PIPC: Government regulators remiss in their duties

Government regulators

remiss in their duties

FAILURE OF S.E.C., N.B.I. TO PIN DOWN MICHAEL LIEW LED TO P.I.P.C. SCAM-SOLON

By Butch Fernandez

Reporter

THE chief investigator in the Senate’s on-going investment scam inquiry found that strategic government agencies, including the Securities and Exchange Commission and the National Bureau of Investigation have been remiss in their duties to check the proliferation of pyramiding, Ponzi and related investment schemes. Sen. Mar Roxas reached the conclusion after the first hearing on the alleged investment scam allegedly perpetrated by a Singaporean executive of the Performance Investment Products Corp. who is said to have absconded with $250 million of PIPC investors funds. The trade and commerce committee, chaired by Roxas, conducted the first hearing into the alleged PIPC scam on Wednesday based on separate resolutions filed by Sens. Juan Ponce Enrile and Loren Legarda. What emerged from the hearing, Roxas reported, was that several personalities led by a Michael Liew were already the subject of complaints from investors since 1999. “But because of the inability of government agencies to pin down Liew and his cohorts [right away], they were able to continue collecting money from unsuspecting investors using various company names the latest of which was PIPC. Appearing before Senate investigators, PIPC officers led by general manager Cristina Gonzales-Tuason, however, washed their hands off the scam, claiming they too were victimized and filed separate complaints with authorities when Liew fled with their money. According to Roxas, while the PIPC was registered as a research company, it actively sought prospective clients of investment products worth a minimum $40,000 each, with a promise of unusually high returns of between 12 percent and 15 percent annually. The Roxas committee also learned that these juicy terms attracted a number of gullible investors including members of the so-called upper crust of society. Testimonies by PIPC officials confirmed that these investments were then executed with Performance Products Investment Corp. in the British Virgin Islands (PPIC-BVI) which is not licensed to do such business in the Philippines. Briefing reporters after the hearing, Roxas said laws on investment products must be strengthened to guard against the proliferation of similar Ponzi scams. “What we saw on the first day of inquiry is that we lack the laws to combat defrauders in the country,” he said, adding that there are a number of remedial legislation that could be crafted to plug the loopholes. For instance, Roxas recommended that the SEC should take a more pro-active stance in dealing with complaints about irregular investment schemes. “The SEC simply says, “well, unless there is a complaint, we cant do anything about it.”

Investors “lost” $250 million in PIPC scam – Senate probe

09/13/2007

An estimated $130 million to as much as $250 million worth of savings by private individuals were “lost” in the so-called Performance Investment Products Corp. (PIPC) scam, the company that a number of prominent personalities poured their investments into, the minimum amount of which was pegged at P2 million each.

Initial findings during a hearing yesterday by Senate investigators yielded this information alongside the assessment that the firm allegedly designed a scheme to dupe hundreds of persons from the very start.

Sen. Manuel “Mar” Roxas II, chairman of the committee on trade and commerce, noted the apparent failure of governance by concerned agencies that led to the commission of one of the controversial investment schemse that could also be considered another form of so-called pyramiding plot.

“Any recovery of the money invested into this, I think is nearly impossible. I don’t think there’s anyone who can realistically expect recovery (of their money),” the senator told reporters after the hearing, adding Singaporean Michael Liew who owned PIPC could no longer be found since his reported disappearance last July after the controversy first broke out.

Roxas, however, said they would continue with the inquiry despite a seeming gloomy ending for the “victims” of PIPC as his panel is also considering taking up a similar case, that of the infamous FrancSwiss company that alleged to have engaged in pyramiding scheme.

“The hearings are not yet over, but we already saw there was a grand design to dupe people in our country. Corporations keep changing their names and they used many schemes to lure investors,” he added.

The senator stressed they expect that criminal cases will be filed with the appropriate agencies “but in the meantime, we will look for ways to prevent this from happening again by coming up with stricter laws.”

“There are indications of possible remedial legislation because the laws in the books right now do not reflect the kinds of transactions that are being promoted by these entities,” Roxas said, adding the Securities and Exchange Commission (SEC) is expected to adopt in the future a more proactive stance on matters concerning this kind of transactions.

The committee, in its first public hearing, learned that the PIPC, registered as a research company and alleged local subsidiary of PIPC-British Virgin Islands, was not allowed to engage in foreign exchange services or to deal with securities such as investment contracts.

Yet, it actively sought prospective clients of investment products worth at least $40,000 each, with a promised high return of 12 to 15 percent annually, the senator said.

In their devised scheme, Senate investigators were told that their transactions involved trading of so-called future derivatives either through dollar, euro, yen or pound currencies or precious metals such as gold.

Roxas said they were also told that not only one company is involved in this issue but many others, including those operating in other countries such as Japan, India and China, all commonly being owned by Liew.

He added the laws on investment products must be strengthened to prevent the proliferation of similar “Ponzi” scams.

Regulators, such as the SEC, must also take a more proactive stance for the public.

“We also look upon the SEC to adopt a more proactive stance. SEC simply says, ‘well, unless there’s a complaint, we can’t do anything about it.’ Of course, during the good times, the interests were high, no one is complaining. But when the time comes someone files a complaint, it’s too late, the alleged perpetrators are no longer to be found,” he added.

Angie M. Rosales

http://www.tribune.net.ph/nation/20070913nat1.html

Government freezes accounts of PIPC execs

Government freezes

accounts of PIPC execs

By Jun Vallecera

Reporter

Regulators have frozen the bank accounts of people with established links to the Philippine operations of Performance Investment Products Corp. (PIPC) and related companies in the British Virgin Islands, Hong Kong and Japan. The Anti-Money Laundering Council has frozen the bank accounts of whistle blower Cristina Gonzales-Tuason, PIPC incorporators Ernest Sy and Janice P. Silvestre and that of PIPC chairman and president Michael H.K. Liew, who absconded with the money. The value of the frozen accounts was not revealed, but the different accounts in 15 banks and financial institutions operating in the country were cited. These included accounts opened in Asia United Bank, the Bank of the Philippine Islands, Equitable PCI Bank, which has been folded into Banco de Oro (BDO) Universal Bank, the International Exchange Bank, the Metropolitan Bank and Trust Co., Rizal Commercial Banking Corp., Union Bank of the Philippines and the United Coconut Planters Bank. Also covered by the freeze order were accounts opened with HSBC Savings Bank, Citibank NA, Banco de Oro Private Bank, Pru Life Insurance Corp. of the United Kingdom and BDO. Of the estimated $138 million allegedly hoodwinked from up to 3,000 moneyed Filipino investors, only some $2 million remained intact, according to earlier reports.

Finger Pointing

When the house of cards fall… the finger-pointing begins.

Investment fund manager says she was victim, too
By Tina Santos
Inquirer
Last updated 06:23am (Mla time) 07/31/2007
DESPITE investors’ claims that it was she who enticed them to invest their money in the foreign exchange trading firm Performance Investment Products Corp. (PIPC), Cristina Gonzales-Tuason, the company’s general manager, insisted Monday that she, too, was a victim of the investment scam.

Accompanied by her two lawyers, Mario Bautista and Gener Ballesteros, Tuason appeared at the National Bureau of Investigation anti-organized crime division (AOCD) at 10 a.m. Monday. She, however, refused to answer questions from the media.

“She’s definitely a victim,” Bautista told reporters, adding that his client went to the NBI in response to the subpoena issued by the bureau last Tuesday.

“We wish we knew,” he said when asked if Tuason knew where Michael Liew, the Singaporean owner of PIPC who allegedly disappeared with at least $250 million of investor money, was.

“We were the ones who asked the NBI to look for Liew. We’re looking for Mr. Liew. He just disappeared with all the money,” Bautista said.

Oscar Embido, assistant regional director and chief of the NBI-AOCD, said Tuason inquired about the nature of the complaints filed against her by at least five investors.

Four of the five investors filed their complaints Monday. The fifth, a businessman in his 30s, lodged his charges last week.

“Ms Tuason asked for five days to file a counter-affidavit to refute whatever charges the complainants had filed against her,” Embido said, adding that he expected her to personally appear at the NBI again on Friday morning.

“She has to come because she has to give [her statement] under oath,” he said.

The NBI, meanwhile, has set up a public assistance center at a hotel to entice investors to come out in private and cooperate in the probe.

The center is in the Azure function room on the 8th floor of The Pearl Manila Hotel which is across from the NBI headquarters on Taft Avenue, Manila. Tel. Nos. are +63 2 4000088, local 3010 and 3011, and +63 927 4845883.

The center will receive complainants round-the-clock Monday to Friday, the NBI said.

“We wanted to provide a private space for investors who might want to but are hesitant to come out and speak up regarding their PIPC investments,” said lawyer Ruel Lasala, head of the NBI National Capital Region.

Lasala was quick to add, however, that the creation of an assistance center in a hotel was not meant to give the investors special treatment.

“Most of them were mum about the issue so we thought of a friendly approach. This is our way of encouraging them to cooperate with us,” he said. “Besides, they’re complainants, not suspects.”

Reynaldo Esmeralda, NBI deputy director for regional operations services, said the center’s expenses will come from the bureau’s intelligence fund.

At the Senate, Sen. Juan Ponce Enrile wants the chamber to investigate PIPC in aid of legislation “to determine the machinations used by PIPC to perpetrate its scheme and circumvent the law.”

In a resolution he filed Monday, Enrile said PIPC had illegally engaged in foreign exchange trading even as it was registered with the Securities and Exchange Commission for the last nine years as a “research company.”

Enrile said the Senate would look into the “alleged illegal investment syndicate involving the PIPC which has caused losses of millions of dollars in foreign exchange trade, with the end in view of recommending remedial measures to protect the investing public.”

With a report from Dona Z. Pazzibugan

More PIPC scam victims flock to NBI

http://www.businessmirror.com.ph/07252007/headlines09.html

By Joel San Juan

Reporter

MORE victims of a new multimillion-dollar financial scam are now surfacing before the National Bureau of Investigation (NBI) in a bid to file a class suit against the incorporators of Performance Investments Products Corp. (PIPC), accused of foisting an investment scam. Lawyer John John Felipe, who is representing five of the complainants against PIPC, said many victims plan to join the class suit being poised against the Singaporean owner of PIPC, identified as Michael H.K. Liew and its general manager, Cristina Gonzalez-Tuason. However, Felipe asked mediamen to withhold the names of his clients until an official complaint is lodged with the NBI. Felipe accompanied some of the victims to the NBI office in Manila to seek help in investigating PIPC’s business transactions, and in recovering the money they invested in its foreign exchange trading scheme. The lawyer said PIPC may be held liable for “fraudulent misrepresentation” since it is only registered with the Securities and Exchange Commission (SEC) as a research company. “We want to find out if this company is really allowed to engage in foreign-exchange trading and to recruit people to invest in its business scheme,” Felipe said. Felipe noted that PIPC started circulating information that its investors’ funds of more than US$250 million was missing, and could have been diverted by Liew to his personal accounts in other countries only after authorities unearthed the illegal online pyramiding scheme perpetrated by Francswiss. “At the height of the Francswiss scandal, a great number of PIPC investors started pulling out their money from the company; after several days Tuason reported that Liew is missing along with the investors’ money,” Felipe added. NBI Interpol supervising agent Dominador Villanueva III also admitted that well-known law firms have called up his office to inform him of possible filing of suits against PIPC incorporators. “Some of the investors have apparently tapped big-time law firms to represent them. We are just waiting for them to come here and pursue the filing of charges,” Villanueva said. Under the scheme, investors were required to shell out a minimum of US$40,000 with a promised 12 percent to 15 percent return on investment annually. Those who could not produce the minimum amount were allowed to have partners in order to produce it. Many are residents of posh Forbes Park and Dasmariñas Village in Makati City. The PIPC has asked the investors to attend a general meeting this Thursday at Citibank’s office in Makati City.