Isle Ponzi scheme
preys on Samoans’
trust in church

The FBI says about 3,200
fell victim to a scam that
cost them some $16 million

By Crystal Kua
Star-Bulletin

Samoans have often turned to the church in their new community as a surrogate for the village lifestyle of their home country.

"The Samoan community is very church-going," Bill Emmsley, executive director of the Samoan Service Provider's Association, said. "The churches are their villages now. Churches replicate the village setting."

So when a massive investment scheme preyed on members and churches in the local Samoan community, it also hurt a people's cultural identity, community leaders said.

"I know there is a deep impact," Emmsley said. "Anytime it hits a small community society, it has an impact."

About 3,200 investors lost $16 million in the Ponzi scheme, FBI spokesman John Gillies said. "We're certainly not done analyzing the records . . . but those numbers should be a lot higher," he said.

Investors who paid between $1,000 and $20,000 were promised a weekly 8 percent return on their investments -- or an annual return of more than 400 percent, Gillies said. "If you referred others into the program, they would pay you an additional 3 percent a week," he said. "The pitch was that your money would be invested in the Cayman Islands."

The FBI's joint investigation with U.S. Customs, the Internal Revenue Service and other agencies resulted in agents serving 11 search warrants in raids in Honolulu, Laie, Kaneohe, Aiea, Waikiki and Kahala.

Among the businesses raided were Pacific Travel Systems and Fidelity Escrow, Gillies confirmed.

No arrests have been made, but two principal players and about a half-dozen others are under investigation as agencies try to sort out who was involved in the alleged scam and who were victims.

The investigation, focusing on allegations of mail fraud, wire fraud, bank fraud and money laundering, began after the FBI began receiving complaints from investors, Gillies said. "They weren't getting their payments," Gillies said.

"People are very upset," the Rev. Alele Moaga of the Waipahu Samoan Seventh-day Adventist Church said.

Both Moaga and Emmsley were approached to invest in the scheme.

"They pitched to me that this is a once-in-a-lifetime investment. You'll get your money fast in huge amounts," Emmsley said. "This is very alluring."

Moaga said church members asked him for his advice.

"I told my people that if I invest, I invest in a bank," he said.

And there apparently is a reason why church and community leaders were approached first.

"The ministers become the high chief leader of that church," Emmsley said. "The ministers command a lot of respect and power in their churches."

Emmsley is a high chief and executive director of a nonprofit organization that conducts job and entrepreneurial trainning for Samoans. He said he tells people that making money doesn't come easy and only comes with hard work and discipline.

He said he decided not to invest when he couldn't get answers to the questions he was asking. "When you ask for details, they are very evasive."

"When someone approaches you for an investment," prospective investors "don't look at the investment but the person who introduces it," Emmsley said. "It's the relationship that counts. That's why it was very successful."

Word-of-mouth soon took over in getting more and more investors. "Someone would pass on the word to other people," Moaga said.

Emmsley said Samoans who were taken in by the scheme probably will not be forthcoming about what they may consider an embarrassment. "They're hurt. They lost money . . . They tend not to react. It has a deep effect on their trust."