‘Life plans on hold, no money to send home’: Indonesian domestic helpers in Hong Kong fall prey to alleged pyramid scam
They were reportedly told their investments went into herbal farms in China, property in India and sunflower farms in the Philippines, among other things
Dozens of domestic helpers, mostly from Indonesia, fell prey to a pyramid-like scheme that allegedly started in 2013 and ran until early this year, losing them at least HK$8.4 million, police told the Sunday Morning Post.
From March 27 to August 23 this year, police received reports from 183 people who suspected they were deceived while investing in high-yield investments, according to a police spokesman.
The money and the number of the victims involved might be even larger, however.
A non-profit organisation that has supported the victims said that the fraud might have actually involved about a thousand people but many are too afraid or ashamed to come forward.
Clarice – not her real name, as she fears for her safety – a 34-year-old domestic worker from Indonesia, was one of the first victims. “My best friend, who became my leader [in the scheme], told me about this,” she said. Clarice joined the scheme in December 2013.
“At the time, it seemed like a great investment,” she said.
By the end of 2015, she had referred about 10 to 15 people to the scheme, including family members such as her mother.
Aside from being seriously in debt – many have taken loans for investments – some of these domestic helpers were left with broken social ties and are facing family conflict, as they introduced the scheme to friends and family who have likewise suffered losses.
The scam reportedly involved companies registered in Hong Kong.
The Commercial Crime Bureau is currently investigating the case and two men, aged 39 and 56, were arrested in late March for conspiracy to defraud. They have been released on police bail and are required to report back in early October, the police spokesman said.
Information to warn the public on the Hong Kong Police Force website describes the so-called Ponzi scheme as a process where “fraudsters organise investment seminars for high-yield investment programmes, hedge futures or offshore investment and boast extraordinary returns”.
Victims gain profits initially, so they carry on investing or encourage friends and relatives to join, but fraudsters eventually flee with their funds, according to the website.
That was what happened to Clarice and her friend Lauren (also not her real name), who started investing in June 2014.
“Every Sunday, they would give us training and targets to bring in new people … Early this year they disappeared, they stopped paying us and they stopped answering the phone,” Lauren, 29, who is also a domestic helper from Indonesia, said of the scammers.
Domestic helpers in Hong Kong receive a minimum wage of HK$4,210 a month on average, most of it remitted to their home countries.
Lauren’s investment went fine in the first year. “I invested HK$39,000 dollars the first time ... I got HK$70,200 after 12 months. It seemed very good. That’s why many people wanted to join,” she said.
She could not explain in detail the mechanics of the first investment, which was called a “bidding auction”, but said she was offered different packages with varying levels labelled as ‘silver’, ‘gold’ and ‘platinum’.
Each level of investment required a different amount of money and commitment.
Lauren’s second investment was a long-term one. “I renewed my packages in June 2015 and made another investment, in which my money would be locked for five years … I invested HK$23,400,” she said.
Several domestic helpers reported being made to sign documents, but in many cases they were not given a copy.
They were told their money was to be invested in projects such as herbal farms in China, property in India and sunflower farms in the Philippines, among other things.
“But I was not sure where my money was going,” Lauren admitted.
In total, she invested about HK$100,000 and made about HK$70,000.
“We hope we will get our money back. But we are not able to fight in court after everything we lost … so we are asking for help,” Lauren said.
Umi Sudarto, director of the Migrant Workers Community (Kobumi) – an organisation that supports domestic helpers in Hong Kong – said the number of victims could be up to a thousand.
“At first they could get money as bonuses and royalties … Many of them put a lot of money in… From HK$15,000 to HK$200,000,” she said.
Jason Y. Ng, a volunteer lawyer with the non-profit Helpers for Domestic Helpers, said those who went to the police were the more outspoken ones.
“Many are ashamed and feel responsible because they introduced their friends and relatives. Some also get questioned as to whether they knew what was going on,” Ng said.
The consequences for many can’t be measured with a price tag.
“The investments they made represented their entire life savings. Some of them put their life plans on hold, for example, getting married, and nearly all have not been able to remit money to their families in Indonesia since [returns] stopped,” he added.