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Pyramid scheme collapses, angry loss-makers threaten to kidnap kid

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  • Manicaland provincial police spokesperson, Inspector Luxson Chananda said those duped are free to approach the courts for a recourse as money laundering is illegal.

FACED with financial hardships and an insatiable appetite for quick profits, thousands of Rusape and Nyanga residents are sinking their money into pyramid schemes, amid promises of high returns, only to be left in worse financial positions as the schemes collapse.

The money spinning schemes are spreading like wildfire across the province and leaving a trail of crushed spirits.

Following the collapse of a pyramid scheme in Nyanga, a seven-year-old child was almost taken as collateral for the money lost by the people who had joined the venture.

The incident occurred last week on Wednesday.

Mr David Kunyarimwe, whose wife was a member of the pyramid scheme, confirmed the skirmishes that happened at his Nyamhuka home as irate members of the scheme invaded the place after being referred to his wife by the pyramid scheme’s chief administrator, Ms Letitia Manyandure.

 “It was really bad and my family is traumatised. Obscenities were being hurled at us, the harassment was just too much. They were referred to my wife by the chief admin. 

“We had to give in to their demands and promised to pay back their dues as our security was under threat. They even attempted to kidnap our seven-year-old child,” said Mr Kunyarimwe.

When contacted for comment, Ms Manyandure rubbished claims that her scheme had collapsed.

 “l am not aware that it is called a pyramid scheme. However, it is public knowledge that when investing in mukando, one has to wait for their chance. We can not all get money at the same time,” she said.

The fraudsters are siphoning thousands of dollars from closely knit groups such as religious and social organisations as well as college students.

Many have fallen victim to scammers in Vengere, Mabvazuva, Magamba (Rusape) and Nyamhuka 1, Nyamhuka 2, Devchands and Mangondoza (Nyanga); but people keep trying their luck, with civil servants, vendors and housewives usually among the ‘investors’.

In these scams, victims are promised very lucrative returns over very short periods of time. 

Money paid by new members is used to repay earlier ‘investors’, leading to the collapse of the schemes when they fail to attract more funds.

In the pyramid schemes investigated by this publication, members paid a US$20 non-refundable joining fee and were promised to get US$280 in a month.

Members were placed in different groups.

After the formation of many sub-groups as membership ballooned, returns took longer to be paid, thereby drawing the ire of members.

Those interviewed by this newspaper said the admin has been constantly changing the rules.

Some of the Nyanga pyramid scheme’s WhatsApp group rules reads: “No refunds when you join, unless you sell the account. All downliners to be sent through administration desk. No money, no joining. Chief admin, Mai TK, to release names of those being gifted, Mukando Group Admin Staff Chiguma @077236846 #Chigs, Ben @077323762 #cotsa, Hamba @0773609343, Ralph (tk) @0715937451, Kia @0712006160 #Kingsley, Shelly @0779190884. Please let us cooperate, thank you – from the Admin desk.”

A distraught woman and her daughter who joined the scheme in Mabvazuva, Rusape, have been using pseudo names Ruezzy 1 and Ruezzy 2 in the scheme.

She said she learnt of the scheme through WhatsApp and thought it was an opportunity to make extra money.

“We each paid US$10 to Tapiwa Zuze on January 23. We were supposed to get US$120 after four weeks. I wanted to make extra money, so I had to pay for my daughter since it was affordable. 

“But Zuze could not pay us anything, saying the scheme had collapsed after the pool of new recruits had dried up. We joined using ID number 63-59371-A-42,” she said.

 “A few were paid to lure us. They were used to tell us lies of the rewards they purportedly reaped. I realised too late that there is no such thing as a free lunch. These schemes are a road to financial ruin,” said Ruezzy 1.

From the observations made, the fraudsters delete the WhatsApp groups and change their cell numbers as soon as the pyramids collapse.

The fraudsters thrive on the principle of borrowing from Peter to pay Paul, and due to the unsustainable nature of the model, the last ‘investors’ take the fall. 

The scammers use an octagon that must be filled with names of participants. Members are told to pay between US$10 and US$30 to secure a spot, and then recruit other participants, who in turn are required to recruit their own investors. 

Once your name makes it to the centre of the octagon, you get paid between US$60 and US$280.

Those who join the schemes earlier benefit from the membership fees paid by new members they recruit, and the schemes collapse when the pool of recruits is depleted. 

Another woman, who preferred anonymity due to embarrassment, said she was swindled of US$13 by a Corfinatwer crew fronted by one Choto.

“I paid US$13 and had to recruit two participants who paid US$13 each. They were also expected to bring their own two people. Thirty-two people needed to join before l could be paid. 

“In the process, new recruits could not be found and the scheme crashed. I asked for a refund to no avail. Only those at the top of the pyramid made money. That is why there are more victims than winners in these things. It is money going in circles,” she said.

Choto and Zuze could not be located and their mobile numbers were repeatedly unreachable.

Manicaland provincial police spokesperson, Inspector Luxson Chananda said those duped are free to approach the courts for a recourse as money laundering is illegal.

Authorities have spoken strongly against pyramid schemes.

The Reserve Bank of Zimbabwe has always been issuing warnings to the public against get rich quick investment schemes under which existing investors are paid returns, not from genuine market investment of their funds, but from contributions made by new investors, until a point when the scheme can no longer attract new investors.

The Central Bank has been stating that all institutions offering financial services must be issued with licences before operations commence. All entities carrying out banking activities (receiving deposits from the public) and are not licenced as a banking institution are in breach of Section of 5 of the Banking Act, Chapter 24:20.

Sometime in 2016, the RBZ identified MMM Global Zimbabwe (MMM) as the biggest pyramid scheme to have scammed investors in Zimbabwe. – Manica Post 🔺

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