Ponzi Scheme Grabs R42 Million in 2 Months
Up Money Ponzi Scheme Gets Shut Down
A Ponzi scheme (called Up Money) which started in Tembisa has been shut down but not before they conned people out of over R42 Million in just 2 months.
The national lockdown, desperation and greed has driven many people in Tembisa into the open arms of a pyramid scheme called Up Money. The scheme, which featured increasingly large food parcels the higher in the pyramid you climbed, started with only an initial R180 buy in from those conned.
You Get a Pack Of Meat While We Get Luxury Cars
While some members were supposedly getting their food parcels if they could recruit enough new members and get them to recruit new members (etc), the Up Money operators were out buying themselves an Audi TT, a Hummer H3 and a Jaguar XKR and blowing nearly R13 million.
The scheme was able to disguise its obvious pyramid nature by offering members who recruited more members food parcels and even thousands of rand in cash at higher levels. This novel and rather tangible (and edible) reward threw many off the truth for some time. Other popular Ponzi schemes in South Africa recently have ridden the wave of Bitcoin enthusiasm. Many investors knew it was a pyramid scheme but went ahead anyway hoping that they would make lots of money before things came undone. Others simply did not realise that they would eventually lose everything.
The Authorities Swoop In
Authorities got wind of the scheme via the media and soon began to investigate and have the Asset Forfeiture Unit has since managed to seize the cars and even freeze a bank account with over R18 Million in it.
The operators (Jade Ignatius Matsemela and Sipho Martin Mdlhuli) were using social media to lure in new members to help feed the ponzi scheme which fraudulently claimed to be a stokvel. For many people, the opportunity to earn a lot of money simply by getting family and friends to also sign up and put in a little cash was too strong a lure. The ponzi scheme took off and in less than 60 days raked in millions of Rand.
‘around 230 000 people bought into the Ponzi scheme’
It appears that around 230 000 people bought into the Ponzi scheme and are now out of pocket though authorities (mainly the Financial Intelligence Centre) will try to reimburse those they can, once they figure out whose money is whose.
If you are running short on money every month and are relying on credit simply to get by then speak to your local (or online) Debt Counsellor. Rather get rid of your debt and live debt free.