Police warns vs. investment scam

Local law enforcement officials are on top of an extensive intelligence operation that investigates the involvement of CNMI-based individuals in an investment scam that has reportedly ripped-off hundreds of their hard-earned dollars.

Police Commissioner Charles W. Ingram Jr. said that a number of CNMI residents have reportedly established links with Prosperity.com, an Internet-based business believed to be a promoter of the pyramiding scheme.

The Philippines-based online firm reportedly lures clients for investment opportunities with the promise that it would translate to a lump sum profit for the investors.

Mr. Ingram disclosed that the Department of Public Safety is working closely with its counterparts in the Philippines in an effort to curb the spread of what is conceived to be an illegal business practice.

The scheme requires an active participant to pay a membership fee $234 to $294 and entice to more people to join the business. As the investment promise goes, the recruiter will receive twice the amount of funds he or she initially invested.

Public Safety officials are urging members of the community to be wary of the allegedly illegal fund-generating scheme.

The police commissioner is also soliciting assistance from people who have knowledge of the organization to cooperate with police, soliciting island-wide support in the agency’s efforts to prevent any more victims from falling prey to the scam.

Reports carried by a Philippine-based publication revealed that the Department of Trade and Industry’s has began probe on two companies that could face sanctions for violating securities and trades laws for their involvement in the pyramiding scheme.

The two firms have been identified as Power Homes Unlimited Corporation and Prosperity.com (said to be linked with Prosperity Mansions, also known as Golconda Ventures).

According to reports, the Philippine Securities and Exchange Commission has issued cease-and-desist orders against the two companies in connection with their supposed involvement in illegally recruiting investors without acquiring permit from the commission.

Based on initial investigations, SEC learned that Prosperity.com invites investors who must first pay a certain amount and recruit at least two others to profit from their investment.

But the commission noted that the company registered business to sell computer and software services, yet it required investors to pay a membership fee of $234 to $294. The amount reportedly entitles the investor to a 15 MB website, a prosperity coupon worth $2,700 and a redemption coupon of $92 upon recruitment of two others.

Meanwhile, Power Homes obtained a business license to operate as real estate development property. However, its company brochure describes the business group as a firm that promotes and facilitates the sale of real estate property through leverage marketing.

Power Homes requires an investor to become a Business Center Owner by paying an enrollment fee of $234. The client is then asked to recruit two other investors for whom he or she would receive $92 in commissions.

According to SEC, the corporation’s pyramid sales scheme is an investment contract which should be registered with the commission prior to its sales or distribution by filing registration statements.

The commission further added that since the securities offered for sale are not registered with the agency, there is an imperative need for the corporation to be enjoined from operating and from further engaging in selling, offering for sale or distributing securities in order to protect the interest of investors and the general public.