The P500-million ‘Birkin scam,’ or how a woman’s obsession led to crime

[tomboy]

Quotable quotes: “If you can make that much money out of nothing, why would you let other people in?”

Lesson of the story: Wag matutuwa pag nakakatanggap ng libre. (usually mga tao mahilig sa libre mga mahgulang/madugas din)

The P500-million

The names have been changed pending the filing of case in court.

Nate met Sheila (not their real names) in 2004 through his friend Jack, who owns an art gallery. Nate is the gallery director in a Manila university owned by his family. A former flight attendant who had taken a break from work when she married and had children, Sheila had just started working at Jack’s gallery.

Nate and Sheila quickly became friends. She was a very simple girl, he recalls in our interview, and even as she had no experience in the art scene, Sheila showed a knack for sales so that Jack began to trust her. Jack made her industrial partner, and later, managing director, widening her social network in the moneyed, art connoisseur set.

“When we first met, Nine West or Cole Haan were already expensive for her,” Nate says. “When she started hanging out with people from the art scene and several of her former flight-attendant friends who had married rich, that all began to change.”

He adds, “Louis Vuitton, she had a lot of those. Then this Birkin thing came about…”

Nate and Sheila’s friendship developed into a business relationship. It all started smooth and harmless. Nate would travel to Europe with his partner Tom, and Sheila would ask him to buy a few designer bags to sell her “clients.”

“At times, she said the orders would be three Chanels, five Goyards, one Hermes… All of these I would finance,” Nate says. “I made money by keeping the tax refund, and for each bag, depending on the price, I would get P10,000 to P25,000 each as carrier’s fee. I did that for almost 2½ years.”

Sheila made good on her word. “I enjoyed doing it,” says Nate. “With that alone, each of my flights to Europe was already paid for. And I was also into bags. I even earned points on my credit card.”

Then he quickly adds, “Let me be clear that I was only doing it for fun. I only did it on the side, I didn’t travel to Europe just to buy bags for her.”

It was about the time Hermes opened its first boutique here that things became complicated.

Plausible proposition

Hermes Birkin was the one bag everyone lusted after. But even if you had P500,000 lying around, which was the estimated cost of the cheapest Birkin in Greenbelt, the boutique couldn’t stock up by the dozens. If you wanted one quick, you had to look elsewhere.

“She asked if I wanted to invest in the Birkins,” Nate recalls.

The deal went this way: Sheila would ask an investor to pull in P450,000. In Europe, the cheapest Birkin costs shy of P400,000. She would sell the purse for P550,000. It was a plausible proposition: Some women would rather pay the extra P50,000 (over the Manila price tag) than travel to Europe to buy a purse.

Of the total sales, P50,000 would go to the carrier who buys the bag in Europe or elsewhere, P50,000 to Sheila as middle person, and P50,000 to the investor. In short, an investor’s P450,000 becomes P500,000 in just a month, or a profit of 11 percent—a deal even the top banks couldn’t give.

This time, Nate was a mere investor, not a buyer/carrier.

“We did that for about six times,” Nate says. On the seventh time, Nate asked his nephew if he wanted to invest as well. The nephew said yes and, as usual, all parties involved laughed all the way to the bank.

“I never saw the Birkins; she just showed me photos on her phone,” Nate says. It didn’t matter. She paid him on schedule. Business was good.

Then came February this year. Nate was readying for another Europe trip when Sheila called to ask if he hadP2 million. It was for a crocodile Birkin, she said, which would cost that much. She was sure she could sell the bag the following week. Expected profit was a cool P200,000.

“In a pyramid scam, this tactic doesn’t make you instantly rich, it makes you buy time,” Tom, Nate’s partner, points out. “If I ask P2 million from you, I’ll use it to temporarily make good with everybody.”

Looking back, Nate believes the P2 million was intended to pay off checks issued investors that were due for payment. At the time, he didn’t suspect yet that anything was amiss.

Again, Nate turned to his nephew for P500,000 with a promised profit of P50,000. “My nephew wanted to invest the entire P2 million but good thing I told him no.”

Nate met with Sheila a few days later, on Feb. 13, in a friend’s house, where she handed him the check for the investment plus profit, dated Feb. 17.

“She looked different,” Nate says on hindsight. “She had no makeup on, no jewelry. She looked gaunt and sick. I didn’t know then that her financial woes were already piling up.”

On Feb. 15, a Wednesday, Sheila called Nate to say she wasn’t able to deposit the check payment of the Birkin buyer (to fund the check issued Nate). “Monday came and she called again early to say the buyer’s check bounced so she’d just deposit the amount to my account that afternoon. I kept calling the bank all day as I was leaving for Europe the next day, and nothing. I had already issued a check to my nephew dated Feb. 23. I didn’t want that to bounce, especially since I would be away. I decided to get back the check, and just paid my nephew in cash. I didn’t want any trouble with my family.”