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Tom Muleya-Fraud Insight

A too good to be true financial investment scheme is always likely to be a scam. 

In the previous article, I talked about Advance Fee Fraud (AFF) where many innocent people in Harare lost large and varying sums of money in a cement scam that seemed to offer huge savings through far below market value prices. 

Many victims were caught off-guard in a belief that they had found a cement jackpot. 

The victims are still counting their losses and hoping the police will soon arrest the culprits who are suspected to have skipped the borders soon after amassing money and realising that the long arm of the law will catch up them. 

Listen, fraudsters are not fools, but are very smart in thinking. 

They do everything to make you believe their mode of business is genuine and legal, but once they hit their target money, they disappear in thin air.

The cement scam has since worked as a red flag and eye opener to other fraudulent scams that have resurfaced in our beloved cities. 

Currently, in the city of Harare there is a suspected Ponzi/pyramid scheme that is in operation. 

Like advance fee fraud scams, Ponzi/Pyramid schemes are not limited to one specific action, but come in multiple forms. 

Lest we forget, let us refresh our memories with the pyramid/ponzi schemes that hit Zimbabwe in the previous years.

There was the Bulawayo MMM Pyramid Scheme (1990s), the Seke High School Teachers Pyramid scheme (1996), the Goezing Pawnbrokers (2013) run by George Zingane, the Covid-19 era Berven Capital Pyramid Scheme in Harare (2020) and the Crypto Currency Share Investor Scheme (2021) run by Martin Mhlanga aka Boss Martin. 

In 2016, the Reserve Bank of Zimbabwe reiterated that MMM Global Zimbabwe was the largest pyramid scheme to have scammed investors in Zimbabwe.

Ponzi schemes and pyramid schemes have similarities in that both use new investors’ funds to pay earlier investors.

 A pyramid scheme is an illegal and fraudulent investment based on a hierarchal set of network marketing. 

The schemes use multilevel marketing strategy, and do not involve the selling of products. Rather, they rely on the constant inflow of money from new recruits or additional investors. 

The schemes collapse once they are unable to sustain themselves by failing to attract new investors to pay off earlier investors. They also collapse once they become too popular and attract the attention of regulatory authorities and are investigated.

 In order to avoid falling victim to ponzi/pyramid schemes, consider the following preventive measures;

Treat with suspicion any investment scheme that is too good to be true, it is highly probable its a scam.

Avoid an investment scheme that requires you to recruit someone, a friend, relative, and co-worker into the scheme that promises abnormal returns or interests instantly making the investor rich overnight.

Avoid putting lots of money in any get-rich-quick scheme. The trauma may be too big to handle when you suffer a loss.

Avoid enlisting yourself into a pyramid scheme because others are falling for it.

When you are duped, take the person who recruited you into the pyramid to task, he or she is an accomplice.

Contact the police as soon as you suspect that something is fraudulent.

Always remember losing money is easer that recovering it. So jealously guard your hard earned cash and never give it away so cheaply to ponzi/pyramid fraudsters. 

Join in the fight against fraud and create a safe environment and crime free Zimbabwe. Think Security. Watch out for the next issue on pyramids.

Feedback, WhatsApp line: 0772 764 043, or e-mail:[email protected]. Tom Muleya is a Detective Assistant Inspector working under the CID Commercial Crimes Division and also a member of the National Cyber Security Awareness Taskforce, Zimbabwe.