By Mabel Soriano, 12th Grade
“First God and then Mantequilla.” The phrase has already spread throughout the Sabana Grande de Boyá municipality in Monte Plata. Who does not exclaim it has heard it, at least, about the man many say has brought happiness and progress to that community.
Dominicans are now attentive to the Mantequilla phenomenon, a business scheme implemented by an individual who, as if he were a financial guru or magician, multiplies the money of those who decide to invest in his company.
Wilkin García Peguero, popularly known as “Mantequilla”, is a Sabana Grande de Boyá resident who promises to double investments through his company, 3.14 Inversiones World Wide. He claims to achieve this profit using a secret formula that guarantees his clients profits which he was able to come up with thanks to his accounting degree. “It is a scientific method that I designed, to which we have named a predictive mathematical scientific model, based on probabilities,” Mantequilla explained.
In an interview on the Alofoke Radio Show, the young entrepreneur refused to reveal how and what he invests to produce money, assuring that the country’s economy would be severely affected if he did. “Sometimes I have been motivated to tell the population ‘miren cómo es’, but then social chaos would be created, because we would be attacking the economy of a country. If I reveal this “code”, it may be that the economy both nationally and internationally suffers,” he said.
However, he clarified that he would be willing to share the formula with the government, or the corresponding economic institutions, only if there is a confidentiality agreement involved. “We are willing to form a commission of financial entities and we are open to having a conversation, as long as the confidentiality of our operation is guaranteed,” Peguero said.
The 34-year-old Dominican states that his corporation is lawful and not a scam, and much less a way to launder money, as everything seems to indicate. He is so sure of his actions that he intends to extend his operations to other provinces of the country and abroad. Garcia explained to the press that his business consists of paying a return of 20 to 30 percent of the amount of money that his clients give him, in less than 30 days.
Regardless of the community’s support and Mantequilla’s statements, the firm–which resembles a pyramid or Ponzi scheme–is already gaining public attention. The Superintendent of Banks of the Dominican Republic, Alejandro Fernández, maintained on Twitter that it is a scam, but for the moment, as an entity, they can only warn the population that if they incur in these practices they will lose money.
A Ponzi scheme is an investment fraud in which clients are promised a large profit at little to no risk. Companies that engage in a Ponzi scheme focus all of their energy on attracting new clients to make investments. This new income is used to pay original investors their returns, marked as a profit from a legitimate transaction. Ponzi schemes rely on a constant flow of new investments to continue to provide returns to older investors. When this flow runs out, the scheme falls apart.
In Mantequilla’s case, due to his newfound fame, his market is more of a pyramid scheme. This is very similar to a Ponzi scheme, but they are not identical—remember this. The essential difference between the two is that a Ponzi scheme generally only requires investment from the victims, with promised returns at a later payment date. On the other hand, pyramid schemes usually offer a victim the opportunity to “make” money by recruiting more people into the scam.
The most famous modern Ponzi scheme was orchestrated by Bernie Madoff. His firm executed the largest Ponzi scheme in history, defrauding thousands of investors out of billions of dollars over decades. Madoff attracted investors by claiming to generate large, steady returns through an investing strategy called split-strike conversion, a legitimate trading strategy. Nevertheless, things took an illegal turn when Madoff deposited client funds into a single bank account that he used to pay existing clients who wanted to cash out. He funded returns by attracting new investors and their capital but was unable to maintain the fraud when the market sharply lowered in late 2008. On December 10, 2008, Bernie confessed his wrongdoings to his sons—who worked at the firm. The following day, they turned him over to the authorities. In 2009, Madoff was sentenced to 150 years in prison—where he died last year— and forced to forfeit 170 billion dollars to the victims.
Investors put their trust in Madoff because he created a front of respectability, his returns were high but not outlandish to raise suspicion, and he claimed to use a legitimate strategy. Sound familiar? It should be because this is precisely what Mantequilla is doing. Peguero has an advantage that can undoubtedly change the strategy to investigate him, he has followers. People who trust him blindly and deeply, people who truly believe this man is legitimate. It doesn’t matter if the banks freeze his accounts, or if he is under a Dirección General de Impuestos Internos (DGII) investigation. Mantequilla assured that he has the gift of keeping his business sustainable, even with the blockade of the financial system. It doesn’t matter if the Superintendent of Banks is warning the country to stay away from Garcia Peguero’s “business”, because in Sabana Grande de Boya people do not listen to warnings.
The news has witnessed and interviewed many people who make far-reaching lines to invest with Garcia Peguero. Some of those present express, like rabid dogs in defense of the master, that if they mess with Mantequilla, Sabana will get worse than Haiti. Many chant that after God, Mantequilla, and that the man has done more for the municipality than all the politicians put together.
“He is the only one who has helped this town, he gives medicine and pays people a monthly fee to buy their medicine, he fixes his house, he gives him money to students…”, says Nicolás Caraballo, a man who said he had invested 3,000 dollars and that in 15 days they magically returned 6,000 dollars.
Regardless of the allegations, it is our duty to be critical of this type of situation. We need to ask ourselves the following: Are we going to allow Mantequilla to become another Bernie Madoff? Or are we going to stop investing in his corporation until the DGII finds him legitimate?
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