Instant Wealth of ‘Preorder’ Gold Businesswoman

Name: Instant Wealth of ‘Preorder’ Gold Businesswoman
Uploaded: 2020-10-26T05:57:04Z
Duration: 20 min 32 s
Description: From a densely populated village in East Jurang Mangu, South Tangerang, 31-year-old RPS, her husband and children moved into a luxury housing complex.

From a densely populated village in East Jurang Mangu, South Tangerang, 31-year-old RPS, her husband and children moved into a luxury housing complex.

Johanes Galuh Bimantara

· 8 minutes read

From a densely populated village in East Jurang Mangu, South Tangerang, 31-year-old RPS, her husband and children moved into a luxury housing complex. As they moved into their new house, the family gained new “members” in the form of at least four cars and one motorcycle worth hundreds of millions of rupiah. However, since they started having legal issues brought on by dozens, possibly even hundreds, of people, they have experienced the gradual loss of their sudden wealth.

Security guards stood watch over the gate of the Nuansa Asri Cipadu housing complex on Wednesday (21/10/2020), armed with sprayers. Every vehicle that arrived was disinfected. Turning right, a line of terraced houses emerges to greet visitors. The road passing between the two blocks is 8 meters wide, more than enough to accommodate two cars traveling in opposite directions.

One family became a new inhabitant of the complex last year. They moved into a house with a metal gate adorned with floral motifs and painted white.

Also read: Boot Camp for Minangkabau Gold Traders

The new family was RPS and her husband, SF, and their children. Reportedly, standard houses like theirs, which measure 100 square meters and stands on a plot measuring 130 square meters, today sell for more than Rp 2 billion each.

"The houses on the blocks are classified as upper-middle class. For me, I live in a block of small houses,” laughed Prasetyo Wibowo, the secretary of RT (neighborhood unit) 006 / RW (neighborhood community) 004 of East Jurang Mangu.

RPS and her family previously lived with SF\'s parents in a densely populated neighborhood on Jl. H. Sarmili, less than a 10-minute drive from Nuansa Asri Cipadu. Although the two neighborhoods are located close by, they are like two different worlds.

The houses on the blocks are classified as upper-middle class.

On passing through the entrance gate to Jl. H. Sarmili from Jl. Ceger Raya, the road narrows in some parts, especially at turns, so it is only wide enough for one car to pass. Unlike the houses in Nuansa Asri Cipadu, each of which has a front yard and garage, the residents of the densely packed small houses on Jl. H. Sarmili immediately step into the road when they walk out of their front doors. The houses are also irregularly aligned, seeming to race against each other to take over empty plots.

The alley leading to SF’s family home is just 3 meters wide, "fortified" by fences or the walls of adjacent houses.

The vicious circle of selling and buying gold online, far below market prices: When the order volume declines or buyers dry up, distribution to retailers and consumers comes to a halt.

The differences do not stop with the appearance of the two houses. Prasetyo said that neighbors had often gossiped about SF and RPS’ lifestyle, as they frequently changed cars. When they had first moved into their house at Nuansa Asri Cipadu, SF drove a Mitsubishi Pajero Sport. After that came a succession of vehicles, from a Honda Freed, to a Toyota Alphard and then, a Mini Cooper.

One neighbor also observed that SF owned a Harley-Davidson Fat Bob, which reportedly costs about Rp 840 million today. Of the various luxury vehicles the family owned, Prasetya had only seen the Mini Cooper.

As the wealth of the new residents continued to increase, a question started to grown in the minds of Prasetyo and the other residents. What business brought such instant wealth?

The answer arrived with a crowd of people who came looking for RPS at the end of April. According to Prasetyo, the fasting month of Ramadan 1441 Hijriah had already commenced at the time. He learned from the stories told by those who came that RPS had a unique gold trading business that used a preordering system (money first, goods later) and offered the commodity for very cheap, compared to market prices.

Moreover, many of RPS’ precious metal buyers were not the end consumers, but retailers who also managed orders from a their own customers. The gold passed through them to another level of retailers before reaching the end consumer. The concept is similar to the downline mechanism of multilevel marketing (MLM).

Vicious circle

MI, 29, a gold retailer who was indirectly supplied by RPS, explained that the business RPS ran was basically a Ponzi scheme. Such schemes either rewards retailers with large profits or lower prices for consumers.

For example, said MI, RPS offered gold for around Rp 570,000 per gram in April 2019, when the market price was Rp 660,000 to Rp 690,000 per gram. The latter was the going price of the retailers that bought gold from RPS and then resold it to MI.

It is a vicious circle

However, the promise of large profits had a condition, that buyers preorder their purchases. RPS did not deal in cash and carry. In order to be able to offer low prices, these businesspeople did not collect profits, but played money games.

MI illustrated: Suppose that the normal price of gold was Rp 1 million per gram. To the first group of buyers, the seller offered gold for Rp 500,000 per gram, on the condition that the buyer waited a month for the delivery. Two weeks later, the seller would accept another round of orders at the same price, collecting money from the second batch of buyers to cover the preordered gold from the first batch of buyers at Rp 500,000 less than the market price per gram. Meanwhile, the seller would accept a third batch of buyers to cover the gold preordered by the second batch of buyers, and the scheme would continue.

"It is a vicious circle," said MI. If either the orders or buyers dry up, the seller runs into a jam in supplying the goods to both retailers and customers.

The congestion in distribution was why the crowd of people came looking for RPS, as they felt they had been cheated. Some even camped out in the complex because RPS and her husband refused to see them. These people had deposited huge amounts of money with RPS, but the gold they had ordered never arrived. They could understand if their unfulfilled order was compensated with a refund, but they were not allowed to claim their money back.

How could they not go on a rampage? The Special Economic Crimes Directorate of the National Police\'s Criminal Investigation department (Bareskrim) noted that RPS’ customers reported a combined loss of Rp 271.59 billion. This was the equivalent of 135 upper-middle class houses of the type that RPS and SF had bought in Nuansa Asri Cipadu.

"This is a vicious circle," said MI. If either the orders or buyers dry up, the seller runs into a jam in supplying the goods to both retailers and customers.

It seems that some retailers have already demanded that RPS’ assets be divided so they could at least refund their own consumers in installments. According to Prasetyo\'s observation, the luxury cars no longer “decorate” the front of the family’s house. Even the outdoor lights are rarely turned on, giving the house a dark and abandoned look.

The [case] file is complete and ready to be submitted to the state prosecutor

From observations on Wednesday afternoon, only one motorcycle was parked on terrace of RPS’ house. When Kompas attempted to meet RPS or SF at the house, a woman appeared in the door and said that the homeowner was not there.

RPS is now not only beset by fear of her customers, as several have taken legal action by reporting her to the police. Bareskrim Special Economic Crimes director Brig. Gen. (Pol.) Helmy Santika said that the police had already named RPS as a suspect in the case. They had also completed questioning her as well as several witnesses.

"The [case] file is complete and ready to be submitted to the state prosecutor," he said (Kompas.id, 19/10/2020).

Helmy said that RPS had used the proceeds from the crime to cover her living expenses and to purchase the house and the cars. Investigators had seized the assets.

When Kompas attempt to confirm with RPS and SF, it found out the couple’s cell phone numbers had been deactivated. At SF\'s family home on Jl. H. Sarmili, SF\'s brother YT, 41, said that the family did not know much about the case surrounding the couple.

The family only learned what had happened after the crowd of RPS’ customers visited the house on Jl. H. Sarmili in search of the couple.

"It would have been better if only one or two people came, [but] they arrived in a large group. Up to a dozen people were here, as I remember it. Some came with their babies [with them] at night, too,” said YT.

YT, who runs the canteen at a nearby school, said that his father and mother fell ill when they heard the news. When the crowd asked about the couple’s whereabouts, YT’s father answered that he only knew that SF and RPS were in a trading business, but had no idea that they were trading gold.

The police, however, could not yet confirm that the luxury lifestyle of RPS and her family was the result of misusing the money she had collected for the preordered gold, as the investigators needed to first take a detailed record of RPS’ assets. Helmy said that investigators needed time to record and confiscate the assets, which required a special court warrant.

This is the ballad of RPS’ life. Her gold trading business created instant luxury and wealth for her family, but it is also the illicit business methods she used that has deprived them of their newfound wealth.

Editor:

Syahnan Rangkuti

gold trading business preordered gold illicit business methods ponzi scheme