NAAWAN, Misamis Oriental (MindaNews / 20 June) – “If it’s too good to be true, it’s fraud.”
So said President Rodrigo Duterte on the KAPA investment scam that victimized millions of Filipinos.
The fraudulent investing scam promises high rates of return with little risk to investors. The scheme generates returns for early investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. At the end of the day, the multitude of hopeful at the bottom of the pyramid will be holding empty bags. It will be impossible to make pay-out to the ballooning investors and investments.
Defenders of KAPA, to count the fortunate early investors or donors who received pay-outs, argued that the ministry’s donation assistance scheme is a genuine, true and reliable program based on biblical concern and mandate to help the poor. They, the early pay-out recipients, are the hard evidence of the authenticity, truthfulness and reliability of the scheme. The defenders of the ministry do not consider their scheme a Ponzi or pyramiding investment marketing because they do not receive investments but donations.
The money poured into the scheme is termed donation all right, but when donors are promised pay-outs, the scheme takes the form of investment. The astronomical pay-out encourages people to “donate” more expecting for huge returns. The bigger the number donating with increasing amount of donations, the bigger the pay-outs will be which at the end is mathematically impossible to sustain.
Call it by any name to protect the ministry and the people behind it, the process and its effect remain the same: It is robbing Peter to pay Paul.
I had the opportunity to traverse Mindanao in the late ’90s to evaluate UCCP church-based cooperatives. That early I heard a lot of sob stories from victims of quick money scam, abundantly in Davao del Norte.
Government employees made loans from various sources and handed the proceeds to the scammers without second thought. Pensioners lost their lump sum pensions; farmers, their farm lots or farm animals because they uncritically took the bait. Even local churches and cooperatives squandered their funds to the scammers’ tempting and convincing stratagem.
Consider this. Some distinguished personalities in the community, no less than the chief of police, the mayor, the judge, school principals, and pastors of proliferating Christian groups who belonged to the first batch of investors, materialized in orientation-recruitment seminars, testifying on the truthfulness and reliability of the investment program, waving their checks, the returns of their investment, after a period of three months, and who are now enthusiastic to reinvest the capital and interest in full. To cap it all they and the new converts were handed outright post-dated checks equivalent to the value of their money plus the returns cashable after 90 days. Huge returns-of-investment were advanced to the investors in that manner.
Everyone was jubilant but at the end of the day all was clinging to a useless piece of paper. The scam solicitors disappeared to thin air. Many families were destroyed. As a consequence, many children had to stop their schooling. The pensioners start begging for food and medicines from their relations or neighbors. Church officials quarrelled and sulked; coops, closed shop. Some victims had died of heart attack or were reported to have committed suicide, unable to bear the devastating weight of the tragedy.
Promises. Promises. Promises lift the soul up to high heavens.
Indeed, Mindanao is rightly called the Land of Promise. Promises made by many scammers, financial, religious and political scammers promising the heavens, the bounty of the land, and peace on earth.
Not long ago, one promised confidently the end of corruption, the drug menace, all forms of criminality in 3 to 6 months; and to assert and protect the country’s sovereignty from foreign greed. Nothing has been ended or asserted. Instead, the country is being waylaid by Chinese wile and guile.
Truly, anything too good to be true is not true. As the President of the Republic himself emphatically said, anything that is too good to be true is fraud.
(MindaViews is the opinion section of MindaNews. William R. Adan, Ph.D., is retired professor and former chancellor of Mindanao State University at Naawan, Misamis Oriental, Philippines.)
