Literacy as a way to avoid fraudulent investments

Padang, West Sumatra (ANTARA) – Two months ago, Doni Salmanan and Indra Kenz were at the peak of their glory. At the anniversary event of one of the national private TV stations, they sat in line with a number of young people who were dubbed ‘crazy rich’ or super rich people in Indonesia.

The ‘crazy rich’ Indonesians who attended the event were Dony Salmanan, Gilang Juragan 99, Indra Kenz, Rudy Salim, Ahmad Sahroni, Maharani Kemala Dewi, and Raffi Ahmad who were roasted by the comedian Kiki Saputri.

The term ‘crazy rich’ got popular after a 2013 novel titled Crazy Rich Asians written by Kevin Kwan from Singapore. The novel was later adapted into a feature film of the same name.

The crazy rich are young, wealthy people with abundant assets who often show off their wealth or flex on social media.

At a very young age –Doni Salmanan being 23 years old and Indra Kenz being 26 years old– already racked up a lot of cash in their bank accounts, despite their upbringing from simple or ordinary families.

Doni Salmanan was from Bandung. Although he only graduated from elementary school, he was able to earn billions of rupiah.

Salmanan was famous for his videos, in which during the community activities restriction period he gave away money to motorists at a crossroads when the red light flashes.

Meanwhile, Indra Kenz is from Medan, North Sumatra. He was known for his jargon, ‘wow, so cheap’ when shopping for luxury goods, or showing off his wealth through his social media channels.

Related news: Trading app fraud: Police list Indra Kenz’s assets for seizure

Now, the two were reunited by the same fate. After they lived with brimming wealth like sultans, now they spend their days in the Police Headquarters detention center.

Criminal Investigation Agency had named Indra Kenz, who was known as an affiliate of the Binomo binary option trading application, as a suspect in cases of alleged investment fraud, spreading false news and money laundering, and sentenced him with 20 years in prison.

The Head of the Public Information Bureau of the Public Relations Division at the National Police, Brigadier General Ahmad Ramadhan, said that after the case was filed, investigators named Indra Kenz as a suspect.

After examining several witnesses and confiscated evidence, the investigator obtained two valid pieces of evidence to establish Indra Kenz as a suspect, as in accordance with Article 184 of the Criminal Code.

Indra Kenz was reported by one of the victims, NM, on February 3, 2022, related to allegations of online gambling and/or spreading false news through electronic media and/or fraudulent acts and/or money laundering.

Shortly after, Salmanan was also caught, after Investigators from the Directorate of Cyber Crime of the Criminal Investigation Unit at the National Police named him a suspect in a case of alleged binary options investment fraud with the Quotex application.

Doni Salmanan was charged with multi-layered articles relating to the ITE Law, the Criminal Code, and the crime of money laundering.

Flexing Phenomenon

In recent years, there has been a phenomenon of new-emerging rich people who often show off their wealth and lifestyle to the public through social media and news coverage.

Contents from them which garner most interest and view revolve around the lifestyle; what their homes look like, places they go for vacation, their collection of rides, as well as clips of them giving away cash or expensive motorcycles.

Professor of management at the University of Indonesia, Prof. Rhenald Kasali, assessed that people who are truly rich usually desire privacy and avoid public attention. They would not even think about showing off luxury goods, Kasali said as quoted from his YouTube channel,

Showing off luxury goods is not fun. As the items could attract criminals, it would also prompt the Directorate General of Taxes to tax the item.

He also shared his experience sitting on a plane next to someone who dressed modestly. He was suspicious that he was sitting by a very rich person.

Kasali recounted that once he was on a plane with a conglomerate in Indonesia, not in business class but in economy class. When eating at a restaurant, everyone’s bill was paid for by this person whose appearance was very simple.

Kasali said that rich people could be categorized to three types. First are rich people whose lifestyle is in accordance with the wealth they have, and do not boast about it.

These rich people only buy necessary things. For example, buying a private plane or a yacht which is only a fraction of a percent of his total wealth, to save time and maintain security.

Second, rich people with simple lifestyle. There are two possibilities of why employ such lifestyle; either they were avoiding taxes; or they had been raised that way since childhood, thus the way they live did not change even though their wealth increase.

They maintain simplicity wherever they are. Who would have thought that these people have trillions of assets, yet none of them were shown at all.

Third, rich people whose lifestyle was actually beyond what they could afford, and they usually brag about it.

It’s easy to find them, because they are very active on social media and almost all their assets are used as social media content.

They flex as a part of marketing strategy because they were being endorsed by a brand, in order to entice public into imitating its path of success. Who would not be tempted by a young person who has hundreds of billions of assets?

Thus the public must be able to identify someone’s actual wealth when they show off their wealth. Were they actually rich, or were they flexing for the sake of social media contents.

Kasali said that a person’s wealth could be calculated, and its source could be tracked.

For example, there are people who have assets of Rp150 billion. How would we gauge its legitimacy? Things such as the scale or success of their the business, the income from the business in question could also be estimated per month and per year. After that, one can conclude, and determine whether the wealth makes sense or not.

So if there are young people in their 20s with hundreds of billions of wealth; with no known business or enterprises they do or have; and even upon being calculated, their income was not proportional to the efforts, then there were several possibilities.

First, it could be an inheritance from his parents who were already rich.

If not, there is a possibility that he was being endorsed by a product to make them look rich.

Or it could be that there were rich people who entrusted their assets to others because they could not be deposited in the bank for some reason.

Related news: Beware of binary option fraud: OJK

Investment Literacy

The Chairman of Investment Task Force at the Financial Services Authority, Tongam L. Tobing, said that many investment products offered to the public did not come up with information about consumer rights and obligations.

As a result, people are easily tempted by investment offers that offer high returns which turn out to be unlicensed investments.

Tobing disclosed that celebrities and artists alike promote Binary Options, thus attracting people to join as members.

In Binary Options there is no trading activity and the activities tend to be like gambling.

In Binary Options, traders are asked to predict the changes in price of an instrument whether it will increase or decrease within a certain period of time, and was generally offered through foreign brokers who were not licensed in Indonesia.

It was even estimated that fraudulent investment transactions and gambling had robbed hundreds of trillions of rupiah from the public.

To prevent similar cases from happening again, stakeholders must continue to educate the public so they did not fall victim to illegal investments, because information was the key to prevention.

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