45 Years for Fraud; (Editor's Note: In RP, Swindling Is Treated like a Bad Loan. in the US, Corporate Fraud Can Fetch 45 Years in Prison as Noted by the Author.)

Article excerpt

LONG before martial law ended an old friend asked me if it was safe to invest a large sum in a venture that promised a return of 45 to 60 percent interest. I said she could try a small sum first.

'Banker' as movie bida

From newspaper features I learned that the "investment banker" placed the people's money in a movie venture, with the banker himself as bida playing the role of a navy commander.

I advised my old friend to get back all her small investments that very day. It turned out she gambled a large amount for an old woman of her modest means.

On a stretcher to the clinic

In three days three old girls in our office, including my old friend, were brought to the clinic with a blood pressure of 190/110. The second and third interest due on their investment could not be paid. The management said that pledges from hundreds of investors did NOT materialize.

Slap on the wrist

For the first time the news media referred to the venture as "pyramiding." It is a moneymaking scheme in which revenues are derived chiefly by recruiting increasingly larger groups of new investors, each of whom pays for the right to recruit others in turn.

The government immediately announced that all those involved in the fraud would be prosecuted. The venture's promoter was arrested and charged. They were all given a slap on the wrist for divesting some investors of their retirement benefits and age-old pension.

All-girl clientele

After Erap took his oath on June 30, 1998, a new group was denounced for swindling an all-girl clientele this time. It's incredible that many of the girls parted with R1 M to R10 M as "sure" investment. Within a few weeks the scheme collapsed. Young and old girls trekked to the prosecutor's office to file a litany of cases for swindling.

Bad loan?

To this day it remains unclear if the cases really prospered. In RP, swindling is treated like a bad loan. Investors get tired waiting for hearings by prosecutors until they give up.

Some three years ago, a pretty matron was denounced as the promoter of a multi-billion pyramid scheme. As with the two previous cases, the investors are not pretty sure if they could recover their investments or the prosecution would succeed. …