Herald Reporter
Hundreds of people, including small businesspersons and individuals, who invested their hard-earned money in an online pyramid scheme, lost all they scraped together as yet another massive Ponzi scheme has gone bust in Zimbabwe.
An online Ponzi scheme called E-creator hogged the limelight after its founder vanished, allegedly, with over US$1 million a few days ago.
A few people who got in on the ground floor made the incredible rate of return promised by the founder, being paid from the next batch of people who joined, but as the number of those joining had to grow faster and faster the scheme, as do all Ponzi schemes, ran out of new people.
According to sources, hundreds of people invested their hard-earned money on the promise of huge monthly returns from the promoters before realising that they had been sold a dummy.
In a statement issued to clients on Wednesday, E-creator said the company’s founder Zhao Jiaotong, had fled with people’s savings.
Whether Zhao exists is a moot point, as no one appears to have ever seen him or her and since the scheme was accessed from EcoCash accounts, it is unlikely that anyone could have built up a holding of more than the EcoCash limit of US$20 000.
But those putting out the wanted notices still believed he was real.
“Owing to his departure, E-creator was forced to close. He has more than US$1 million on him. If you find him at the airport or on the border road, you will get back the money you lost. Let us all find him and get back the money that belongs to us,” the company’s employees said.
Anyone who joined E-creator was called an employee and the requirement to become a VIP 1 employee was just US$15 and by the end of the month, this money would purportedly increase to US$50.
For one to become VIP 2 employee, a minimum of US$100 and a maximum recharge of US$500 was required while VIP 3 employees needed a minimum of US$500 to get US$2 000.
It was mandatory to invite a minimum number of people to join the e-company in order to upgrade an account.
The drama started last Friday when people started facing challenges withdrawing money from E-creator’s accounts to their EcoCash accounts.
Some who had climbed in on the ground floor and had already got their money back with some more were still happy. But the majority, those whose payments had funded both the initial group and Zhao’s US$1 million, were mourning following the spectacular collapse of the ponzi scheme.
“I bought my welding machine, two drills, a grinder, compressor, an iPhone using money from E-creator. Now l want to register my company with money from E-creator and do other things using proceeds from E-creator ” Mr Simbarashe Garagada said.
Recognising that the scheme had collapsed, Mr Garagada said it was a matter of taking risks but he was aware that it would end in tears for some.
“This was predictable. I sacrificed US$100 during the first days and got huge returns. I am only left with a few cents in my account,” he said.
However, Mr Wellington Mugadza will always rue the day he decided to join E-Creator.
“I’m not even sure where I’m going to obtain the US$100 from. I had hoped that my finances would improve and I could get a driver’s licence,” he said.
Another employee who preferred to be anonymous said: “Zhao Jiaotong must face full wrath of law. This is unacceptable, we need real investors.”
Mr Tinashe Masakadza, another employee, said he was unperturbed about the recent developments as he was another of those who had already made a profit.
“I am not a dull a person. This is gambling so you must know how to play your cards. In any pyramid scheme, you must invest during its infant stage.”
A Ponzi scheme is a form of fraud that attracts investors by promising high returns with little to no risk.
New investors bring in money which pays dividends, or other types of payments, to existing investors.
In 2021 , at least 10 000 people who fell prey to fly-by-night pyramid schemes within the last year have filed police reports across the country after being swindled of over US$30 million by scammers, who snatched the cash and skipped the border.
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.
It is not clear how those who were ensnared into the scheme and eventually lost out failed to pick up anomalies in presentations by E-creator “officials”.
For example, there were promises of them getting monthly payments of over US$2 000 per month via the EcoCash platform, depending on the amounts invested, when it is common cause the monthly limit for EcoCash withdrawals is US$2 000 which can only be accesed in four transactions of US$500 each.
There are even doubts whether the Chinese national, Zhao, exists and whether he indeed had US$1million in the company’s EcoCash account because presently, one cannot hold more than US$20,000 in an EcoCash wallet.
Two people identified as Justin Kuchekenya, who is said to have claimed to be the chief executive of E-creator and one Abraham Mutambu, are said to have conducted interviews in the build up to the scam.
Maybe these two know the whereabouts of Zhao, if he or she really exists.
Ponzi schemes are named after the Italian swindler Charles Ponzi who while living in North America in the 1920s was promising 50 percent profit in 45 days or 100 percent in 80 days on discounted postal reply coupons. The scheme collapsed in a year with US$20 million siphoned out. He was continually using the new money coming in to pay off old “investors” while taking a handsome slice himself, before he ran out of people. In the end every Ponzi scheme must collapse, when the number of needed new investors is greater than the population of the earth.