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DOJ Issues Advisory on Business Scams
February 13, 2004
Justice Secretary Ma. Merceditas Gutierrez today warned the public against investing in questionable investment firms that promise a high return of profit.
"With the large number of complaints against pyramid scams lodged before the DOJ, the public must be warned against unscrupulous individuals who prey on innocent people eager to get a high profit in their investments," Gutierrez said.
Despite recent closures of firms engaged in investment scams, a few remain and wait for their chance to operate surreptitiously, she added.
The following tips, she said, can help people spot fake investment firms and avoid becoming knowing and unknowing victims of business scams :
- People close to you come to persuade you to chip in money, so that a large amount could be invested in these fake investment firms. These firms promise big returns - as much as 75% annually. No bank or commercial establishment can possibly match this almost impossible yield, not even the most successful. But to erase doubts about them, once you give them your money, they usually issue a postdated check for the principal, and a few postdated checks for the interest.
- They will allow one or two checks to be good. Afterwards, the investors begin experiencing delays until no more payments are made. Since all or some of the remaining checks are postdated, you cannot deposit them yet and get your money or even cause these checks to bounce. This gives the fake investment firms time to close their offices and for their key officers to flee. In the meantime, the investors might even have re-invested the principal they already got from the firms, causing them to become victims twice over.
Here are things one can do when he becomes a victim:
- Immediately deposit all checks that came from these firms which have already matured. Immediately deposit any remaining checks as they mature. Under no circumstances must you allow any matured checks remain in your possession for more than 90 days after maturity, without depositing them and making them bounce.
- Try to find out where these firms' key executives live, including possibly their provincial addresses. This is to enable subpoenas from prosecutors and summons from the courts to bypass their offices which they are surely going to close anyway. When you suspect that any firm you are dealing with engages in investment scams, immediately call the DOJ hotline 5238481 loc. 401 or the DOJ Action Center with telephone no. 5216264 and be ready to make a sworn statement.
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