Remember the televised spectacle of our senators interrogating a lady boss and how she allegedly scammed and defrauded so many other people, including her very own relatives? There was even a close confidant of former President Joseph Estrada, whose wife had operated a failed pyramid-like financial scheme, victimizing even several leaders of the country’s political and business elites. What about false prophets peddling the gospel of wrong religion and cults, can the media, schools, the government and the legitimate churches forewarn the public?
Remember the charismatic 39-year-old Japanese Genta Ogami, whose amazing business empire built on falsehoods collapsed in September 2001 after having fooled over 90,000 people in Japan, the Philippines and Indonesia, even purchasing a Philippine bank called Unitrust and producing a movie starring himself with bold star Joyce Jimenez as his leading lady? Ogami bankrolled the $5 million film Blades of the Sun, in which he starred as a samurai hero who saves the Philippines. He swindled people by collecting $400 million dollars to become G.O. members. He was able to make people invest in the firm’s schemes based on promises they could double or triple their savings.
One of the fantastic lies of Ogami’s G.O. Group was the so-called miraculous product "Uniba-G Tea" made of banaba leaves from the Philippines. Ogami claimed this tea as a revolutionary cure for obesity and diabetes, even hiring Hollywood actor Jean-Claude Van Damme to appear in a TV commercial. One of the highlights of this bizarre marketing blitz was a mini-movie showing Ogami on a mission to look for banaba leaves in the Philippine jungle, with the egoistical Ogami often pausing the search with kung-fu poses wearing his boxer shorts.
Pyramid Scheme is a fraudulent money-making scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them
The United States of America has laws prohibiting pyramid schemes. In fact, this strict prohibition exists in the laws of each of the fifty individual states. Many foreign countries also have similar laws. These laws have different ways of describing pyramid schemes as a form of gambling, but actually I strongly believe these pyramid schemes are plain and simple fraud.
Pyramid schemes have a negative impact on the national economy and are a social evil. They not only cheat innocent people out of their hard-earned savings and incomes, but also steal the people’s capacity for hard work and true entrepreneurship. The pyramid scheme thrives on the prevalent get-rich-quick mentality of many people, similar to the insidious jueteng, other gambling and games of chance, which offer people false hopes.
It must be an amazingly depressing phenomenon for a person to be immortalized for fraud, such as Charles Ponzi who ran such a scheme in 1919 to 1920. Ponzi was an Italian immigrant, a dapper five-foot-two-inch rogue who amassed an estimated $15 million in eight months by deluding tens of thousands of Boston residents into thinking he had unlocked the secret to easy wealth.
A Ponzi scheme is an investment scheme in which returns are paid to earlier investors, entirely out of money paid into the scheme by newer investors. Ponzi schemes are similar to pyramid schemes, but differ in that Ponzi schemes are operated by a central company or person, who may or may not be making other false claims about how the money is being invested, and where the returns are coming from. Ponzi schemes don’t necessarily involve a hierarchal structure, as in a pyramid scheme. There is merely one person or company that is collecting money from new participants and using this money to pay off promised returns to earlier participants.
Ponzi claimed to have found a way to profit by speculating in international postal reply coupons – a form of prepaid return postage for use in foreign correspondence. After he had paid off his first round of investors, he scarcely had to repeat his story. All that anyone cared about was that he paid 50 percent interest in 90 days. Later, he shortened the investment period to 45 days. In no time, the money was rolling in. At the height of his success, Ponzi had offices from Maine to New Jersey all over America. The problem was that there was no actual investment going on; the only activity was the shuffling of money from new investors to old ones. Half a dozen US banks crashed after the collapse of Ponzi, with his note holders receiving less than 30 cents for each dollar.
Unlike some of their rivals, there are several very successful Philippine businesses which still refuse to go into franchising due to their owners’ sense of responsibility in not wanting to shortchange future franchisees, such as Gerry’s Grill restaurant bar, Teriyaki Boy Japanese fastfoods, and Ahead Review School & Learning Systems, among others. These entrepreneurs want to further improve and perfect their business systems before offering franchises.
Some mediocre franchises have lousy restaurant chains or other business endeavors. They keep getting franchise fees like modern-day hacienderos but giving little back in terms of advertising, marketing, good management and high-quality products or services.
Reason? Short-term greed and simple lack of wisdom, because these modern-day hacienderos believe that it is good business for them – their bread and butter is no longer their core business. It has become the franchise fees they milk from their modern-day sacada franchisees every month. The government must enact laws to strictly regulate Philippine franchising and make sure that these fraudulent franchise sellers will be penalized, jailed and emasculated!
The "Father of Philippine Franchising" and Francorp Philippines CEO Samie Lim told the Philippine STAR that there are business chains in the country that are actually not doing well, and they may even sincerely and mistakenly believe that franchising can revive their business fortunes. The country has numerous untold horror stories of franchisees that had lost so much money due to mediocre entrepreneurs who peddle their businesses as franchises. Beware of these business frauds that are a menace to Philippine free enterprise!