Purapat Somyanarong, a business owner from Rayong, is always looking for new ways to invest his money. Although the 45-year-old entrepreneur is not a multimillionaire, he always seems to be able to find money to invest in anything that sounds like a good deal.
Purapat and his family understand how difficult it is to earn money. When they have it, they always find some kind of investment to make their money grow: leaving their money in the bank, investing in gold or buying land.
One day Purapat heard from a friend about one kind of investment that guaranteed a high yield.
"We were told we would get a 40% return on our investment. My friend said it involved forex trading. I didn't really understand it. All I knew was that it had something to do with foreign currencies. To be honest, the only thing I cared about is the high yield. So I agreed to invest in it," Purapat said.
He initially put in 50,000 baht to see if he could really get the money back. Within one week, he got the money back as guaranteed. Purapat was excited to see how easy it was. He told his wife and son about it. The next thing he knew, the whole family invested their money in the mysterious forex scheme. Things seemed to go well until two months later when the returns dried up.
"We were conned. It's that simple," Purapat said.
EASY COME, EASY GO
Purapat is a firm believer in the principle: let the money do the work. This time was no different. When a close friend introduced him to Infinity Life, at first he was sceptical.
"Is it real? How can it be this easy?" he asked his friend.
His friend showed him her bank book. That's when he began to put his faith in this forex scheme since his friend received regular transfers between January and June last year.
He put a small amount in just to see if he would get something back. As promised, he received his first chunk of investment back.
The company agreed to pay 40% investment back from the money that members put in. The company would transfer one-quarter of the investment each week until the end of the month, so an investment of 10,000 baht would mean payments of 2,500 baht over four weeks.
"I have to admit, the money seemed very tempting. Once I realised I could make a lot of money from this, I urged my wife, my son and my daughter to invest in the venture. Everyone got their money back for two months. Then the company stopped paying after August," Purapat said.
Infinity Life isn't registered. The company does not have a website or nor offices like legally registered companies. The only tool they have to operate the business is the Line chat application. Purapat was part of the smallest chat room among 33 rooms the company has. His room has 107 members. Some rooms have up to 400 members.
Purapat talked to other members in his chat room and everyone was in the same boat. No one had received any money since August.
He didn't know what to do so he contacted the man who claimed to be the president of the company. The man said he would start paying again the following month. Since he always answered the phone when Purapat called and was never evasive, Purapat believed he would eventually get his money back.
"Time passed by until the end of the year. I tried to contact the owner again and he wasn't available. They still owe me 2 million baht. When I asked other people in the group, it transpired that all of us in the smallest group lost 14 million baht. I calculated it roughly from other members in other groups, this operation easily conned at least 1 billion baht from members," Purapat said.
"Some of us wanted to report the matter to the police, but someone from the company warned us that they have connections with the police and military. They said some members are even in the army.
"Also they told me that I will be the one held responsible since I invited other people to invest, not them. Many people are scared of the company but I am not. At this point getting the money back is not as important as getting the truth out there. The company is still operating and I want it to stop."
HUMAN NATURE
Ponzi schemes are not new to Thailand. One of the most well-known Ponzi schemes in recent years was the Mae Chamoi scam that took place between 1984 and 1985. Chamoi Tipso, widely known as Mae Chamoi, conned 8 billion baht from 13,248 people. Her case dragged on for four years and ended in 1989.
REELED IN: Pattamavate Siritanet, right, fell for a mulberry scheme. PHOTOS: CHAIYOT YONGCHAROENCHAI
The final result was quite shocking. With multiple charges, the court sentenced Chamoi to 154,005 years in total. However, under the new law, no one can serve more than 20 years. Mae Chamoi served eight years and was released in 1993. Her case should be one of the most important lessons to anyone thinking about investing in this type of scheme, but that clearly is not the case. Year after year, Ponzi schemes make the headlines.
In the most recent case, Sin Sae Shogun, head of the alleged pyramid scheme Wealth Ever, tricked more than a thousand people into buying cheap tour packages to Japan during the Songkran break. It transpired that such tours did not exist and the victims were abandoned at Suvarnabhumi airport.
Pikanet Tapuang, deputy secretary-general of the Office of Consumer Protection Board (OCPB), told Spectrum: "The reason Ponzi schemes will always exist in Thailand and will continue to con people is because Thais do not want to work hard yet still want a lot of money.
"Any job that doesn't involve sweat, tears and effort is not a real job. Of course everyone wants to have an easy job and earn a lot of money. Thai people love a comfortable life. Many Thais love to work less but still earn plenty. When the yield is good enough to motivate people to invest, Thai people are more than willing to get involved even though they are fully aware of the risks."
Pikanet admitted that Ponzi schemes are always among the top five complaints at the OCPB.
"We see at least one new case a week in both our complaint centre and from the news we monitor," he said. "The reason they remain an intractable problem is because this type of investment always starts among people who the victims know and trust, like family members or colleagues."
The legality of the company can't guarantee that the company that people invest in is legitimate. There are many companies registered as direct sales businesses which trick people into investing in Ponzi schemes.
"If they are registered this means we can easily trace them. It doesn't stop them from conning people, however," Pikanet explained.
"The best way to protect yourself is to study the investment before parting with any money. Check their previous status. The annual report of the company is probably the best tool to determine if the company is real or not. If you can't find out much about the company or it somehow looks suspicious, just follow your instincts and don't invest with them."
OLD TRICKS
The Economic Crime Division of the Royal Thai Police lists the different types of tricks fraudulent investment operations use to fool people to invest with them. They will use the name of powerful people such as police or military officers as their board members. When people see such businesses are backed by high-ranking government officials, they will trust the company and invest with them.
Fraudulent operations usually get people to invest with by boasting impressive yields. Forex is one of the most popular ways such operations con people since they offer handsome returns that investors can't say no to.
The next most popular trick is using agricultural products as back-up. This type of investment is popular among people in upcountry areas. Many people, especially farmers, are open to this kind of investment since they can see actual products or even the factories that make the products. Often relying on a network of friends, this type of investment may not be as high per head, but such scams can rake in a lot of money from sizeable networks.
Listing the company on the bourse is also another way to gain the trust of potential investors. Many people believe that a company must be quite stable in order to enter the stock market.
Gold and tour operations are another popular type of fraudulent investment which frequently make the headlines in the local media.
EASY TARGET
Pattamavate Siritanet, a 38-year-old government official from Kamphaeng Phet province, never thought he would be conned easily considering his education and the type of friends he has. One of his friends was a victim of a Ponzi scheme called U Fun and he always knew that he would not fall for the same trick.
In September last year, he heard from a colleague about an investment that paid good money. His co-worker suggested he invest in a mulberry farm. He saw bottles of mulberry juice labelled with the brand name and mulberry coffee products in beautiful packaging, which was enough to convince him that it was legitimate.
"I told my other friends about this investment opportunity and everyone seemed interested. Before I agreed to invest, the owner of the company even took us all to visit a farm and factory in Chiang Rai. So we fully believed in it after the trip. But what really convinced me was that the owner told me this project was in the process of getting support from a royal project," Pattamavate said.
He first transferred 38,000 baht to see if he got the money back. In fact, he got it back the day before they promised to transfer the money. He and his friends decided to invest more. Some friends who invested in the scheme got gold necklaces and cattle as rewards for finding new members.
Pattamavate invested 900,000 baht, transferring funds to many different accounts under multiple names. But after three months, he did not get any money back.
"I checked up on the company and found they have networks all over Thailand. Within my province, 95 people were conned. We lost about 10 million baht in total. I learned that the network in Nakhon Sawan lost 3 million baht and the network in Sisaket with 110 members lost 23 million baht. They also have many other members in more than 30 provinces in the North and Northeast and some in Laos," Pattamavet said.
"The scary part is that the company has changed its name three times and is still operating. Getting our money back is not the priority. I really want people to be aware of this operation. I don't want anyone else to be conned like us."
STRONGER LAWS NEEDED
Samart Janechaijitravanit, president of the Stop Ponzi Scheme Federation, told Spectrum that fraudulent investment schemes have always been among the main economic crimes in Thailand and will continue to be a threat to economic stability in the future if Thailand doesn't change the laws to control this type of fraud.
"I believe even at this moment there are many people still ready to invest in this type of scam and the victims of such scams before might become con artists themselves since they know how they work. As long as the law is not strong enough to scare them, we are going to have to deal with this problem endlessly," Samart said.
Samart gathered all the cases he has covered for three years. He said there are at least 320,000 victims of Ponzi schemes in Thailand.
The law states that individuals who commit this type of crime only have to serve seven to 14 years in prison. Samart suggests that the sentence should be changed to 50 years.
"We have many organisations and offices dealing with different types of crime but we do not have a single unit that deals exclusively with Ponzi schemes. This type of crime should be handled by its own agency and people shouldn't be scared to report such crimes to the police," Samart said.
The pace of changing technology and the advent of social media has made it very easy for charlatans to con people. Social media is one of the most important tools scam operators use to lure the greedy and the gullible. Samart suggests people use social media wisely and exercise caution when they see offers.
"The Thai justice system also works quite slowly. One case can take up to five to 10 years and the con artists themselves don't have to serve their time in full," Samart said.
"Those who have connections with influential figures can get away with it easily by bribery. What does that mean? It means justice can be bought in our country. That is why this type of operation keeps coming back and it still going to be a bigger problem in the future if there is no proper law that is strong enough to deal with the issue.
"Ponzi schemes can destroy our economic stability from the inside. When people are scared to invest or spend money, they won't buy products or pay for services. Then the government will not get value-added tax.
"When no one pays tax, the government will have no income. It has a chain reaction on the whole system. It's time for the government to wake up and serve the people as they are supposed to do."
CONNED: Purapat Somyanarong and his wife were cheated by Infinity Life. PHOTO: CHAIYOT YONGCHAROENCHAI
BROUGHT TO JUSTICE: Executives of the Wealth Ever pyramid scheme arrive at a police station for interrogation. PHOTO: Patipat Janthong
NABBED: Sin Sae Shogun, head of Wealth Ever, tricked more than 1,000 people into buying cheap package tours to Japan. PHOTOS: Patipat Janthong
warning: Samart Janechaijitravanit. CHAIYOT YONGCHAROENCHAI
