US Securities and Exchange Commission on Pyramid Schemes
the classic pyramid scheme, participants attempt
to make money solely by recruiting new participants into
the programme. The hallmark of these schemes is the promise
of sky-high returns in a short period of time for doing
nothing other than handing over your money and getting others
to do the same.
The fraudsters behind a pyramid scheme may go to great lengths
to make the programme look like a legitimate multi-level
But despite their claims to have legitimate products or
services to sell, these fraudsters simply use money coming
in from new recruits to pay off early stage investors.
But eventually the pyramid will collapse. At some point
the schemes get too big, the promoter cannot raise enough
money from new investors to pay earlier investors, and many
people lose their money.
local Securities and Exchange Commission has opened a file
on Fantasy Tours, the popular money collection scheme, based
Following an enquiry from an investor on Friday, the SEC
promptly dispatched an investigator to sit in on a meeting
Fantasy Tours held at the Roman Catholic school in Rio Claro
The investor enquired whether the Fantasy Tours investment
scheme was registered with the local SEC.
He was told that it was not, sources said.
Fantasy Tours is distributing two productsone targetted
at retail customers and the other to the business community.
For the retail product, investors are invited to make a
loan to Fantasy Tours after being promised a return of 15
per cent every 10 working days for a 60-day period, according
to promotional material made available to the Business Guardian.
This means that an investor lending $10,000 to the company
receives $1,500 after two weeks. The investor receives three
more payments of $1,500. At the end of the two month investment
period, the investor would have received $6,000 and gets
the initial investment of $10,000 back.
If the returns promised sound too good to be true, thats
because they probably are.
Fantasy Tours has been promoting its products by claiming
that part of the money investors lend the company
is invested in the Unit Trust Corporation.
funds put into these investments are pegged against protected
instruments such as the Unit Trust of Trinidad and Tobago
Second Unit Scheme and Roytrin Units covering 45 per cent
of the funds with the other 55 per cent unsecured but put
into income bearing production immediately, according
to the companys promotional material.
The UTC, along with Guardian Life, issued a paid newspaper
advertisement over last weekend seeking to distance the
financial institutions from Fantasy Tours.
In an interview, UTC marketing manager Gayle Daniel-Worrell
said the UTC objected to its name being used without its
are not involved and we do not endorse it in any way,
An RBTT spokesman said he could not answer whether Fantasy
Tours has any investments with the bank because of confidentiality
Efforts to contact Claudius Phillips, described as the marketing
manager of Fantasy Tours, proved futile as he was reported
to be out of the country.
The SEC is reported to be paying particularly close attention
to whether what Fantasy Tours is selling qualifies as a
As defined in the Securities Industry Act, a security is
any document evidencing ownership or any interest
in the capital or debt, property, profits, earnings or royalties
of any enterprise or proposed enterprise...
It includes bonds, debentures, notes or other evidence
of indebtedness. It also includes any share, stock,
unit, unit certificate, participation certificate or certificate
of share or interest.
If the Fantasy Tours loans are in fact securities,
the SEC has powers under Section 144 of the Securities Industry
Act to apply to the High Court for a permanent or
temporary injunction stopping Fantasy Tours from accepting