October 13, 2004

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Ponzi in HK

In these days of spam and emails from Nigeria promising riches, it amazes me that Ponzi (pyramid) schemes still occur. The biggest example in modern times was in Albania, where such a scheme lead to the collapse of the Government and near civil war. But that was dismissed as ignorant, backwards Eastern Europeans out for a fast buck. However there is currently a court case in modern, prosperous Hong Kong prosecuting a similar scheme.

From the SCMP:

A transport worker said yesterday he had parted with almost two months' pay to join a pyramid investment scheme after he saw people waiting in a queue that stretched 18 floors...He was giving evidence on the second day of the trial of four men accused of fraud in what has been described as Hong Kong's biggest pyramid-selling case. The court has heard that it involved $7 billion and 14,000 victims, and returns of up to 3,300 per cent were promised.

Mr Au said that he was told he only needed to contribute $11,000 to reap net returns of about $140,000 14 months later. He bought two shares in the company's Plan D, paying $7,188 on September 5, 2000 and $7,000 two days later. At the time he was earning $9,500 a month. He said he was told to pay an extra $2,000 on October 9 the same year to complete all payments due, in the hope that the money would automatically accumulate without any further action on his part.

If it's too good to be true, then it usually is. Obviously greed is a trait that can overrule even the most "sophisticated" people.

posted by Simon on 10.13.04 at 10:28 AM in the




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Comments:

yet you think they're ready for democracy?

posted by: giles on 10.13.04 at 06:09 PM [permalink]

Even Albanians still have the vote.

posted by: Simon on 10.13.04 at 06:17 PM [permalink]

exactly. look where it got them!

some people just aren't ready for it. look at America for another example.

posted by: giles on 10.13.04 at 06:46 PM [permalink]

Maybe we should let the Albanians run America?

posted by: Simon on 10.13.04 at 06:48 PM [permalink]

i thought they already did?

posted by: giles on 10.13.04 at 07:17 PM [permalink]




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