Govt moves to root out Ponzi, pyramid schemes

FRAUD | The Financial Intelligence Authority (FIA) has submitted names of about 18 potential Ponzi and pyramid schemes that it says are “fraudulently operating in Uganda” to Parliament and Police for investigations and possible prosecution.

In a December 5 letter to of the Clerk of Parliament, Sydney Asubo, the FIA executive director, said over the years they have been reports of many fraudulent investment scams in Uganda.

He said that such schemes have defrauded people after promising them high returns with little risk.

Sendo Cleaners

“Many of these were investigated and the perpetrators charged a with cyber fraud,” Asubo says.

The Ponzi schemes named include World Global Mobile Network, Telexfree, Afast inc, Tesco Trader, United HYIP League Massive ads, and Bank Electro.

Others listed are Viral Angels, OneThor, Emaar Ventures, Amazon Traders, Prosperity Clube, Global Finance, D9 Clube, Development channel, One Coin,DAGCoin, First Coin, Bux Coin, Mining Capital Coin, World Ventures and Alliance in Motion global.

According FIA — whose mandate among other things is to monitor, investigate, and prevent money laundering, enforcement of Uganda’s anti-money laundering laws and the monitoring of all financial transactions inside the country’s borders — all those affected by companies are requested to report to the Criminal Investigations Department (CID) cyber crime unit section and record a statement in order to get compensation.

By way of example, the Authority says that D9 Club and Development Channel accounts have already been frozen and DPP is preparing a mechanism for compensation.

Directors of the schemes have been prosecuted or are facing prosecution under electronic fraud c/s 19 computer misuse act, obtaining money by false pretense c/s 305 of penal code act )

The developments come after authorities led by Nakawa Deputy Resident City Commissioner Herbert Anderson Burora has officially closed Development Channel, a Ponzi scheme that had recently hit Kampala, over allegations of defrauding Ugandans.

Burora closed the Development Channel offices in Kitintale recently and re-arrested its Director Charles Lambert, a dual citizen of Britain and Nigeria, accusing him of promoting fraud and obtaining money by false pretence.

Development Channel’s problems started when more than 300 Ugandans allegedly reported cases of fraud under the guise of fighting poverty in Africa.

The victims were lured into buying gadgets, which would reportedly give them life time shares in the company.

First on the list of Ponzi schemes submitted to parliament is World Global Network which is described as a mobile network technology via the voice over internet protocol technology like skype in order to market its membership strategy.

“It required affiliates to purchase a package and have access to a global mobile network (GMN) Simcard which could allow you tom make calls and SMS,” Asubo said.

“It claimed to pay promoters each time they made calls and SmSs and when they recruit friends and family, they would make money each time their recruit made calls or sent SMSs.”

In respect of Telexfree, FIA said that it was a multi-level internet marketing scheme which used Volp technology to share advertisements online.

Telexfree, FIA says had contract purchases for advertising. “You could purchase a contract for $ 299 (Shs 1m),” FIA said, explaining how Telexfree’s scheme operated.

“Then you place one ad per day free classified sites and the company pays you USD 20 per week.”

Alternatively an interested individual could purchase the family pack at $ 100 per week.

“Promoters would not receive commissions on that product,” FIA says,”instead they would pay $299 and get $20 per week for placing ads or pay $1375 and get $100 a week for placing more ads.”

The scheme, whose lead promoter was Stephen Asiimwe, FIA says, eventually collapsed and it is estimated that the total loss for all individuals who invested was about Shs 7 b.

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