MANILA, Philippines -- A special cybercrime unit of the Philippine National Police has started tracking down the perpetrators of the ?Francswiss? online scam, one of the Internet-based ?Ponzi? investment schemes.

A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high, short-term returns to investors out of the money raised from new investors, rather than from profits generated by any real business.

?We are starting with the website to track down suspects. Even if it is down, there will be footprints through IP addresses,? said Chief Supt. Rodolfo ?Boogie? Mendoza of the PNP Directorate for Investigation and Detective Management (DIDM).

He said the PNP was capable of conducting a computer forensic investigation.

Already, the PNP Criminal Investigation and Detection Group (CIDG) has a cyber unit that is tapped by the DIDM, he said.

The new scam lures unsuspecting victims over the Internet using the websites http://www.francswiss.biz/ and http://deutchfrancs.com.

Prospective investors are asked to invest $1,000 in francswiss.biz and $10,000 in deutchfrancs.com that promise to double their money in 22 days.

?We are currently looking into it and we have issued an advisory,? Securities and Exchange Commission Chair Fe Barin said.

Besides francswiss, the SEC has identified other Internet-based Ponzi investment schemes -- Swiss Cash, Universal Forex System, Global America and Private Forex Trade Inc.

Proliferating

Gov. Amando Tetangco Jr. of the Bangko Sentral ng Pilipinas earlier said the online scam and other ?high-yield investment programs? proliferating on the Internet were gaining popularity in the Philippines.

?It?s happening in Baguio, Pampanga, and even big groups are being wooed. We don?t know who the people behind these scams are but we are trying to figure out how to crack the code,? said Hubert Guevara, SEC compliance and enforcement department director.
Guevara said in his public notice posted on the SEC website (http://www.sec.gov.ph/) that the agency had received reports that these groups were engaged in a pyramiding scheme.

Fake SEC certificate

These entities are not registered with the SEC and have no permit or authority to solicit investments from the public, the commission said.

Private Forex Trade Inc. in particular, has been found to be misleading the public by showing a fake SEC certificate of registration on its website.

?We?re coordinating with other agencies such as the National Bureau of Investigation, and the Anti-Money Laundering Council, and our international counterpart agencies to catch operators. There are leads but the agencies are keeping them close to their hearts,? SEC secretary Gerard Lukban said.

The SEC started its probe a few months ago after receiving complaints from the public.

Lukban said that if the agency could trace the ones propagating the operations, then the SEC could penalize them for violating the Securities Regulation Code (SRC). The violation carries a maximum imprisonment of 21 years.

Two-pronged

Mendoza said the PNP would coordinate closely with the SEC in the investigation. He described it as a ?two-pronged? approach.

?We will conduct the cyber investigation and at the same time the physical investigation in which we will be taking down statements of victims and assessing the information they will be giving us,? Mendoza said.

He appealed to other victims of the ?Francswiss? scam to come out and lodge a complaint with his office.

It was the PNP?s special cybercrime unit that busted a telecommunications fraud syndicate in the country in March. The syndicate was involved in hacking into PABX systems in the United States and stealing telephone numbers. The numbers, which can be used to make overseas calls for free, are then sold to international buyers.

Features of scheme

Mendoza said the PNP was working to increase its capacity to investigate large-scale Internet fraud perpetrated by ?corporate criminals.?

The SEC listed some of the features of an Internet-based Ponzi investment scheme.

? No SEC registration.

? Investment in foreign currency, preferably in US dollars.

? Offers or guarantees a huge profit in a very short period.

? Uses a binary network to earn commissions.

? No paper trail such as contracts and receipts.

? Promises little or no financial risk.

? Provision for a lock-up period where an investor cannot touch the investment in 60 days, for instance.

? Assures payoff investments in a short time.

? Uses high-pressure methods to convince investors to reinvest their earnings.

? Unknown principal office, address, founders, directors or officers.

? Orientation seminars are conducted informally.

This type of investment scheme ordinarily collapses as fast as they are created while investors are left unable to recover their money, according to Guevara.

?The public is therefore urged to report any offer of investment made by persons who represent the above mentioned entities or other entities using similar modus operandi to the undersigned in order that the appropriate enforcement action be taken,? Guevara wrote in a warning to the public.