Aman Group Philippines Incorporated (AGPI) operated this scheme.
Its investors claimed that you can earn as much as 31% in 8 days or 100% in a month.
In other words, it can "double your money" in a month.
No wonder so many people and even some government officials in Pagadian City (as claimed by Cille Anne's cousin in her blog post) invested in the scheme.
What is AGPI's business?
AGPI company claims that it engages in buying and selling of products (such as palm oil) in Asia.
It has branches in Manila, Cebu and Mindanao.
Thousands of people have already invested and benefited in the company according to Zamboanga Today online news.
It actually conducted an outreach activity by giving rice and grocery items to thousands of citizens in Barangay Kawit, Pagadian City, Zamboanga del Sur.
As of this date, Mr. Fernando Luna is the President of the Pagadian City branch (located in Mindanao).
Based on its huge rate of return in just a few days and with very little risk, is AGPI operating a ponzi scheme?
As what it promises, many Filipinos speculate that it's a ponzi scheme.
One of the istorya.net users claims that AMAN investment is a cleary a scam, a ponzi scam. [source]
In a ponzi scheme, old investors are being paid from the investments of new investors. If the flow of recruitment or membership stops, the scheme will collapse and leaving most investors to suffer the losses.
Studying AMAN's Investment Strategy
To fully determine whether AMAN investment is a scam, you must study how AMAN earns money, how they generate revenue or how they invest the the money they receive from its investors.
As we know, AMAN claims that they engage in a buy and sell business. But the question is, does their business generate enough revenues to pay their investors?
AMAN promises to pay 31% interest to its investors in 8 days. So, AMAN must earn more than 31% of the total money being invested in the company in 8 days in order to meet its obligation to pay its investors.
To give you a better understanding of what I mean, let's take a very simple example. There are 10 people (investors) who invested in an investment company named "Milyonaryo Inc.". Five (5) of these investors come from outside the Milyonaryo Inc. and five (5) are within the company.
These 10 investors invested P10 each. So, the total investment fund is P100. [10 people x P10 = P100].
Milyonaryo Inc. promises its investors to pay them 31% interest in 8 days. So, each investors must be paid P13.10 after 8 days. [31% x P10 = P3.10] [P3.10 + P10 = P13.10]. The company pays a total of P131 to 10 investors.
Therefore, Milyonaryo Inc. is forced to earn more than 31% of the total money invested (or more than P131) in 8 days in order to pay all investors.
If the company earns 31% or lesser than that, it cannot pay all of its investors. This would lead to company's bankruptcy.
Now back to AMAN investment scheme, like I said if AMAN doesn't generate more than 31% profit in 8 days, this would mean big trouble. Consider also the other expenses such as operating expenses, rentals, transportation, taxes, etc.
If AMAN is promising you a business that doesn't generate enough profit to pay its investors, we can say that its investment scheme is a ponzi scam.
A ponzi scam is a fraudulent business that pays old investors mainly from the payments of new investors.
You might insist, "Why does AMAN still survive and continues to pay its investors until now?".
It can survive and continue to pay its investors if there's still more new investors coming in. If the business doesn't generate enough profit and only few or no more new investors are joining, AMAN will collapse or cannot survive.
Due to the alarming growth rate of its investors, some concerned individuals reported the alleged investment scam to the government authorities.
That's why the Securities and Exchange Commission (SEC) of the Philippines issued an advisory on August 23, 2012 to warn the public against an alleged investment scam in Pagadian City.
Here's the official advisory of SEC (sec.gov.ph):
SEC ADVISORYNOTICE TO THE PUBLICOn 17 August 2012, the Securities and Exchange Commission (SEC) received reports that a firm operating in Pagadian City, offers securities to the public with a promise of "double your money" for the investment made. Investors lined-up to be accommodated because of the representation that a P50,000.00 investment would generate an "assured" 50%, or P50,000.00 yield in a month.The public is reminded to be over-cautious or exercise prudence in investing their money in what appears to be a high-yield risk investment which may turn out to be a fraudulent scheme.Where the scheme involves the sale of securities, please make sure that these securities are registered with the SEC. In this regard, you may inquire with the Corporation and Finance Department (CFD) of the SEC at telephone numbers 584-6103 or 584-5950.
If someone offered you to join in this investment scheme, the best thing to do is to ignore it.
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