10 000 people lose US$32 million in pyramid scams

By ZBC Reporter

TEN thousand people have reportedly fallen prey to fly-by-night pyramid schemes within the last year, losing a total of US$30 million.

The victims have filed police reports across the country after being swindled by scammers, who snatched the cash and skipped the border.

National police spokesperson Assistant Commissioner Paul Nyathi said: “police have since last year handled 892 cases across the country that involve pyramid schemes.”

“At least 10 000 complainants reportedly lost over US$30 million between them. We have handled some 892 such cases involving thousands of complainants. The scammers quickly disappear after swindling the unsuspecting investors.”

“Millions of dollars were lost, some lost houses while others committed suicide upon discovering they would have been duped. We have handled suicide cases related to Ponzi schemes,” Asst Comm Nyathi said.

“As police, urge people to desist from such dubious investments. Ponzi schemes start with lucrative interest rates but in the end, the investors will lose. People must not be that gullible and they should shun such illegal schemes,” he added.

In some cases, Asst Comm Nyathi said, the scammers create WhatsApp groups where the administrators and other agents are paid handsomely to be able to entice and convince more investors.

According to statistics from the police, at least 2 000 people reported Beven Capital for fraud involving US$17 823 000 and the chief suspects are still on the run.

Gullibility has seen families selling houses, vehicles and other properties to invest in pyramid schemes, an old trick used by scammers as far back as the 1920s.

Some marriages collapsed after the scammers vanished with the money, while others have ended up committing suicide since mid-last year.

In some cases, family ties broke down because people invested using funds that were sent from relatives in the Diaspora for other needs.

A pyramid scheme is an illegal and fraudulent investment based on a hierarchical set of network marketing.

New recruits make up the base of the pyramid and provide the funding for so-called returns to the earlier investors or recruits structured above them in the scheme.

A pyramid collapses once the entity running the scheme is unable to sustain itself by failing to attract enough new investors to pay off earlier investors.

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