JEDDAH, 18 April — GoldQuest International has assured its members worldwide that it is not engaged in any scam and at the same time denied operating in Saudi Arabia.
The Hong Kong-based company issued the statement in reaction to an Arab News report citing a warning by some concerned Filipino community members that many expatriates being recruited to join GoldQuest may be falling for another “pyramid scam.”
“GoldQuest is a legitimate retailer of gold products, specializing in the distribution of numismatic gold coins and authorized by world renowned mints all over the world. With its headquarters in Hong Kong, it has representative offices worldwide to support its business,” said the statement e-mailed by the company’s public relations consultant, Edith Sola, from her Manila office. The statement said the company is not yet operating in the Kingdom. “The company ensures that it follows laws set by (the) country where it is present. However, GoldQuest maintains, it does not operate in Saudi Arabia yet,” said the statement.
The denial virtually suggested that the introduction of the GoldQuest scheme among expatriates in the Kingdom was an underground operation.
A group of Filipinos had earlier warned that fellow “community leaders” and other individuals were putting their compatriots and other expatriates at risk by pushing for the new craze, which is not sanctioned by the Saudi government.
A Saudi Ministry of Commerce official yesterday confirmed this warning and said stern action would be taken against such illegal activities. “If a company does not have an agent and it is not registered in the Kingdom, it is illegal for it to sell any of its products and that goes for GoldQuest,” said Muhammad Ateeq Al-Harbi, director of Ministry of Commerce’s branch in Jeddah. “They are not allowed to sell or even exhibit any of their products in the country,” he added.
Sponsors would also be liable in case an expatriate is caught engaging in such illegal activities in his place of work, he said. “They will be taken for questioning and the sponsor may face a charge of a commercial cover-up,” said Al-Harbi.
If found guilty, the worker may be jailed and then deported while the sponsor may also be jailed or fined, and the fine may reach up to SR500,000, he added.
Al-Harbi said there is an agreement between the Passports Department and the Ministry of Commerce to track these people and raid places which sell the illegal goods.
After the Arab News report, GoldQuest told its members in the Kingdom that their operations were being suspended while its officials will try to settle the matter, one of the group’s organizers admitted in a telephone conversation. The organizer also said many potential participants shied away from joining after reading the report.
In an earlier phone conversation, GoldQuest official Edith Sola felt that their marketing arm, V-Team Inc., might have “moved too fast” in certain places where they still have to get license to operate. “That’s how popular our operation is. It’s the realization that it’s a perfectly sound activity that many people are joining,” she said.
But other than the premature expansion by some of their members in the Kingdom, she said, members have nothing to worry about. “GoldQuest is no scam, and GoldQuest is here to stay,” she affirmed.
The Arab News report also elicited several calls from GoldQuest members who accused the whistle-blowers of condemning something they did not understand. According to the company’s statement, unlike pyramid schemes like the ill-fated Pentagono where members have nothing in return for their money, GoldQuest members get coin jewelry products.
GoldQuest retails its gold product using network marketing as one way to promote the business, a strategy widely accepted worldwide, it explained.
Under the pyramid scheme, GoldQuest members said, a member recruits three or so members, who in turn each recruit their own three members, and so on. In the case of the failed Pentagono scam, wherein thousands of expatriates lost $120 each when it collapsed, a member was supposed to realize income exceeding $100,000 when his own pyramid successfully reaches 10 steps downward.
Under the Gold Quest scheme, its proponents or members explained, an individual who joins gets a gold coin for $360, and must “refer” at least two other potential members in order to earn income. They rejected the term “recruit.”
“Please don’t use the term ‘recruit’ because we are not recruiting anyone,” said one caller, explaining that once a member makes his “referrals,” he gets included in GoldQuest’s TCO, or Tracking Center Operation.
The callers claimed that GoldQuest had been growing fast in other Gulf countries and that it even has an operations center in Dubai. “It’s only in Saudi Arabia where the movement is not that fast,” said one, without giving the reason.
One attributed the reluctance of many who are approached to join GoldQuest to the high price for membership. Another suggested that it may have something to do with the “reputation” of some of the “organizers.”
“Some of these individuals who are spearheading GoldQuest were the same ones who were at the forefront of the Pentagono scam,” the member said. But another rejected “reputation” as a factor. “It’s the soundness of the scheme that’s important. It has nothing to do with reputation,” he asserted.
Sound or unsound, any business being done in the Kingdom without license is illegal, Director Al-Harbi asserted. “A foreigner is not allowed to run a business like that,” he said.
