A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. In this article, I will be compiling some of the ponzi schemes we have seen in Uganda.
Characteristics of Ponzi Schemes
1. All Ponzi schemes guarantee you high returns with little risk of losing your investment. They will lure victims on a promise that whatever happens you will make a profit or at least get back your capital invested. Obviously this guarantee is a lie. As the saying always goes, if it sounds too good to be true, it most definitely isn’t!
2. In a normal business, the amount of profits made depend on many market conditions. If any business promises you consistent returns regardless of the market conditions, chances are its a ponzi scheme.
3. Most schemes of this nature come up with a business concept that is portrayed as being too complex for the investors to understand. The complexity of the business warrants that they invest on your behalf while you just get profits. This is convenient since investors will not question the schemer a lot. If a business idea is too complex to be explained, it is suspicious and likely to be a ponzi.
4. Invite A to earn B amount. Invest X to win Y bonuses. If the company focuses all their efforts in recruiting new subscribers to make investments, you are looking at a ponzi scheme.
5. If investors easily deposit money but frequently have hardship withdrawing their earnings, you could be dealing with a scheme. Sometimes ponzi schemes will put hard conditions that you have to meet before you qualify to withdraw. In other cases, withdraws will take an unnecessarily long period for funds to reach your wallet.
Some Ponzi Schemes in Uganda – Past and Present
There has been hundreds of ponzie schemes that either directly or indirectly targeted Uganda. Its not uncommon for foreigners to setup Geo-targeted Ponzi schemes and appear to be in the country while they are not. I have a strong belief for example that TelexFree and the very recent BLQ Football were orchestrated by Brazil and Philippine scammers! I will keep updating this list from time to time so whenever you want to confirm what you are dealing with always come back to this ever growing list.
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TelexFree
The year 2013 came with what many believed was a life changing opportunity. A company pretending to sell International call cards at a multi level strategy. It was said the company would then make huge sales and share the profits with its investors. The investors would be given some adverts to post obviously to attract more subscribers. The company had many entry plans with the smallest paying back $20 every week. After collecting over 10 billions, TelexFree collapsed leaving Ugandans robbed.
The Full Story About TellexFree
TellexFree was a company that was involved in a telecommunications and investment scheme that raised concerns and legal issues in multiple countries. The company was founded in Brazil but operated internationally, including in Uganda, Rwanda and the United States. The company claimed to offer a VOIP (Voice Over Internet Protocol) service and encouraged people to invest in it by purchasing “ad packages” that promised substantial returns.
However, TellexFree faced allegations of operating a pyramid scheme, where the majority of income came from recruiting new participants rather than from the sale of actual products or services. Pyramid schemes are illegal in many countries because they are financially unsustainable and often result in financial losses for the majority of participants.
In April 2014, the U.S. Securities and Exchange Commission (SEC) filed charges against TellexFree, alleging it was operating a pyramid and Ponzi scheme. The company’s assets were frozen, and legal actions were taken against its operators. TellexFree filed for bankruptcy in Brazil and the United States.
D9 Club Uganda
D9 Club, also known as D9 Clube or D9 Clube de Empreendedores, was a company that gained attention for its cryptocurrency investment and sports trading program. The company claimed to offer opportunities for members to invest in cryptocurrency and sports trading and promised significant returns on their investments.
However, D9 Club faced scrutiny and legal issues in several countries, with authorities raising concerns about the legitimacy of its operations. Many regulatory agencies issued warnings or took legal actions against the company. Some of the concerns included allegations of operating a Ponzi scheme, which is an investment scam where returns to earlier investors are paid with the capital of newer investors rather than from legitimate profits.
BLQ Football
