"Get-rich-quick

schemes" thrive in PNG

By Sam Vulum

ALL kinds of “get-rich-quick” financial services, both legal and illegal, have popped up in Papua New Guinea, taking advantage of the tough economic times in the country. And the Bank of PNG has warned the public to be wary of such activities because there are no laws that could be used to prosecute such operators.

At least three of the known schemes have international con nections. There is a chain letter scheme, the Nigerian scam and the Pentagono scheme. There is also a local scheme available only to Bougainvilleans.

The one that is currently doing extremely well in PNG is the Pentagono, managed by Future Strategies of Muratori, 1-11012, Carpi (MG), Italy. This scheme is enrolled with the Chamber of Commerce and Industry in Modena, Italy under CCIAA no 276952, VAT NO 02252430364, Registration No 4091. This makes the system completely legal.

Proponents of the scheme claim it has worked in 60 countries throughout the world, including five in the South Pacific - PNG, Fiji, Samoa, Vanuatu and New Caledonia.

It is drawing hundreds of Papua New Guineas, some of whom have claimed to become rich overnight. Others though are scepti cal and have questioned its legality.

To join, a new customer has to buy a list of seven people, for US$4O, from an existing customer - someone who is already on the scheme and whose name is at the bottom of the list.

The new customer is required to send the US$4O to future Strategies in Italy. Future Strategies sends the new customer three lists, placing the existing customer (list-giver) at sixth position, while the new customer will be at seventh position.

The new customer then sells the lists to three more customers for US$4O each at which point he or she will have recovered his or her initial outlay, except for incidental expenses.

These latest customers then send US$4O to the person at the top of the list and to Future Strategies and so the pyramid grows, with each person moving up the list as it does so.

Providing everyone in the new customer’s pyramid sells all their lists, when the new customer is at the top position in the list, there will be about 2187 people buying the lists, all of whom will be sending the new customer US$4O.

If the customer wishes, he or she can monitor their progress through a fax number provided by Future Strategies. Then, the theory goes, all the customer has to do is sit back and wait for the money to pour in. Several people claim to have benefited from the scheme - one invested K 220 and ended up making Kl4OO

within weeks; another earned K 30,000 and another K9OOO.

One beneficiary said although he had been unemployed for more than three months, his K2OO investment with Pentagono kept him going.

"I am encouraging my family and friends to do likewise and even offering to help them financially from what I am receiving from through Pentagono. I am confident I will continue to enjoy the luxury of being unemployed and just relaxing and doing my own thing,” he said.

Another said it was a genuine scheme, which, unlike other schemes, only had seven levels. This allowed all involved to have their time on top. He said no-one becomes rich from the efforts of everyone below them - once they reach the top position, they receive their payment and their names are removed from that cer tificate, making way for the next person on the list.

In an information sheet to a customer, Future Strategies said that the mathematically tested Pentagono system represents the improvement and best synthesis of over 50 year’s experience and university studies.

However, there are sceptics who describe it as evil, unscrupu lous and a scam. One said the illusion that wealth can be created by short-cuts, and without working hard for it, was the basis on which the scam worked.

He said the government has to warn people of such evil schemes from overseas which intend to defraud Papua New Guineans who are not even aware that it is outlawed in other coun tries.

“Not so long ago, in Albania, pyramids resulted in political tur moil and social chaos as millions of people lost so much money, many their lifetime savings and even homes. In that case, many Albanians blamed their government for not warning them about the inherent evil of these pyramids schemes, where the only ones who profit are the company running it, and a small group of win ners. The majority of the participants end up as losers,” he said.

Some suggested that thousands of funds were being laundered through the foreign organisers of Pentagono at the expense of cus tomers.

A sceptic attempts to highlight this suggestion through a step by-step description of what he alleged has been happening, based on a situation where a customer is at the eighth level among 2186 others, with a total of 3280 others in that pyramid (2187 in the customer’s level plus those at levels on to seven).

He said if the chains building the pyramid do not break when the customer reaches the top of the list, the other 1286 people who bought in when the customer did should also be at the top of their lists. There will now be 15 levels in the pyramid.

The sceptic said to fill that level, it would require 4,782,969 people to buy into the scheme.

The total number of people in the pyramid would be 7,174,453 (40 x 2187). He said at this point, Pentagono will have collected US$4O from everyone in the customer’s pyramid, a total of U 55131,200 (40 x 3280). In addition, in customer’s completed pyramid of 15 levels, Pentagono will have been paid U 55286,978,120.

He said should the chain survive for one more level, it would require an additional 14,348,907 people, bringing the total involved to 21,523,360. All of these people will have sent

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Pentagono US$4O, a total of U 55860,934,400. Meanwhile, the Bank of PNG, which warned the pub lic against such schemes, has reported

ly enlisted police help to investigate

another finance company that is oper ating “illegally” in the country.

The bank took out advertisements in newspapers, in both English and Tok Pisin in January, warning the public against depositing money with the company.

Bank governor Morea Vele said the company - U-Vistract Finance Corporation Limited - has been hold ing itself out as a finance company.

Vele said the company is asking the public to deposit money with the com pany with a promise of paying 100 per cent interest on the deposits.

“We would like to inform the public that under the Banks and Financial Institutions Act, only licensed institu tions are allowed to accept deposits from the public,” Vele warned.

“U-Vistract Finance Corporation Limited is not a registered or licensed financial institution and as such, the company is carrying out an illegal business of accepting deposits from the public”.

He also warned members of the public against depositing money with the company because “your deposits would not be protected or you would not earn interest on your deposits as promised by the company”.

Vele said the Central Bank believes the company is operating out of Lae, Port Moresby and recently in Buka but may have also expanded its operations to other parts of the country.

He said the Bank will be requesting the Criminal Investigations Division of the Police Department to look into the matter. Wilson told a seminar in Port Moresby that the Central bank could not use existing laws to deter such activities, instead, it was only able to issue warnings through public notices in the media.

“If a scam operator starts a finance business in Papua New guinea, the Bank is unable to deter such activities (except) through public notices,”

Kamit said. Kamit warned that those behind such schemes may use the method of “up front fees” for promises of financial services that never materialise. ■