The United Arab Emirates and the Philippines have warned the residents of Filipino in emirates to stop investment in an online gold trading that claims to have a bureau in Gulf Cooperating Council member country.
For past few months, it has been noticed that a great number of residents are inviting their fellow residents for investment in Emirates Gold Exchange or Emgoldex. It is allegedly considered as an online gold store where the clients are allowed to buy and sell gold bars that weigh within the range of one to hundred grams as per the report of Gulf News.
Through the scheme of Emgoldex, the clients have paid AED3,000 (PHP 36,760) for obtaining 15 grams of 24k gold bars which are suspected to deliver within UAE or may be stored up within Germany.
Moreover, if a client wants to avail ‘credit bonus’ of AED 15,000, he needs to refer two more clients in order to fill up the table with 14 more clients under him.
Followed by the model of pyramid scheme or multi-level marketing strategy, this gold scheme is been designed where the main difference is its terms. Here after reaching the top of its scheme level, an investor can leave the table and start afresh from the initial stage again and in the new process the way of earning ‘credit bonus’ remains the same as the fundamental way, that is, inviting new clients or the investors. Till now the main source of this so-called credit bonus is not clear, as reported by the Gulf News.
A correspondent from Dubai Multi Commodities Centre stated the companies like Emgoldex and Gold and Silver Physical Metals KG did not have any licensed from DMCC due to the commodity trading regulation of the UAE. “Emgoldex is not a DMCC-licensed company. DMCC has taken steps to prevent further misuse of our name.”
The confirmation of this statement came from Mohammad Rashid Ali Lootah, Executive Director of Commercial Compliance and Consumer Protection (CCCP) sector in the Department of Economic Development (DED), Dubai.
After the investigation, it had been found that the address of Emgoldex was provided as Jumeirah Lakes Towers which is actually belonged to a consulting firm. After contacting to that address, the receptionist conveyed that Emgoldex had taken the place on rent and it recently moved from the place for leaving for Russia.
Even the consulate-general from Philippine also confirmed that Emgoldex is considered as an ‘illegal solicitations’ in their country as they have decided on it after their discussion with Manila’s Securities and Exchange Commission. The warning from the consulate is also for those people who are participating in this gold scheme, as they can be liable for engaging within the fraud scheme.
But here lies the problem as there are countless investors in this scheme from where it is almost impossible to find out which team leader or clients are genuine. As per the statement from Seychelles, Don, there is no exact number of clients provided, but he said, “they are countless”. Most of the gold deals are operated in the individual way where the business presentations, meeting and payouts take place in hotels and restaurants.