Bangkok Post: Walls are closing in on ‘pyramid schemes’

Authorities have urged aggrieved parties to come forward and file complaints against suspects in the scandal The iCon group as investigations continue into allegations that he executed a pyramid scheme.

Although 18 suspects, including the company’s CEO and founder, have been arrested, the fraud scandal, one of the biggest in recent years, will not be the last, as pyramid schemes and other schemes of Fraudulent investments are still thriving, according to the authorities.

Despite the well-documented risks and repeated warnings from law enforcement, many continue to fall prey to scammers because they are lured in by the promise of quick and easy money.

In a pyramid scheme, members are often promised large profits for recruiting new members. It is often structured to channel money put in by new investors to previous participants.

It is designed to appeal to people’s greed and desire for financial gain, offering a high return on investment, with little or no effort required from the investor.

Many pyramid schemes are often disguised as multi-level marketing (MLM) businesses or other legitimate investment opportunities.

“Scam in Disguise”

Kosolwat Inthuchanyong, director of the Legal Aid and Rights Protection Office of the Office of the Attorney General (OAG), told the Bangkok Post that pyramid schemes disguised under the guise of direct selling have existed in the country for a long time of time

“They respond to people’s greed and offer hope to people who are struggling with today’s economic hardships,” he said.

He said many of the victims include unsuspecting retirees or senior citizens who were conned out of their hard-earned life savings by disguised pyramid schemes.

Scammers, many of whom are famous, often use charm, social status and even fake credentials to build trust with potential victims, he said.

Asked whether any laws should be amended to keep up with the current circumstances, he said the existing laws are adequate to deal with fraudsters.

“But some older investors also need to know their limitations. They need to consider whether they are up to the demanding task of recruiting new members (in pyramid schemes disguised as MLM businesses),” Kosolwat said. “Some investors got angry when someone warned them about the potential risks.”

He said agencies tasked with protecting victims’ rights include the Office of the Consumer Protection Board (OCPB), the OAG’s Office of Legal Aid and Protection and the Department of Defense of Rights and Freedoms of the Ministry of Justice.

Kosolwat also said fraud victims who lost their money in pyramid schemes in the past had little chance of getting it back.

Many received only small sums of their money.

However, the current anti-money laundering law empowers the Anti-Money Laundering Office (AMLO) to move quickly to freeze assets belonging to fraudsters while using modern technologies to track and freeze the online money trail , he said.

“Even if the scammers move the stolen money abroad, Thailand has international agreements with other countries to help victims,” ​​he said.

“In the past, victims didn’t get a lot of money back.

“In recent years, the amount of money they have recovered is relatively greater. But it is still not worth it, compared to the huge losses,” he said.

“Victims should step forward and lodge complaints at police stations across the country,” he said.

National Police Chief Pol Gen Kitrat Phanphet has instructed the Metropolitan Police Office and the nine provincial police regions to set up whistleblowing centers to help victims of The iCon Group fraud scandal.

Until Saturday, a total of 2,910 people had filed complaints against the iCon Group, according to the Central Bureau of Investigations (CIB).

Celebrities under scrutiny

Warathaphon “Boss Paul” Waratyaworrakul, founder and CEO of The iCon Group and prime suspect in the scandal, was remanded in custody in Bangkok along with 17 other suspects after the Criminal Court approved a detention request on Friday police officer

The 18 suspects, some of them famous, were wanted on charges of collusion in public fraud and entering false information into a computer system. All denied the allegations.

All were taken to jail after the court rejected bail applications by three high-profile celebrities, citing flight risks, while the others did not apply for release.

The three celebrities are actor Yuranunt “Boss Sam” Pamornmontri, actress Pechaya “Boss Min” Wattanamontree and TV host Kan “Boss Kan” Kantathavorn.

The suspects, referred to as “bosses” within The iCon Group’s marketing hierarchy, were arrested on Wednesday following numerous allegations of fraud.

Victims reported that the company lured them with online marketing courses costing less than 100 baht and pressured them to commit financially, resulting in substantial losses.

Saree Ongsomwang, secretary general of the Consumer Council of Thailand (TCC), said The iCon Group was registered as a direct marketing business, not a direct selling company.

“But what the company has done is direct selling. So it is against the law,” Ms Saree said.

“The company’s distributors invested 250,000 baht each to buy products of the same value. But some victims said the number of products did not match the order placed.

“Does this mean that the products and direct selling strategy were used to disguise (a pyramid scheme)?” said Mrs. Saree.

He urged state agencies to look into the money trail of the company’s distributors and see if the business is focused on recruiting members rather than selling products, which could be considered a pyramid scheme.

“The money trail of the celebrities (working for The iCon Group) should also be examined. Any of their ill-gotten gains should be returned to the aggrieved parties,” Ms Saree said.

He said celebrities are influencers as they have people’s trust. They should be cautious and avoid getting involved in any public fraud.

“A lot of people tend to believe what they say,” he said.

He also expressed concern about fraudsters who seek help from some state officials in exchange for under-the-table money to ensure their businesses run smoothly.

The government should step in to investigate and punish these officials, he said.

“Motivated by greed”

Lt Col Krisanaphong Poothakool, associate professor of criminology and vice-president at Rangsit University, said it was important for police investigators to find evidence of the company and the suspects who recruited new members.

“The key point is for the police to prove that the suspects recruited new members rather than selling products as they claimed,” he said.

“As long as people are motivated by greed and a strong desire for quick and easy money, similar scams will occur in the future and more people will continue to be duped,” he said.

Victim’s account

A 61-year-old victim who asked not to be named said she learned about the company’s business from a TV show during the Covid-19 outbreak a few years ago.

During the show, Warathaphon heard about the company’s online marketing course that cost only 97 baht, so he decided to try himself and contact the company, he said.

After an online orientation session, she said she paid more than 250,000 baht to apply to be a distributor for the company and buy the products after people who were above her, also known as uplines, assured him that he would earn hundreds of thousands of baht.

She first tried using the products herself to test their qualities, but it turned out the products weren’t as good as advertised, so she didn’t sell them to others, she said.

He tried to return products to higher lines only to be rejected, he said.

They told him the only solution was to recruit new members and share a percentage of their recruits’ sales, he said.

Sopon: The company faces thousands of complaints

Kosolwat: Investors must know their limitations

Sari: Investigators must follow the money trail

Krisanaphong: People will continue to be deceived