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Trinidad & Tobago: Pyramid schemes collapse

Trinidad & Tobago: Pyramid schemes collapse

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People who have been scammed in the pyramid scheme are asked to come forward and file official complaints with the Fraud Squad. No one has done so yet.

But one Tobago man plans to do so.

The man, who didn’t want to be named, told Newsday he invested $700, invited four people to invest another $700 each – but because the pyramid scheme didn’t operate the way it was claimed to, he not only lost his own money, but had to repay the four people he invited.

On Wednesday, Newsday spoke to a Fraud Squad officer for an update on action against the “investment” scheme, which has attracted hundreds of people across TT.

The officer said no one has come forward, so there cannot be an investigation into the private scheme.

“I don’t think anybody really came and reported that they have lost, to show there is anything at this stage for an official investigation.”

He said it is still of concern to police.

“So if there is someone who feels they have been defrauded, come forward. That’s what the Fraud Squad is here for. Once you provide the information, we will investigate it.”

But, he said, “If persons do not come forward – and nobody is coming forward – then there is nothing for us to investigate, and all we can continue to say is we are concerned about it.”

The pyramid scheme surfaced about two months ago, with people inviting family and friends to invest and get back three times that amount in returns.People can invest as little as $200 and are promised $1,600 in two weeks if they can bring two other people in to invest.

The pyramid has got the attention of the Central Bank, the Financial Intelligence Unit and the police, who warned the public to be cautious about putting their money into this type of scheme.

The Tobago man joined the pyramid scheme group on August 8. Days after, he met with the group administrator in Crown Point to hand over his investment. He was supposed to receive a payout of $5,600.

He told Newsday the group had 350 investors, including one administrator.

“I invited four people to invest under me, which would have made it $2,800 plus my $700.”

According to the rules, to be “blessed” after investing the investor must bring in two people to invest the same amount as themselves.

Then for those two people to be “blessed” they must do the same. The scheme depends on investments by newcomers.

It is likened to a flower and the centre is called “the water.” When others invest, it pushes those who invested before into the “water,” where a lump sum will be paid. Investors are told it will take two weeks for them to get to the “water” to “cash out.”

Newsday understands there are over 500 active pyramid groups across TT with hundreds of people involved.

The man told Newsday, “When it was time for me to cash out because I was in the water, the other person who was supposed to cash me out say they brought in their two people already – the process is, you’re first in the fire, wind, earth and then water. So the people in the wind element brought in their two people, but the person didn’t cash me out, they cash out somebody else who wasn’t in the water.

“She was cashing out her friends and family. People were just coming in and joining so they could cash her and her people out.

“The people who I brought in, I had to give them back their money, which was $2,800. That what’s I lost, plus my investment of $700.” He said a major issue is that people were not reinvesting but cashing out and leaving, so the scheme couldn’t survive. He said he had second thoughts earlier, because he didn’t have enough information. But after seeing a close friend cash out, he was convinced he could benefit.

Unfortunately, this didn’t work out, the group was deleted and over 200 people lost their money.

The man said he and his friends who had lost their deposits wanted to take the woman responsible to court, “But I don’t know what’s happening with that now.

“I went to her home and she said she has no money for me and she has no money, she can’t say where the money went.

“She never gave me a chance to get answers but I know she’s receiving threats.”His response to her, he said, was: “I tell she, ‘I leaving it to God,’ and she say she praying to the same God too.”

And yet even after losing more than he invested, he still believes the scheme can work if it is operated correctly and honestly.

“There must be strict rules. People must be required to bring in their two people and they must invest and re-gift. Re-gifting is not an investment, it is helping someone who is in the ‘water’ to cash out.”

Also trapped in the pyramid scheme was a Tobago police officer who invested $400 on August 20. The group crashed days later.

The policewoman, who has been in the service for 16 years, told Newsday on Thursday she was promised a payout of $3200 in three days. She was also asked to reinvest $400 and pay $135 for the administrator fee so she didn’t have to find two more people.

“Days after I asked the person who got me in for an update and she told me to check the group. I saw my name in a circle. I was in the fire. Three days after, I asked for an update and I was in wind.”She said the administrator kept changing the rules.

“After ten days I was in earth and to this day I am still in earth. Last night when I check the group, the admin asked me to contact another man who is now my admin. When I contacted the other person I was told the group is on a go-slow and they want people to do their own sou- sou because the group is closed.”

She said she asked the admin to address all investors in the group and threatened to report her to the Fraud Squad. “She telling me if Fraud Squad come she will show them her books of the people she paid out.

There were 200 people in this group.

She alleged there are senior officers in charge of groups. “Some of them crashed, that’s why I didn’t join any police officer group. I picked this one I because I didn’t have to bring in anyone. What’s happening is these administrators getting greedy.”

ACP of the Tobago Division Vernon Roberts told Newsday he is not aware of any police officer in charge of any pyramid scheme. “As far as I am aware, that is illegal.”

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