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Growing Pressure on ‘Pyramid Schemes’

Growing Pressure on 'Pyramid Schemes'

Photo credit by Nutthawat Wichieanbut with courtesy of Bangkok Post

Authorities Call for Victims to Report the iCon Group Pyramid Scheme Scandal

Authorities are urging individuals who have suffered losses to come forward and file complaints against suspects involved in the ongoing investigation into The iCon Group, which is embroiled in allegations of operating a pyramid scheme.

Eighteen suspects, including the CEO and founder, have been arrested in connection with this major fraud scandal. Officials warn that such schemes are not isolated incidents, as pyramid scams and other fraudulent investment operations continue to proliferate.

Despite extensive warnings from law enforcement, many people still succumb to the allure of quick profits and easy money, which pyramid schemes often promise.

In a pyramid scheme, participants are typically promised substantial profits for recruiting new members. This setup channels money from new investors back to earlier participants, exploiting individuals’ desires for financial gain with the lure of high returns and minimal effort.

Often masquerading as multi-level marketing (MLM) operations or legitimate investment opportunities, these schemes can deceive many.

Kosolwat Inthuchanyong, director of the Office of the Attorney-General’s rights protection and legal aid office, commented that pyramid schemes disguised as direct selling have existed in the country for years. “They cater to people’s greed and provide hope for those struggling financially,” he noted, indicating that retirees and elderly individuals are particularly vulnerable, with many losing their life savings to these deceptive schemes.

Scammers, some of whom are celebrities, often build trust with potential victims through charm, social status, and even falsified credentials. When asked about potential legal amendments, Mr. Kosolwat stated that current laws are adequate, but stressed the importance of elderly investors recognizing their limitations, especially regarding recruiting new members for these schemes.

Agencies responsible for victim protection include the Office of the Consumer Protection Board, the OAG’s rights protection and legal aid office, and the Rights and Liberties Protection Department under the Justice Ministry.

While many past victims have faced difficulties recovering their losses, the recent anti-money laundering law allows authorities to quickly freeze the assets of scammers and track online money trails. International agreements also support recovery efforts for victims whose stolen funds have been taken abroad.

Victims are encouraged to report their cases at police stations nationwide. National police chief Pol Gen Kitrat Phanphet has instructed police units to establish complaint centers specifically for victims of The iCon Group’s fraud.

As of Saturday, 2,910 individuals have filed complaints regarding the scandal.

Scrutiny of Celebrity Suspects

Warathaphon “Boss Paul” Waratyaworrakul, founder and CEO of The iCon Group, and 17 other suspects were detained at the Bangkok Remand Prison following a police request approved by the Criminal Court. These individuals face charges of public fraud and falsifying information, all denying the allegations.

The suspects, referred to as “bosses” within The iCon Group’s marketing hierarchy, were arrested after numerous fraud reports. Victims have claimed they were enticed by low-cost online marketing courses and pressured into further financial commitments, resulting in significant losses.

Saree Ongsomwang, secretary-general of the Thailand Consumer Council, pointed out that while The iCon Group is registered as a direct-marketing business, its operations align more closely with direct selling, violating legal statutes.

Concerns have been raised about whether the company focuses on member recruitment rather than legitimate product sales, which could classify it as a pyramid scheme. She also emphasized the need to investigate the financial trails of celebrity endorsers involved with the company, advocating for the return of any illegal earnings to affected individuals.

Motivated by Greed

Pol Lt Col Krisanaphong Poothakool, a criminology associate professor, underscored the importance of gathering evidence to prove that The iCon Group recruits new members rather than merely selling products, as claimed. He cautioned that as long as the desire for quick wealth persists, such scams will continue to emerge.

Victim Testimonial

A 61-year-old victim, who wished to remain anonymous, recounted learning about The iCon Group’s business model during a televised program promoting an online marketing course. Although initially drawn in by the affordable course, she ended up investing over 250,000 baht to become a dealer based on promises of high earnings from her uplines. However, upon testing the products’ quality, she was disheartened to find they did not meet expectations, and efforts to return them were rebuffed. Instead, she was pressured to recruit new members to salvage her investment.

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