Recto seeks probe of pyramid schemes

Sen. Ralph Recto is seeking an investigation into pyramiding schemes following the case involving the group led by Japanese businessman Genta Ogami of the Unitrust Development Bank.

"People, especially those looking for additional income in these hard times, can easily be hoodwinked of their hard-earned money, especially when government is just too slow on pencil-pushing on complaints against the pyramiding scheme," Recto said.

Unidentified employees of Unitrust said Ogami, owner of G. Cosmos Philippines, engaged in cross-border pyramiding by using money raised from the Manila office to attract investments from another one, such as in Indonesia where he also owns G. Indonesia and G. Italy.

Recto said it took almost a year since a client first wrote a complaint against G. Cosmos before the Securities and Exchange Commission acted to secure information from Japan. At that, time, the government already had adverse information on G. Cosmos and Ogami’s activities and yet allowed Ogami’s group to assume control of Unitrust Bank.

Recto said the SEC could have acted with greater urgency and prevented the massive control of Unitrust Bank.

Recto said the SEC could have acted with greater urgency and prevented the massive swindling of Filipinos who believed they were investing in a legitimate foreign business enterprise.

The senator added what aggravates the situation is that most of those swindled by the alleged G. Cosmos pyramiding scheme were retirees, teachers and housewives from the middle – and low-income classes.

"The thousands of Filipinos swindled by the pyramiding scheme, of which the G. Cosmos is only one of too many, reveal the potential of small investors who could have otherwise put their money into small-denomination government savings and investment schemes," Recto said.

Recto also expressed alarm that the Bangko Sentral ng Pilipinas and the Department of Finance failed to protect the interests of depositors of Unitrust Bank.

The senator said the issue of foreign ownership in the banking industry might again be tackled seriously as Ogami reportedly held 60 percent of Unitrust Bank immediately before its closure on Jan. 4.