MANILA, Philippines – Scammers continue to give the classic Ponzi scheme new creative twists, transcending industries, and offering elaborate strategies, based on the recent advisories of the Securities and Exchange Commission (SEC).

Since the start of June, the SEC warned the public not to invest in nine companies, which all used the Ponzi scheme but added their own creative twist on the classic scam.

Anatomy of a Ponzi scheme

A Ponzi scheme is a type of investment scam where returns are paid to earlier investors using the capital of newer investors, rather than from profit earned by the operation of a legitimate business. 

Named after Charles Ponzi, an Italian swindler who orchestrated such a scheme in the early 20th century, the scam relies on a continuous influx of new investors to provide returns to the existing ones.

Scams may vary by industry or promised returns, but the elements of a Ponzi scheme remain mostly unchanged. These are:

• High returns with little risk
• Overly consistent returns
• Unregistered investments
• Secretive or complex strategies

Ponzi schemes succeed through word of mouth, but all end in collapse once members can no longer recruit new people or a bulk of members attempt to cash out. 

The SEC regularly issues these warnings. Here are some of the companies mentioned in the advisories issued in June and their red flags:

Tradetech Asia

The SEC said Tradetech Asia enticed people to invest amounts ranging from P300 to P50,000 and promised a 300% return or P900 up to P150,000 in just 24 days.

Investors also earn more through an “affiliate program,” which involves various levels which correspond to the percentage of additional earnings. These levels correspond to interest income ranging from 1% to 15%.

The SEC said these investment contracts use a Ponzi scheme, which is “fraudulent and unsustainable and not a registrable security.”

Automatrade Robots Trading

The SEC warned that Automatrade Robots Trading promised returns of 50% and even 100% in just over a week.

The company is not registered with the SEC and uses a Ponzi scheme, where money from new investors are used in paying “fake profits” to prior investors designed to favor top recruiters and prior risk takers. 

The SEC warned that Ponzi schemes are “detrimental to subsequent members in case of scarcity of new investors.”

Beef Exfresh (Kambal Pares)

This company targets those who have the cash, as it offers food franchise packages amounting to P350,000 and guarantees 3% to 5% return of investment with payouts every month.

The SEC said this scheme resembles an investment contract. Investors also need not to exert any effort other than to put money in the scheme to take profit.

The SEC said that the company “is found to be engaged in investment-taking activities in the Philippines which are not authorized by the Commission.”

“Hence, the public is strongly advised NOT TO INVEST or STOP INVESTING in any scheme offered by BEEF EXFRESH (KAMBAL PARES) or such other entities similarly engaged in investment contracts without prior registration from the Commission,” SEC said.

Azarcon Ventures

This scheme involves a certain Madilyn Azarcon, an active social media influencer, who offers various compensation plans. 

For the Bronze compensation plan, the minimum investment is P300 with a daily payout of P42 or P420 in 10 days (under a 10-day trading cycle). The maximum investment is P3,000 with a daily payout of P420 or P4,200 under a  10-day  cycle.

For the  Silver  compensation  plan, the minimum investment is P2,000 with a guaranteed return of P3,680 under a 14-day  trading  cycle.  The  maximum investment would  be  P20,000 with a guaranteed profit of P36,800 under a 14-day trading cycle.

Investors also receive a referral commission ranging from 3% to 5%, depending on the compensation plan.

“Based  on  the  Commission’s  database, AZARCON VENTURES is NOT REGISTERED as a corporation or  partnership and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR  AUTHORITY to  solicit,  accept  or take investments/placements  from  the  public  nor  to  issue  investment  contracts  and  other forms of securities defined under Section 3 of the Securities Regulation Code (SRC),” the SEC said.

BFO Trading

This company claims that they use “computing methods” to study currency fluctuations to earn profits.

BFO Trading uses a complex daily income chart, which varies by amount of investment and daily payout.

The lowest investment, which is P500, would earn around P20 in one day. This scheme promises up to P17,060 income.

The highest investment involves an individual investing P20,000, with minimum returns of P800 and as high as P682,387.

BFO Trading is not registered with the SEC.

Jump Mining

The SEC has ordered Jump Mining, as well as similar companies named Jump Mining trade Platform, and Jumping International Group, to stop soliciting investments from the public.

The companies promised returns ranging 4% to 10% with maturities of 20 to 60 days. 

Just like any Ponzi scheme, the companies pay investors using fake profits from new recruits.

JET Enterprise

A certain Jose Elvin Torres operating Jet Enterprise promises 30% up to 105% returns in under a month. Investors also earn through referrals.

The SEC said Jet Enterprise is not registered with the Commission and is not authorized to sell investment products.

Pink Closet PH

The supposed clothing brand company invites the public to become a business partner by depositing a certain amount and “let their money work for them,” promising stable passive income.

The SEC urged the public not to invest in the company due to the Ponzi-like scheme and lack of registration documents.

New World AI

This company offers returns as high as 1,185% in interest income through complex price structures, packages, and “VIP” programs.

Those who will invest P150,000 are promised returns amounting to over P1.7 million.

Like those on this list, New World AI is not a registered corporation and lacks documents to solicit investments.

“Investment schemes offering high returns with seemingly low risks should be carefully scrutinized. Investors are encouraged to perform due diligence, validate the legitimacy of investment opportunities, and review the associated terms and conditions,” the SEC said. – Rappler.com