What you must know about the Emgoldex pyramiding 'scam'

from a report by Zen Hernandez, ABS-CBN News

Posted at Feb 17 2015 09:17 PM | Updated as of Feb 18 2015 06:38 AM

Emgoldex banned in US, 4 other countries

MANILA - People who illegally sell securities or financial products without registration in the Philippines face a P5-million fine and a 21-year prison term, the Securities and Exchange Commission (SEC) warned Tuesday.

This, amid the furor regarding the Emgoldex pyramiding scheme that promises to make anyone rich.

Emgoldex recruiters claim that an investment of P1,000 will yield P5,000 to P10,000, while an investment of P35,000 can turn into P180,000 to P360,000.

Investors are also urged to recruit at least two more people into the scheme.

The SEC said this is clearly a pyramiding scheme that can collapse at any time.

Emgoldex is also not a registered corporation or partnership in the Philippines, and is not legally allowed to collect investments from the public.

"Ito po sa pyramiding kung susuriin investment style, nire-require mag-recruit tapos may bonus," said SEC spokesman Atty. Gerard Lukban. "Kung sa pag-recruit ang payout kinukuha sa baba pag nag-collapse mawawalan ng kita."

Lukban said the law requires any business to register in the Philippines if it will operate here.

"Kaya po natin pinare-rehistro ang mga kumpanya para makita natin, unang una, sino mga tao behind them," he explained. "Kung hindi po natin makita sa database, medyo mahihirapan po tayong habulin."

The National Bureau of Investigation, the Bangko Sentral ng Pilipinas, and the Department of Trade and Industry are also investigating Emgoldex's pyramid scheme.

A cease and desist order had been imposed on Emgoldex in Massachusetts, US, and it has been banned in Finland, Colombia, Estonia, and Panama.

People who try to recruit "investors" in Emgoldex claim that the company is registered in Europe, but a complaint filed by Massachusetts Secretary of State William F. Galvin showed that it is registered in the Seychelles, an island nation off Africa.

ABS-CBN News called Emgoldex's alleged administrative office in the Seychelles to get its side but no one wanted to talk.

Emails sent to addresses on its website have also yet to get replies.

In the last 20 years, people have lost more than P80 billion to investment scams in the country.

These scams include Bancap in 1994 (P900 million); Multitel (P25 billion) and Mateo Management Group in 2002 (P4.3 billion); Tibayan Group in 2003 (P2 billion); Francswiss (P1 billion); Performance Investment Products Corp ($250 million) in 2007; and Legacy Group (P30 billion) and Royal Manchester Five Trading Corp. (P2 billion) in 2008; and Aman Futures Group in 2012 (P12 billion).