In Lamphun Province in northern Thailand, the Thai government suspects that 120 pyramid schemes may be operating and swindling villagers in and around the district of Li, according to a report at NationMultimedia.com.
The report suggests this is a specific type of securities swindle in which investors purchase shares in purported construction companies that actually are corporate shells with no real operations. The scammers are left with the money. Investors believing they’re helping themselves and the region drive growth are left with worthless pieces of paper.
As is typical in pyramid schemes, corporate registrations appear to have been used to dupe investors. The presence of a corporate registration is not proof no scam is occurring.
As NationMultimedia reports, quoting Director-General Pongpun Gearaviriyapun of the Department of Business Development (italics added):
“Fraudsters deceive people by allowing them to hold shares in a company and partly own the business by asking for initial investment capital. These frauds tell them that they will benefit from the government’s construction mega-projects, and they do register the new firm with the department, but actually these businesses do nothing.”
A recent example of an alleged swindle in which corporate registrations were used to dupe investors is the TelexFree case in the United States. Promos for the firm pointed prospects to the registrations, but TelexFree was conducting a billion-dollar, cross-border pyramid- and Ponzi scheme, according to court filings.
Some of the promos for TelexFree even reproduced images of a government official. Other promos were worded to suggest that the government endorsed the purported opportunity and that recruits were helping drive economic growth to sustain their families and communities.
TelexFree was promoted in Thailand, according to online promos. One promo was headlined, “Telexfree Thailand Team Number One.”
In Thailand, the Department of Business Development “is closely inspecting newly registered firms to see if they are really operating,” NationMultimedia reports. “If not, the department will probe these companies in cooperation with local police, chief district officers, and the Department of Special Investigation.”
Thailand is a nation in the Indochina Peninsula. Neighbors include Myanmar, Laos, Cambodia, Indonesia and Malaysia.