Fake ‘SM’ online firm lures investors

PHILIPPINE NEWS SERVICE — BESIDES showbiz and media personalities, people who thought they were investing in a corporate giant were also victimized by online pyramid scammers.

In a statement it issued Wednesday, SM Investment Corp. (SMIC), a firm belonging to the conglomerate run by the family of taipan Henry Sy, warned that the websites SMFund.com, sminvestment. com “and any other website asking for solicitations online” were not affiliated to the company and not be responsible for the contents of the websites.

“Neither did the SM Group of Companies sponsor or endorse any investment scheme contained in the websites with the domain names “SMFund.com” and “sminvestment. com,” the firm said.

The extent of pyramid or Ponzi schemes on the Internet were exposed after authorities exposed FrancSwiss, supposedly an online fund management firm, as a racket that has victimized hundreds of investors.

Hubert Guevara, the Securities and Exchange Commission’s Compliance and Enforcement Department director, said two victims of sminvest­ment. com—who were alarmed by the reports about Franc­Swiss—reported to the SEC that they could not locate their “uplines” or recruiters and asked for the government’s help to recover their money.

One of the victims even borrowed about $2,000 to invest in the online fund management scam.

Guevara said the government has already identified the people who published the advertisements about sminvestment. com in Baguio City and they are looking into other ad publishers in other cities like Davao.

In the case of SMIC, the owners of smfund.com and sminvestment. com could be charged with trademark infringement “because we do not want the public to be misled into thinking that a stable company like SM is behind it,” Jaimie Aguilar, SM legal counsel, said.

The SEC said some unconfirmed reports have estimated about 5,000 Filipinos had invested in FrancSwiss alone, but the number could go as high as 25,000, with the minimum investment at $1,000 each.

Guevara said that people should be wary of websites or people who entice potential investors with a promise of 4.5- to 6-percent per day interest or “any too good to be true” yields that do not involve traditional investments like goods and services.

On Thursday, the lawyer of show-biz couple Claudine Barretto and Raymart Santiago confirmed they invested in FrancSwiss but that they themselves were victims and never received a return on their principle investment.

The lawyer, Ellen Veza, declined to comment on who recruited her clients into the scam or how they invested.

Veza said Barretto and Santiago also have to decide if they would press charges against Eli Castillo, the alleged financial adviser of FrancSwiss.

Castillo, who was arrested by the NBI last week, has implicated other celebrities in the scam, including Korina Sanchez and former basketball player Bonnel Balingit.

Castillo has also claimed police and military officials were among FrancSwiss’ investors.

Castillo faces charges of estafa in relation to Presidential Decree 1689.

The NBI named five other suspects who are at large: Jaime Poliquit; Garry Espiritu, Edwin Sendana, Edward Ricalde and Chris Erabon.

Also implicated in the FrancSwiss scam are American Roger Smith, head of FrancSwiss Investment in the Asia-Pacific region, and Singaporeans Raymond Chua and Bensy Fong.

Regional Director Ruel Lasala, chief of the NBI in the National Capital Region, said that since the arrest of Castillo, the agency has received a steady stream of alleged victims of the scam.

Lasala said it would be difficult pinning down the recruiters.

“Other scams before this had an office, so it was easy for us to trace who was liable for the scam,” he said. “However, in the case of FrancSwiss, if the victims choose to press charges, it usually means that they will be pressing charges against someone they know personally.”

The insidiousness of the FrancSwiss scam—the victims give the money directly to their recruiter—often without knowing who is behind or “in charge” means that the trail ends at the recruiter.

Often the recruiter is a personal contact of the victim—a family member or a friend—or even someone in a position of power over the victim. It is also possible that the recruiter himself is not aware that it is a scam, the NBI official said.