Manuel Amalilio
PAGADIAN CITY—The Aman Futures Group, which claims to be involved in the arcane business of commodity futures trading, operated from the most unusual of places—the declining mangroves of coastal Kawit village here.
The company, which declared a Pasay City location as its principal business office, rented a fenced residential compound beside the main road that is being developed as an alternate route to the Pagadian airport.
There, Aman Futures ran its investment solicitation operations.
Its immediate neighbors were mostly urban poor folk whose economic life revolved around fishing and manual labor in the city center, which is more than a kilometer away.
Aman Futures formally opened its doors to the public in February. At the time, it had a pending application for registration with the Securities and Exchange Commission (SEC).
Instead of having a grand launching to attract the attention and interest of the moneyed, Aman Futures issued its invitations to its poor neighbors.
‘Economic messiah’
Investors interviewed by the Inquirer said the company, from the very start, portrayed itself as some kind of “economic messiah” by promising “very nice returns for the investments of the poor people” of Kawit.
“This is the reason many people still believe the scheme was really intended to help the poor,” said Generoso Bayawa Jr., a local government employee who lost money in the scam.
In Kawit, new houses have mushroomed in the immediate neighborhood of the Aman Futures office, evidence of their windfall. But residents in neighborhoods further away, usually middle-class families, mostly have tales of losing in the investment racket.
“By that, you can tell that Aman’s neighbors were the early birds because they got the windfall,” Bayawa said.
The company also had varying answers to questions about how it raised the revenue to fund its promised returns. But the usual answers the people got were that the company was involved in petroleum, mining, stock trading and oil palm businesses.
Company officials running the Kawit operations also portrayed its chairman, Manuel Amalilio, as a financial wizard.
When the capacity of Aman Futures to pay out the investments was questioned, one Kawit resident recalled that an employee retorted that “Amalilio is surely far richer than most of us because he earns money round the clock.”
The first investors were fish vendors and motorcab drivers. Sources said a Christian denomination later became a major investor after Amalilio promised its pastoral leaders he would help them build a church and fund their missionary work.
To place an investment, an investor had to fill up an investor registration form, show an identification card, and then line up for processing.
There were four transaction windows manned by tellers, just like in a bank, the investors said. The transactions were mainly classified into first-time investments, add-on, reinvestment and cash-out.
Registration was required for first-time investors. Add-on referred to a transaction whereby an investor puts in more money to a placement plus interest that became due and demandable.
Reinvestment meant the entire placement, including interest, is plunked down again for a new investment term.
Cash-out was further classified into “cash-out all,” meaning the entire placement and interest due is withdrawn, and “partial cash-out,” which occurs when only a portion of the entire amount due is taken and the balance placed in again for a new investment term.
At first, registered investors were advised to deposit cash into certain bank accounts maintained by Aman Futures. The deposit slip was then brought to the Kawit office so that the investment could be formally recorded.
Aman Futures then issued a receipt acknowledging the investment placement and handed out a postdated check that could be exchanged for cash on a date corresponding to the time the returns were due.
The practice of issuing postdated checks was later scrapped, “obviously to avoid a paper trail that can be used for legal pursuits,” said Mercedes Lourdes Quisumbing, president of Pagadian City Chamber of Commerce and Industry.
Quisumbing said she first stumbled on the racket in mid-February when she discovered an unusual throng of fish vendors depositing money in a local bank. “I thought, at first, that the swelling customer volume was a result of a good marketing program until someone from the bank told me the real score,” she said.
Ramadan special
Aman Futures started with eight-day cash placements and later developed schemes for 14-day and 20-day placements.
Bayawa, who holds a banking and finance degree and who started investing in May, said the interest rate for eight-day placements peaked at 41 percent.
Interest rate for 14-day placements peaked at 86 percent when Aman Futures announced a “Ramadan special” in the last week of July. The 20-day placement, which was mostly offered at about the time the scheme collapsed, pitched a high of 67 percent.
When Aman first started, there was only one designated day of the week when Aman Futures would take in investments. It then opened its doors the next week for the cash-out. But later, as more people became interested in putting in their money, transactions became daily.
Quisumbing said that based on her study of the racket as early as March, she concluded that it was a Ponzi scheme. She then alerted the local government and the Department of Trade and Industry (DTI).
In a Ponzi scheme, Pedro’s money is used to pay Juan a high return, attracting additional investors. When the money coming in cannot meet the payments due Pedro and investors down the line, the scheme becomes unsustainable and collapses.
Quisumbing explained that she examined the earnings potential of various securities investments and compared these with the returns offered by Aman Futures.
This was to determine its capability to give as much interest, assuming the company really invested in these securities, she said.
But the offered rates of return were unbelievable, she said.
As early as April, the DTI already warned the public, through local radio stations, against placing investments with Aman Futures.
But this fell on deaf ears. If anything, Aman Futures’ volume of business radically shot up. Long queues of people began to be seen outside the company’s Kawit office.
Quisumbing said the collapse of the Marawi-based Jachob “Coco” Rasuman Investments, a similar Ponzi scheme, also helped fuel business for Aman Futures.
“Those who lost in Coco could have wanted to recoup their losses through Aman,” she said.
At its height from May to August, people would start lining up in Kawit for the first-come-first-served opportunity as early as 1 a.m.
This was also the time when former fish vendors and motorcab drivers could be seen already driving SUVs.
“The skeptics became instant converts,” Bayawa said.
On a vacant lot near the Aman Futures office, a makeshift tent was set up to house the waiting investors. Small businesses mushroomed around it like food, chair rental and “comfort room” service.
As investment solicitations grew, the company hired security personnel, to manage the long queues.
At least five policemen were also regularly stationed in the area. Sources said each policeman was given a P2,000 allowance by Aman Futures.
By this time, the banks no longer allowed deposit transactions for Aman Futures, which forced the company to take on this phase of operations, bringing in huge crowds to its Kawit office.
Quisumbing said valued clients of the banks may have complained over the delays in transacting business with the bank.
She quoted sources from the banking community as saying that the money deposited into the account of Aman Futures did not stay in the bank for long. It was withdrawn someplace else.
As the queues grew denser and the waiting time longer, accidents happened like the deaths of an old woman who suffered heat stroke and of a man with kidney ailment, Bayawa said. “These are incidents that Aman Futures successfully covered up,” he added.
Amid the investment frenzy, it was striking that Aman Futures was able to instill a “discipline of silence” among its investors.
Those who complained were threatened with being “washed out” as an investor. This meant being forced to cash out all placements, including interest and then banned from making new placements.
“The prospect of losing the opportunity to earn more money scared the people. This should explain why many of them are still mum about the scam, thinking they can still recover their investment losses,” Bayawa said.
Originally posted: 9:51 pm | Sunday, November 18th, 2012