‘Investors kept coming despite warnings from insiders,’ says source

MANUEL AMALILIO: Suspected mastermind disappears. CONTRIBUTED PHOTO

PAGADIAN CITY, Philippines—Weeks before Aman Futures collapsed, employees of the firm warned investors to withdraw their cash placements as soon as they matured in order to avoid the inevitable — losing their money forever.

An Internet cafe operator, who asked to be identified only as Andres, said he had plunked in P200,000 in a 20-day placement and his contact among Aman Futures’ staff hinted that something bad was about to happen.

Andres said his contact had told him that a local politician had withdrawn P19 million in principal and interests some time in August.

Another source identified the local politician as Pagadian Mayor Samuel Co. Co had admitted investing in the scheme and losing about P5 million.

Pagadian Business Chamber president Mercedes Lourdes Quisumbing said they had information pointing to  placements made by other politicians, who might have been trying to raise funds for the 2013 electoral campaign.

“He [the contact] convinced me that the withdrawal should be a signal that things were going wrong or were bound to go wrong,” Andres said.

Generoso Bayawa Jr. said the signs were glaring as even Aman staffers were already trying to convince investors to pull out their money. But Bayawa, a local government employee, said the absence of a timetable when the bust would occur pushed investors like him to “try our luck even further” in order to optimize earnings.

“Looking back now, it was quite unbelievable that these warnings, coming from insiders, were unheeded,” Bayawa said.

Employees at the Aman Futures’ office in Barangay Kawit lived in the village and were mostly relatives of Fernando Luna, one of the directors of the firm that has passed itself off as a commodity futures trading company although the authorities said it was engaged in a Ponzi scheme, a racket in which early investors are promised high returns on their money that will come from later investors. Eventually, as more and more returns become due, less and less investments come in.

The warnings, which indicated the state of Aman Futures’ operations, started around August, according to Bayawa. But investors, he said, were mindful only of stories about fellow investors who had made more money from their placements.

Because he also failed to heed the warnings, Bayawa said, he lost some P1.8 million in the scheme that Aman Futures ran.

“We did not believe in the gloomy details because we were fixated on making the most out of the scheme,” said Bayawa, also a relative of Luna’s.

Besides, the sheer number of people placing their money in the Aman office in Kawit belied the warnings, he said.

The Kawit operations appeared to be unending as throngs of people flocked to invest money in the firm everyday, Bayawa said.

A day before it actually closed shop, Aman Futures accommodated a large crowd of investors through its “VIP lane,” which was intended for big clients, several Kawit residents said.

Some of them recounted seeing two pickup trucks unloading “fully loaded sacks,” believed to contain money. “What else would those (sacks) contain?” said one resident.

To lessen the queues, Bayawa said, Luna advised registered account holders to pool funds by giving premium rates to minimum placements of P100,000 and much higher rates for P1 million.

The last call for cash out inside the Kawit office of Aman Futures was for placements that fell due on September 25.

Around 3 p.m. of September 26, Aman Futures declared a stop to the transactions.

Aman staffers said there was an impending raid on the compound as the company’s business permit had not been renewed.

To avoid being arrested, Aman Futures employees, who were seen hurriedly leaving, told those waiting in line to cash in their investments to hand in their claim receipts. Many investors immediately obliged.

Quisumbing said the closure of Aman Futures indicated it had reached the saturation point.

“This is the stage in a racket when the timing and rate of funds inflow is outpaced by the amount of repayment obligations,” she said.

At this time, the racketeers would simply disappear with the cash placements in tow.

Quisumbing said she initially estimated the saturation point to be at P1 billion. She said that this stage was reached by Aman Futures as early as April or May.

Co said the original permit granted to Aman Futures was canceled around April after the local government found out it had no license to undertake investment pooling since its license was only for general trading activities.

It was also around this time, Quisumbing said, that she  asked the local government to take action against the operation, which she already branded as a Ponzi scheme.

But the city government gave the firm another permit. Co said this time, it was intended to keep the firm in operation so it could pay its clients.

At this time, the registration of Aman Futures, which the Securities and Exchange Commission eventually granted, was still pending.

Sources within the business community told the Inquirer that the meddling of some city councilors weakened the local government’s resolve to crack down on Aman Futures when it was still possible.

The city councilors clearly didn’t want to disappoint the people taking their chances on the scheme especially as 2013 was nearing, Inquirer sources said.

In Zamboanga City, Pedro Rufo Soliven, president of the Zamboanga Chamber of Commerce and Industry Foundation Inc. (ZCCIFI), told the Inquirer that because investors in Aman and two other similar companies had nothing to support their claims, its operators could easily skip prosecution.

“There is no probable cause (to support cases filed), no signed contract, no product endorsed or produced, so how could an investor pin down the operator? Charge to experience na lang,”

Soliven said, commenting on reports that Aman investors turned in their receipts to the firm’s staff before the shutdown.

Senior Superintendent Edgar Danao, chief of the Criminal Investigation and Detection Group in Western Mindanao, said more than a hundred complainants have manifested their intention to file charges against the operators and officers of Aman Futures.

“Majority of them are members of the police force and of the business community,” Danao said.

Soliven said while he pitied the investors, they had only themselves to blame for the success of the scam.

“Human greed makes you lose your sight of reason, your sight of rationality and logic because of the reward you want to get from this get-rich-quick scheme, which is actually a scam,” Soliven said.