The banking superintendent warns…


Beware: this video promotes a scam / Cuidado: este video promueve una estafa

The banking superintendent warns
and we should read more into it

by Eric Jackson

On September 9 Panama’s Superintendency of Banks issued a warning about an apparent Ponzi scheme with several names, perhaps the most common Flor de la Abundancia. but also El Telar de Mujeres and other names. The terse one-page announcement noted complaints in other countries and advised that this operation has no permit from the superintendency to collect money in Panama. There were no details about who is or was running this outfit here or any physical address or contact data — let alone whether there was any link to a corporate entity and if so any data on that or the lawyers who organized such a corporation. Nor were potential victims warned of places where the scheme is promoted online. In keeping with norms not only of the banking superintendency and the securities markets superintendency here, but also their counterparts across the region, there was also nothing about anybody having been arrested or being sought by police.

The custom in Panama has been for police, prosecutors and regulatory agencies to look at frauds committed against foreigners — by persons or entities within or outside of Panama, against persons inside or outside of Panama — as laughing matters rather than criminal cases. Here the warning has gone out because Panamanians, particularly Panamanian women, are the targets.

This particular pyramid scheme is different from most in that it’s a cyclical operation designed to spin off new organizations, which are apt to take on different names and have different people — or apparently different people — at their center. That form of organization has given the scheme more longevity than the usual pyramid, in which ever more new people are drawn in to put in money that pays earlier “investors” and especially the original promoters, until the day come when their is a deficit of suckers and the scheme collapses of its own weight with the promoter long gone. This particular scheme was first identified in Barcelona a decade ago, has swept across and up and down Latin America and has been late arriving in Panama, or at least its search for victims has come here late.

(Russian mob families, members of the Spanish royal family, shady real estate developers and other denizens of the financial crimes underworld have long made the Barcelona area one of their preferred habitats. Some of these have been known to launder money in Panama or to use international money laundering shell games designed by Panamanian law firms. Until recent years it seems that the Russians would launder money here but would not directly participate in the Panamanian rackets. Now, however, they are players in the local prostitution and human smuggling scenes.)

In any case, in its sweeps around Latin America this particular scheme prompted public disturbances in Colombia in 2008. There in the southern town of Buesaco a personero believed to be in league with swindlers he was supposed to be investigating was shot and killed.

About a year ago the scheme appeared in Mexico and since then it has been exposed on a CNN website and in the magazine El Economista. The headlines have not included the arrest of any the operation’s major figures. The typical pitch is that one puts $100 into the scheme and gets $800 out of it, so it would seem to be a no-brainer for one or more law enforcement agencies to pony up a hundred bucks and try to follow that money. The apparent regional law enforcement consensus is that to be taken for a c-note makes you a pendejo rather than a citizen who ought to be protected.

The art has advanced since the days of Charles Ponzi, when there was no Internet. There are standard old themes like affinity pitches — in this case to women with a bit of money to lose but few real prospects of ever getting rich. There is the old standby of pseudo-religion, with Bible passages and yoga terminology and symbolism invoked here along with the abundant life buzz words of the Prosperity Gospel pitch. But this swindle also uses YouTube (see the video above) and Facebook, and naysayers are apt to face various sorts of online bullying.

Beware, of course. But maybe there should also be some concern about roles that range from apathetic to enabling on the parts of some powerful public and private institutions.


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