AMAN FUTURES PYRAMID SCAM
Submitted to:
Mr. Bhandamme Paragas
Submitted by:
Corbito, Athenea Satlene Joy
Pinzon, Roxy Anne Kate
Taguinod, Mikaela Mair Averel
Turalba, Carla
BSA 2-C
INTRODUCTION
Aman Futures is a group founded by Emmanuel K. Amalilio, a Filipino of
Malaysian descent, in 2012. It was a Malaysia-based investment firm with
branches in the Philippines that was privately held. It is also suspected of
participating in a pyramid scheme.
In the same year (2012),
the National Bureau of Investigation (NBI)
denounced Aman Futures as a pyramid scheme that defrauded around 15, 000
people in Visayas and Mindanao out of about 12-billion pesos of their hardearned money making it one of the biggest pyramid scam in the Philippine
history. It was oriented on commodities-trading investments, and it promised
investors an 80% return in 20 days.
SUMMARY
The pyramid scam, called one of the country's biggest in history, has
plundered an estimated P12 billion hard-earned money. Aman Futures'
investors number around 15,000 people, mostly from Visayas and Mindanao,
and include ordinary people like fish vendors, motor cab drivers, and
underprivileged neighbors.
The timeline of events start on January of 2012, Aman starts
encouraging the public to invest. “Double-your-money” strategy was used to
dupe investors. Aman then offered investors a 30 to 40 percent return on their
money in eight days and a 50 to 80 percent return in twenty days.
On April of the same year, Aman is given a business permit for general
merchandise.
Pagadian City Mayor Samuel Co later revealed that he requested an
investigation into Aman Futures on June 4, 2012. However, the NBI later stated
that there were no complainants and that they were unable to collect proof since
funds were deposited in Fernando Luna's account, who oversaw Aman’s
operations in Pagadian City. Thus, they then advised Co to revoke the company
license.
However on June 6, 2012, Aman was able to submit the appropriate
documents, including a Securities and Exchange Commission registration and a
Department of Trade and Industry (DTI) permit apparently signed by DTI
Secretary Gregory Domingo, to allow them to keep their permit. According to
Aman, the money was sent to Okachi Malaysia, a trading company.
Co revelead that he terminated the permit on June 18, 2012, claiming
that the firm did not fit the permit that the city had granted them. The permit
for Aman's business was for general merchandise, but the operation was
classified as investments. Despite the permit being revoked, operations and
money collection continued. According to Co, investors pleaded with him not to
close it because they earned money.
On June 29, 2012, Co claims he wrote to the Sangguniang Panglungsod
requesting assistance in stopping Aman Futures operations. He said he doesn't
know what Sangguniang Panglungsod's conclusion was.
During July 3, 2012, according to Co., Aman reapplies for a permit with
Pagadian City. Co said that he would not offer them another permit and dragged
the application to avoid doing so.
On July 11, 2012, Co responded to Aman and asked for a secondary
license from SEC to approve their request.
On July 27, 2012, Co authorizes Aman to operate, but insists he
"technically" did not provide them a business permit. Instead, he rationalized his
actions by stating that since they were already running, he would collect taxes
from them. Co claims he merely duplicated the Cebu document, a tax
certification, that Aman showed him. He claimed he didn't know if Aman has a
Cebu business permit.
It was on August 2012, Mayor Samuel Co invested in Aman to grow their
campaign funds for the 2013 elections. Also that month, Co shown Aman
chairman Emmanuel Amalilio the third floor of the City Commercial Center, a
government-owned mall in Pagadian, as a location Amalilio could rent for Aman
because the firm needed a larger facility to accommodate the lines and people
that came out to invest. Co also stated that this was their first and only meeting.
Co invested up to P42 million with friends, relatives, and other city hall
employees in September. Towards the end of the month, Fernando Luna, the
president, left ahead of Amalilio and it is when things started to change.
Investors started filing complaints in the NBI against Aman for its failure to pay
back their money.
On September 26, 2012, Aman office shuts down and its employees were
nowhere be found.
On October 8, 2012, The Securities and Exchange Commission (SEC)
orders a cease-and-desist order preventing Aman Futures from further soliciting
public investments. It claimed the ruling was the outcome of an investigation by
its Enforcement Prosecution Department in response to public and government
agency concerns.
On October 10, 2012, Co claims to have been in Manila. He claims he
went to Justice Secretary Leila de Lima and asked her to seek a hold departure
order to keep Amalilio from leaving the country. He claimed to have written a
complaint affidavit against Aman that day. Co also stated he was in Manila for
4-5 days and had gone to the National Bureau of Investigation (NBI) to ask for
assistance in finding Aman's home.
On October 12, 2012, NBI receives a letter from Gov. Antonio Cerilles
accusing Co of being involved in the scam. Co had distributed checks to
investors, according to the letter. Co admitted to handing out checks but denied
involvement with Aman. After Luna left, he said he distributed checks left in the
Aman office.
NBI confirmed that Amalilio left for Sabah, Malaysia on November 14,
2012.
On November 16, 2012, Philippine Ambassador to Malaysia J. Eduardo
Malaya collaborated with the Malaysian government to return Amalilio home. A
14-member special panel of prosecutors joined together to start a preliminary
investigation into the investment scam. The Bureau of Immigrations also issued
a lookout bulletin against 38 people suspected of being involved in the scam.
According to the investigation, Aman Futures' corporate secretary,
Attorney Isagani Laluna, and one of its directors, Lurix Lopez, confirmed that the
company utilized two ways to entice investors. The first strategy is to use a Ponzi
scheme.
Ponzi Scheme is "an investment program that offers impossibly high
returns and pays these returns to early investors out of the capital contributed
by the later Investors" (GR Nr 10860-02, September 3, 1998). These are schemes
that " promise high financial returns or dividends not available through
traditional investments. Instead of investing the funds of the victims however,
the con artist 'pays' dividends to initial investors using the funds of subsequent
investors The scheme generally falls aport when the operator flees with all of the
proceeds or when a sufficient number of new investors cannot be found to allow
the continued payment of dividends" (FBI definition)
The second strategy was to inform investors that their money was being
put to good use. That it was legitimately used for the purpose of commodity
dealing in other countries, particularly Malaysia. Aman also informed investors
that it has signed a Customer Agreement with OKACHI (Malaysia), a Malaysian
broker backed by a larger financial organization OKACHI (Japan). Aman Futures
never got associated with OKACHI.
It was also found out during the investigation that the money scammed
was used by Amalilio to acquire eight planes and two helicopters, as well as two
units at Upper McKinley Hills Garden Villas in Taguig City, a house in Cebu City
and another in Dapitan City.
On November 18, 2012, Aman's financial manager, Maria Dona Coyme,
presents a declaration alleging that Co was participating in the scheme, that he
solicited investors for the firm, and that he provided Aman a temporary business
permit. The majority of the investment occurred when Co granted the interim
authorization in mid-July, according to Coyme.
However, Co claimed that Aman was only given the temporary authority
to return the assets within the 60-day timeframe, not to collect money. Following
that, the Court of Appeals ordered the bank accounts of 23 Aman Futures
executives and associated firms to be frozen. Accounts in 25 banks and financial
organizations were affected by the decree.
On the other hand, on November 21, 2012, Co filed a case against Aman
with the National Bureau of Investigation (NBI), claiming that he lost ₱5 million
but stressing that no public funds were used. In the meantime, Department of
Justice (DOJ) has issued subpoenas to 44 Aman officers and members.
On November 23, 2012, two witnesses, both investors, came forward to
further implicate Co and his wife in the scam. They proceeded to NBI with a
paper trail that connected Co and his wife to Aman, including deposit slips to
accounts in their names. According to reports, Co opened an Aman branch in
Manila.
Five Aman directors surrendered to NBI on November 24, 2012, fearing
retaliation from enraged investors. Leilan Lim Gan, Eduard Lim, Wlanie Fuentes,
Noezelle Rodriguez, and Lurix Lopez were the five directors.
On November 26, 2012, the NBI filed a syndicated estafa case against
Co, his wife, and ten other people. The SEC also charged the firm's directors with
participating in fraudulent transactions and operating without legal registration,
citing Sections 8 and 26 of Republic Act No. 8799, the Securities Regulation
Code, in the timeline of events. As evidence, photos of Co with Amalilio were
added to the complaint.
The DOJ charged Co, his wife, and 10 other individuals with syndicated
estafa on November 28, 2012.
On December 2012, the appeal court ordered the freezing of 141 bank
accounts in connection with the schem, including 79 of Co's and 29 of his wife's
accounts.
It was on December 27, 2012, Fernando Luna, the president of Aman
Futures, appeared before the DOJ and revealed that he is simply Amalilio's
personal driver. He claimed he was introduced to Amalilio, who needed a
personal driver, but was taken aback when a box of documents was left for him
to sign one day. He went on to say that he later found out that Amalilio had
named him as the president of at least three Aman companies.
Manuel Amalilio was caught in Malaysia in 2013 after pleading guilty to
charges of falsifying travel documents. He was then set to be deported to Manila,
but Malaysian officials intervened and Amalilio was sentenced to two years in
prison in Malaysia.
Co's bail petition was dismissed by the lower court in 2015, claiming that
Co's position as Pagadian mayor was utilized to persuade the victims to invest
in the scam. Furthermore, it was Co who provided the company a temporary
business permit, and it was he who attempted to assist in the return of the
money to the victims, which the court viewed as collusion with the scammers.
However, the Court of Appeals Special 11th Division reversed the lower
court’s prior ruling on the couple.
According to the CA, the prosecution "failed to prove that petitioner
committed any overt act in furtherance of the alleged conspiracy.” Furthermore,
in the CA ruling, “The accusation that petitioner is a friend of the direct
principals does not constitute strong evidence that he had conspired with them.”
In addition, Co’s granting of the temporary business permit in favor of
Aman just shows that it fulfilled with the obligation of submission of the relevant
documentation pertinent to the application and nothing more. The court also
stated that the prosecution failed to present proof that the former mayor was
guilty of inviting people to invest in Aman Futures. Thus, in the end, Co and his
wife each paid ₱500,000.00 as bail.
Meanwhile, in 2014, the Philippine government failed to have the alleged
mastermind, Manuel Amalilio extradicted back to the country to face charges
related to the scam.