Julisar, a Chinese businesswoman Indonesia in Jakarta, thought she was on to a winner when a friend the invited her to invest in the Golden Traders Indonesia Syariah (GTIS), a society based on Sharia gold investment, which promised high dividends.
GTIS launched in August 2011, saying he was going to buy gold bullion mining firm owned by the state Division of Logam Mulia Antam then sell them at a market price above for investors, who would receive a return of 4.5% per month or 30% per year, provided that the gold remained in the hands of GTIS.
Julisar began investing in June 2012, spending a of Rp.940 million ($ 100.100) to buy 1,375 grams of gold, it never actually seen. She assured that it was a safe investment because the price of gold "continue to grow" and the system has been certified by the Indonesian Ulema Association (MUI), Islamic higher authority of the country. There were also representatives of House Speaker endorsements, Marzuki Alie, and co-founded the Democratic Party, K. H. Aziddin.
MUI officials said they had no reason to suspect that before Malaysian citizen Ong was a crook. It appeared that MUI had issued GTIS with a certificate of Sharia law in two weeks, in exchange for a 10% share in the company. This was widely seen as a bribe, sent to the Islamic Dakwah MUI Fund. Aziddin involvement in the scheme should have had investors worried, as he had been linked to previous corruption cases and was expelled from Parliament in 2006 for helping a private company won a government contract to build housing for the haj pilgrims to Mecca.
GTIS no longer accepts new investors. When I visited its headquarters in Mega Kemayoran last week, there were few staff, but many nervous investors, most Chinese Indonesians, who were asked to be patient if they want their money. Julisar is desperate and offered to give up his unpaid dividends and 10% of its investment as "administration fee" for the return of his money, but in vain.
The debacle of GTIS is a classic pyramid or Ponzi scheme in which investors are dividends that come from money put in by later investors paid. The initial investors generally reap the highest rewards, but those who are lower in the pyramid will probably lose everything because there will never be enough money to pay everyone. Charles Ponzi was an Italian American, who, on 1919-1920, has raised about $ 15 million in a pyramid scheme that collapsed, earned him a prison sentence of five years.
In Indonesia, religious themes are often used to give credibility to pyramid schemes. The Financial Services Authority says there are about 40 illegal investment companies currently operating. Some claim to invest in real estate and mining, offering investors an annual return of 8% to 40%.
The last year has seen the rise and crash of the "Al Amana" (in Arabic "trustworthy") scam on . He collected billions of Rupiah about 13,000 Indonesians who have invested in the hope of being rewarded with cash bonuses, houses, cars, holidays abroad and the haj pilgrimage.
Muslim cleric Jaya Komara Tangerang last year ran a pyramid scheme called Koperasi Langit Biru, who swindled about Rp.6 trillion 125,000 investors. He was arrested and died in prison before the trial.
A man of hope recently posted on Indonesian atheists online network, fishing for people to invest in a multi-level marketing scam called Talk Fusion. Not surprisingly, he received a barrage of skepticism.
GTIS is now accused by its customers from fraud, but police are still procrastinating about whether there was criminal intent to defraud investors. MUI is yet to withdraw its approval.
The government should educate people to treat high yield investments offer with caution, rather than letting politicians and clerics to run crooked fundamentally unhealthy trade regimes "religious" that can wipe out people's savings.