In 1998, Rosario A. Baladjay or simply called ‘Rose’ to her colleagues and business associates registered her company, the Multinational Investors Corporation (Multitel) with the Philippine Securities & Exchange Commission as a lending investor company which under the SEC rules should only provide up to a maximum of 19 lenders only. This safeguard was done as a ruling by the SEC to discourage the company to operate under the illegal pyramiding scheme.
The Multitel multiplication.
As early as 1988, Baladjay initially enticed participants to the organization to each invest voluntarily from Php2,000($45) up to Php10,000($222) from its investors at the prevailing interest rate return of 1.08 monthly or 12 percent per annum with purpose of lending the accumulated money to businessmen at 2.5 percent a month or 30% per annum. The investment becomes an instant boom and investments to Multitel was exploited and amassed. Baladjay was able to accumulate as much as Php100 billion or roughly around $2.5 billion from nearly 2 million participants during the term of its business.
The Multitel‘s Double Your Money’ scam.
Multitel investments used the Ponzi scheme approach of “pyramiding” fraud wherein Multitel operated in which original investors being the top investors recruits other people as their downlines. Top investors recoups their invested money from the investment of their downlines. Most of the money gains and the only way a participant can recoup their investments was to sign up more people into the organization. But once recruitment stops, the investment recouping system will eventually collapse and by such time, those at the top of the pyramid have already recouped their investments leaving the rest below their lines to lose most of their money investments. The mathematical odds on the certainty of the pyramid’s collapse on this type of pyramiding scheme was greater. Losing investment money and recouping invested capital for the downline participants would most likely result in losing rather than gains. Therefore, the chance of losing invested capital in this kind of pyramiding scheme is almost inevitable.
The Multitel flock.
With the promise of the ‘Double Your Money’ gains and fast return of their investments, Baladjay was able to attract her flock of investors. With the launch of the ‘Double Your Money’ scheme, an equally attractive guaranteed package return on the investment at the interest rate of 4 to 5% monthly gains which was later raised to 60% per annum whereas regular prevailing baking interest rate was only 12% per annum have enticed participants to invest more. The investment becomes an instant boom and investments to Multitel was exploited and amassed. Baladjay was able to accumulate as much as Php100 billion or roughly around $2.5 billion from nearly 2 million participants during the term of its business. Many of those duped in the scheme were low-income bracket individuals as well as celebrities, overseas workers, members of religious associates, government employees and other influential people who aimed to get their investment to easily gain and multiply.
Another attractive scheme that Baladjay use to duped and entice investors was riding with the boom of telecommunication in the country at that time. Big companies like Nokia, Motorola and other telecoms company were exploited as subject of the Baladjay scam. Exploring her luck in duping people to her company, Baladjay using the alibi of investing in Benefon, a competitor of Finland’s Nokia hooked her scamming business during the boom of the telecommunication industry in the country.
The Multitel crack.
But the Benefon project halted its operation when a case of syndicated estafa was filed against Baladjay and her incorporators in her Multitel company before the Makati court in the Philippines. The Philippine Securities and Exchange Commission (SEC) have issued multiple cease and desist orders to Baladjay and her companies but Baladjay continued to ignore these warnings.
In March of the year 2003, a court handed down a warrant for her arrest resulting from violation of the bouncing check law. She was nabbed in her home province, Mangaldan, Pangasinan, a province north of the Philippines. Since then, other suit and cases followed emerging from different parts of the country. So big that it reaches the Philippine senate to probe on it. The blown up cases resulted in death threats against her prompting the Senate officials to hold her in their custody during the process of the Senate probe. The case was uphold by the Senate and strengthened her cases with no bail recommended.
And in line with the Philippine government’s effort to haunt down scammers and pyramiding initiators that crippled the lives of the people and affect the country’s economy as a whole, the Baladjay case was intensified. With no bail for her multiple cases of estafa, Baladjay was now currently detained at a women’s correctional facility in Mandaluyong City, Philippines. Upon the promulgation of the guilty charges in the court in Makati City, Baladjay and her cohorts were sentenced to 7 to 21 years of imprisonment or a fine of Php5 million for each of their cases or both.