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The desire by so many to get rich quick with minimum or no effort provides a large pool of fish for the sharks running pyramid schemes and other cons to feed off, becoming rich themselves before they conveniently take a very long holiday outside the country along with the money they have gathered in their frauds.

Police estimate that in the last 12 months something in the order of US$32 million has been taken through fraud from at least 10 000 “customers” in a wide range of schemes.

Most of these schemes offer huge payouts very quickly. Some offer to double, triple, quadruple money, or do even better, in a few weeks or months. The first few people who enter them often do exceptionally well, and their success provides word of mouth advertising that results in queues of people lining up to give their money away to a bunch of criminals.

None of these schemes actually produce wealth. There are no business assets besides the trunks of cash. They work by using the new money coming in each day to pay off a far earlier group, along with a decent slice being kept for those who are running the scheme. 

But this requires ever more new people to join the scheme. If a scheme promises to just double money you need two new people to provide the cash for the single payout on the stated date, and with the need to pay the “administration costs” you probably need three. So if you start off with just one person by the end of a month you might need 1000, and by the end of another month this might have grown to 1 million.

Some of the schemes involve the contributors more actively, paying them for bringing in more customers, usually their friends and relatives. But the same limits still apply and very quickly there are no more new people who can be brought in.

Obviously the scheme collapses long before the point when even tens of thousands are needed, and whatever money is now stashed in the tin trunks, and at its peak the scheme will have hundreds every day desperate to give their money away, is loaded into the suitcases as the ringleaders vanish. The early payouts to a small number are simply a business expense, what in a legitimate business would be assigned to the advertising budget, and the other expenses are not much more than a couple of months rent for a reasonable address.

The reason a legitimate business cannot come remotely close to the payouts promised by the organisers of the pyramids is that they have to use the investments they receive to make money, either by lending it at a higher interest rate than they pay, with the gap being the legitimate profit, or use the money to add value to something or to make something.

Some of those who have lost their savings or worse complain that the Reserve Bank of Zimbabwe and the police did not stop these schemes earlier. Well the authorities are quite willing to stop them, since they are illegal activities run by criminals.

However the criminals do not tell the authorities when they are setting up the schemes and none of those who rush to hand in their money stop by a police station on the way or phone the Reserve Bank to find out if the scheme is registered and licensed. Someone has to tell the authorities.

At times the authorities do hear about a scheme while it is still operating. They rush over with the handcuffs to arrest the organisers. But usually they only people available are a small group of employees, people with a temporary job, and usually one that is not all that well-paid, who collect and receipt the money.

The big shots stay away from the premises and as soon as they hear the police have moved in they grab their pre-packed bags and vanish. It takes time from the minimal information possessed by the employees to trace the real organisers, but even if that is done within a day the birds have flown, with the cash.

Police, the media and many others try to warn people that any scheme offering these sort of huge payouts in a short time is definitely fake and most of those who pay in money will lose everything and get nothing. 

But people still line up. A few might be very smart and reckon they will be in that tiny percentage that entered the scheme early enough to get one of the publicity payouts. But most have hears there are people doing very well and want to be included. And so they lose.

Publicity on previous frauds does not seem to work much as a deterrent either. 

Even when people know that such frauds abound, they still think “this time will be different” and they get taken for a ride. Yet it can be mathematically proved that such schemes can never work and must always fail.

It is possible to make money if you have some capital. This is known as business. It takes effort and takes time to make the money, along with skills and knowledge. 

But unless you win a lottery there is no instant route to riches. People must realise this and simply stay away from the promises of instant riches. And if they are approached then they should go further, and tell the Reserve Bank or the police what is going on so the damage can be limited and with a bit of luck the organisers of the scheme will not have made enough money to emigrate and can be arrested.