’s Nad 21 scams offering supposed (double your money) investment opportunities. The NBI set up a “buy-bust” operation much faster and with less collateral damage than the previously mentioned Aman scam which duped some 15,000 investors of approximately P12 billion. However, the mastermind behind Aman — Manuel Amalilio — has since turned from scammer to scrammer, fleeing to Malaysia (which has no extradition treaty with the Philippines). Nevertheless, it is hoped that Malaysian authorities will cooperate with the Philippines to effect Amalilio’s capture and return to the country.

I am amazed and at the same time saddened by how people continue to be fooled by these get-rich-quick schemes despite all the media coverage. Plus the fact that we have access today to the veritable ocean of information known as the world wide web. There are websites such as consumerreports.org or scamadviser.com that can help verify the legitimacy of any enterprise.

But I realise that the situation is not simple. Not everyone has access to the pertinent information. Scams come in all shapes and sizes. For example, there is a fine line between a pyramid scheme and multi-level marketing (MLM). Aside from the fact that the latter is legal while the former is not, the distinction lies in the ultimate source of income. If money is made through the sale of products or services to those outside the plan then chances are you’re dealing with an MLM. If, however, money is made through the aggressive recruitment of members and payment of initial registration fees, then you’re probably dealing with a pyramid scheme. It has become harder to tell them apart as modern pyramid schemes have begun selling ostensibly legitimate products in order to appear trustworthy. When in doubt, though, it’s probably better to be safe than sorry. If it’s too good to be true, chances are that’s because it is.

Probably the most common form of pyramid scheme is the chain letter. Have you ever received an e-mail saying that someone who is travelling has been robbed and needs money to get home or that you can share in the proceeds of a bank account in Africa? The most resilient of such scams was the Make Money Fast (MMF) chain letter accredited to David Rhodes. All you had to do was forward one dollar to a list of people and add your name and address to the bottom of the list after deleting the name and address at the top. Theoretically, if the chain  keeps going, you could net several thousands of dollars. Needless to say, many people were defrauded and to this day, David Rhodes has not been found. He’s probably sipping piña coladas at a beach somewhere in the Bahamas.

Interestingly enough, Facebook games are another, albeit mostly harmless, form of pyramid scheme. The basic elements are all there in that many times the only way to progress is through the recruitment of your friends and family.

Finally, I read a news article making reference to Visioner 2020 as a “pyramiding scam” in one line and a “Ponzi scheme” in another. While these two scams are similar, they are not synonymous. A pyramiding scheme is a ‘non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than providing any real investment. This is different from a Ponzi scheme (attributed in the 1920s to Charles Ponzi) in two fundamental ways. First, a Ponzi scheme claims to rely on some form of esoteric investment approach while a pyramid scheme relies on new money invested by recruits. Also, the Ponzi “schemer” interacts directly with his victims unlike in a pyramid scheme where those who recruit additional participants benefit directly.

Ultimately, however, whether pyramid or Ponzi, the old adage remains true, “nothing in life comes for free”. Shortcuts and quick-fixes can prove counter productive. There’s nothing quite like working hard to build something you can call your own. And that’s the catch-22 of a pyramid scheme. If it fails, you’re robbed of your money. But if it succeeds, you lose the satisfaction of creating your legacy.

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Thanks for shopping: This past Thursday was Thanksgiving Day in the US, a holiday arguably now more revered by Americans than Christmas.  The “First Thanksgiving” was supposedly celebrated in 1621 by the pilgrim fathers at Plymouth, Massachusetts after their first harvest in the New World. It lasted three days and was participated in by 53 “new” immigrants and 90 “native” Americans. Coincidentally, there were also 90 alums who attended the Harvard Club Thanksgiving gathering with some looking like descendants of the pilgrims but most looking like the natives.

Thanksgiving became a holiday in 1863 when President Abraham Lincoln proclaimed a national day of “Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens.”  But the religion of commercialism and materialism has taken over the holiday as well so much so that the day after, “Black Friday” seems now to be the more anticipated event. 

Traditionally dubbed as the beginning of the Christmas shopping season (this is the reason why Thanksgiving parades usually end with a Santa Claus float, signalling that he is just around the corner), the major retailers open early (some now open even the eve before) and extend discounts “too good to be true” or provide” offers you cannot simply refuse.”

The term does not have Holy Week connotations. It originated in Philadelphia to describe the heavy and disruptive traffic which would happen on the day after Thanksgiving. However, it would seem that the more logical explanation is because of the strong sales, retailers start making a profit and therefore are financially “in the black.”

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Greetings: Birth anniversary best wishes to high school classmate and good friend Gabriel “Jay” Singson Jr.

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“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”    – Proverbs 13:11

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