Kwekwe (New Ziana)- Some fortune-seekers in Kwekwe could have been swindled of thousands of United States dollars after a pyramid scheme collapsed this week, citing Covid-19 laws for its closure.

The development comes barely five months after the pyramid scheme opened its doors for business.

Hundreds of people who joined the pyramid scheme included vendors, money changers, flea market traders and some civil servants who had received their US$75 Covid-19 allowance.

Clients who had invested between US$1000 and US$10 000 were left counting loses.

Midlands police spokesperson Inspector Joel Goko said they were yet to receive a report from clients who could have been duped by the pyramid scheme.

“We have not received any report about the issue but people should not invest their money in illegal pyramid schemes,” he said.

The pyramid scheme by the name BC, which was operating from the light industrial site in Kwekwe, claimed in a public notice to clients that Covid-19 restrictions on the gathering of people forced them to close and will only reimburse investors their money through mobile money transactions.

“We are currently facing problems with Health officials regarding gathering people during this Covid-19 pandemic.

“Those with accounts maturing on the 17th of August going forward will be issued with new collection dates and times via SMS. Reimbursements will be done over the phone to avoid crowding. We apologize for any inconvenience caused,” said a public notice issued to clients and signed by BC.

Gates at Number 967 Parsons Street (formerly Autoworks) where the pyramid scheme was operating from were closed, with few clients milling outside the premises pondering the next move.

A flea market operator, who is one of first people to invest in the scheme when it started its operations in town before moving to the light industrial area said she had to date invested US$20 000.

“I started with US$1000 and getting my interest after every week without redeeming the money, and as a high risk taker I lost my initial deposit plus interest. I am down on my knees. I hope they will honour their word and give me back my money in hard currency, since I don’t have a Nostro account,” said the lady.

A money changer who invested US$1000 in the scheme said: “Their (BC) rate was very attractive, but I didn’t know that it would end like this.”

Repeated efforts to get a comment from the pyramid scheme operators were unsuccessful as their mobile number went unanswered.

The company was accepting minimum deposit of US$100 and each investor would pay an administration fee of US$10 for the first US$1 000.

After six weeks, the investors are promised 50 percent interest.

A number of unsuspecting fortune-seekers, expecting lucrative returns, have been swindled of their hard-earned money through pyramid schemes around the country, with some of the conmen being dragged to the courts to answer fraud charges.

Pyramid schemes work by giving older investors money from new investors and rely on far more newcomers joining at each step than people already in the scheme; they collapse when there are not enough newcomers.

New Ziana