Pyramid schemes leave hundreds of Tongans high and dry

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Kalafi Moala

The common name for it among Tongans is UJAMA. It is how pyramid schemes are identified; schemes that have enticed and in fact left hundreds of Tongans in New Zealand, Australia, Tonga and other places devoid of hundreds of thousands of dollars they’ve paid as investments with promises to be paid back up to ten times what they’ve paid in.

But just as complaints continue to pour in from so many Tongan families, UJAMA has proven to be the latest scam that have invaded with fraudulent promises the Tongan communities.

A pyramid scheme is a fraudulent system of making money based on recruiting an ever-increasing number of “investors”. The initial promoters recruit investors, who in turn recruit more investors.

Those at the top of the pyramid are paid from those who are at the next level, yet those who join must not only pay but also must bring in two or more investors. And the scheme keeps going in building an endless pyramid that is totally unsustainable in how money is paid out to investors.

Barbara Dreaver, One TV (NZ) Pacific News Correspondent reported on how hundreds of Tongans in New Zealand are trapped in pyramid schemes that cannot refund their money, neither are able to pay amounts promised the “investors”.

They have lost money with the lure of a big return in a short amount of time. As one victim complained, “Its like putting your money in a slot machine in the casino, with the hope it will bring a return. What was promised was that we would hit the jackpot. We had a false hope, and we’ve lost our money.”

TV NZ showed a video of a man by the name of Tomasi Patuki who tried to recruit people at a meeting to join a new group – his group.

“I’ve suffered, you suffered, everyone has suffered but there’s always a loophole and this is the loophole, people,” he says.

“We are a registered company, we only started little but we’re growing very, very fast. I can guarantee you guys to join us ’cause the money will be paid’,” a woman can be hear saying.

Ms. Dreaver reported that while some have earned money, its no true for most who sign up to the schemes, which are presented as gifting programs or investments.

“I am so sad. It’s like they are stealing from us as Tongans. The thing I want now – I just want my money back,” said one victim.

Most victims are ashamed to be identified, although there are those who are threatening legal actions, and have taken to social media to expose an condemn the ones who head up the pyramid schemes.

The schemes promise people that if they put in money, they will receive payments of large amounts of cash quickly, but it depends on them bringing in recruits and their cash is gifted to the people above them.

It is reported when pyramid schemes typically collapse, the people further down get nothing. They lost what they’ve put in, and they get nothing back from what was promised them.

Joseph Liava’a of the Commerce Commission of New Zealand warned: “If you need to recruit people in order to make money and there’s no real product or service involved, its probably an illegal pyramid scheme – don’t risk it.”

It is reported that the schemes are running rampant in Auckland’s Tongan community with recruiting meetings taking place in McDonald’s, church halls, and private homes.

What is sad is that even in Facebook Messenger groups set up my victims fighting to get their money back, there was active recruiting “to lure those in the group yet into another scheme, promised to work better.”

There are groups who are set up using a registered company and supposed contracts, like the one running out of a takeaway bar – Ha’amonga ‘o Maui in Otahuhu in Auckland.

A victim who did not want to be identified, said she saw the contract which made her believe it was legitimate, when she signed up at the takeaway outlet.

“I saw the paper and it makes me believe this is true, it’s going to happen because they let me sign, we made an agreement,” she said.

An angry victim who contacted this writer said she was promised so much, but when she demanded her money back, the organizers of the scheme could not be contacted.

“I don’t want to take them to court, I just want my money back,” she said.

One News spoke to a number of victims who have dealt with another scheme involving Sita Tu’ima and her Golden Gifting Group.

They said to us, ‘Don’t stress, just join. You will get your money, don’t worry,” the first victim said. “After, when I tried to ring them, they said, ‘Oh sorry, something wrong, work it out in a few days’. Since then, I keep chasing and chasing and still nothing.”

According to the report, Tu’ima denies she’s a part of a pyramid scheme and claims it’s a ‘gifting program’.

She told One News that people lost money because they didn’t bring in recruits or left without passing cash on to the people above them. She says she joined another gifting program so she can refund those who paid her.

Warning from the Tonga Reserve Bank

Pyramid schemes are unsustainable business models and are illegal under the country’s Financial Institutions Act, the Tonga Reserve Bank warns.

Tongans have been warned that a business operation called World Venture is a pyramid scheme and that people participate at their own risk. The bank says that World Venture was clearly a multi-level marketing company that encouraged people to recruit more members.

A pyramid scheme is an unsustainable business model that involves promising participants payment, services, or commissions, primarily for enrolling other people into the scheme or training them to be part.

Pyramid schemes are illegal pursuant to Section 3A of the Financial Institutions Act, which states that: Any person, who directly or indirectly, initiates, offers, advertises, conducts, finances, manages, supervises, or directs a scheme where profits earned by participants in the scheme largely depend on increases in the number of participants in the scheme or the size of their contributions to the scheme, commits an offense and such person shall be liable upon conviction to a fine not exceeding $1,000,000 or to imprisonment for a term not exceeding 30 years or both.

Investment companies are classified as non-bank financial institutions and are under the functions of the Reserve Bank to regulate and supervise under section 4A (k) of the National Reserve Bank of Tonga Act.

“We allege that some of these schemes are not licensed by relevant authorities to conduct business in Tonga. As such, the Reserve Bank cannot assure the public of the risks involved in investing with various schemes that are now being introduced around the country.”