So maybe we be proud of locally produced scammers?
Maybe you don’t think we have them and that all the pyramid schemes, Ponzi schemes and advance fee scams come from other countries?
Well, you’re wrong.
Of course we’ve had plenty of people in Botswana working for scammers. The people behind pyramid schemes like Success University, TVI Express and WorldVentures didn’t get their hands dirty, they were far away sitting on a beach having a fine time while their local collaborators did all the hard work recruiting more and more victims into their schemes. The people luring others into the Eurextrade Ponzi scheme and promising them profits of “up to 2.9% per day” were here in Botswana. The East European gun-runners behind the scheme never even came close to Botswana.
The people running Three Link Connection were also based here in Botswana even though all the money flowed into the bank accounts of “Daisy Mogale” in South Africa.
But so far all these people have only been local agents, they haven’t been the actual creators of the scams. Until now.
Now we seem to have what might be our first genuinely home-grown Ponzi scheme.
A few days ago I got an email from a reader who said:
“Kindly advise on the credibility of House of Investors, who claim to be a registered company in Botswana since 2015. They say their aim is to invest monies and give out 30-35% profit monthly. I have tried to find their website to no avail.”The reader sent me a document he’d been sent which said they’d been registered since 2015 and that indeed they offered “30%-35% profit monthly or for a desired period on the initial investment. Minimum investment P1,000 and maximum investment P100,000.
However nowhere in the document did it give any idea how these profits might be generated. No clue at all. So I got in touch with the people behind it using their not particularly impressive email address: firstname.lastname@example.org.
Sixty seconds later Google told me that “The email account that you tried to reach does not exist”.
Not very impressive so far. So I SMSed them instead and got the personal email address of the guy behind this scheme. He then sent me an almost identically worded document called “House.doc” that described what seemed to be a differently named, but identical scheme called “Lifestyle Empire”. The only difference was that with Lifestyle Empire the “minimum investment amount is P1 000.00 and maximum is P500 000.00”. But still no clue about how profits would be made.
I emailed the guy and asked him “Let’s say I invest P100,000, what can I expect each month?” His answer was simple. “P35 000 each month”.
I then asked
“How is it possible to earn 35% in a month? What mechanism are you using to earn that money?” He responded “That I can not tell you..then my company will be not useful to you because you might as well start your own..What you have to know as my client is your 35% will be deposited to you every month”.I asked
“Can you give me just a clue? Is it Forex? Futures or derivatives? Shares? Or does it come from new people joining?”He replied
“I do money through forex traiding personally but my is something to do with shares and others things that's what I can say only”.My final question was
“Are you operating as a registered company in Botswana? Have you sought an exemption from registration as a financial advisor from NBFIRA?”Then finally we got something close to the truth. He said
“We haven't started operating sir and we wont do that until all our paper work has been verified, what we are doing is marking the company,what do hear the view of people about it...as soon as we are done with everything and done with NBFIRA we will be launching the company which we will invite you to..BUT for now our lawyers are just helping us to draft things including the document i sent and also doing there level best to make this a success”.I promise you that I haven’t changed a single word or punctuation mark in anything this guy sent me.
The truth is very simple. There is only one way that an “investment” can offer 35% per month. That’s if the 35% that goes to you comes from the person who joined immediately after you and then they get 35% from the person who joins after them. They’re called Ponzi schemes and like pyramid schemes they always fail. Always. Sooner or later, and most times it’s sooner, the recruiters exhaust the number of gullible people willing to contribute the new money needed to fund the so-called profits. That’s when the schemes collapse and “investors” find that even if they received some “profits” their initial “investment” has long disappeared, never to be seen again.
So let’s congratulate ourselves. After 50 years we’ve achieved so many things. A stable democracy, impressive national wealth, a vigorous (and sometimes really irritating) free press, schools, hospitals and roads and now our very first, home grown Ponzi scheme.
Should we be proud?
Actually no, this scheme will never take off because I’ve sent all of this over to NBFIRA. They’re not as tolerant and forgiving as we are.