Police have listed various Ponzi Companies on Ugandan market lurking to defraud unsuspecting members of the public of their hard-earned money.
The listed companies some of which are being investigated by Police Criminal Investigations Directorate (CID) include; Veta plan, Mall Fund, Great Wealth Youth Platform Africa, Cashmulla, Pio Crypto, Premium Clusters, Contract Kapital and Pacs Capital Limited among others.
The ongoing investigations conducted by police in coordination with the Capital Markets Authority follows a case in which several Ugandans were defrauded to a tune of UGX 5 billion, by Capital Chicken Limited.
According to police, the victims were offered profits as returns, through an online investment contract, at an attractive interest rate of 40–60%. After collecting the money, Capital Chicken closed its operation centers around Kampala and disappeared without ever refunding its investors or rewarding them with their profits.
Police spokesperson SCP Fred Enanga said that Capital Chicken Limited is also being investigated for operating a business of fund management without a licence, operating without an investment advisors licence and for obtaining money by False Pretence.
“Its against the above background that we would like to caution the public about other Ponzi Companies in the market, some of which are under investigation by CID in coordination with the Capital Markets Authority.
Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money.
The police alert gives an example under Cashmulla where a user is required to deposit UGX 17,000, and is encouraged to invite other users and earn a commission from users under them, which is a classic pyramid scheme tactic. The alert warns that it is a fraudulent scheme and users cannot recover or withdraw their money.
“We would like to also warn the public about an increase in scams using smart phone sim swapping to defraud victims. During this festive season, we anticipate an increase in sim swap schemes, where scammers using this social engineering skills to attack subscribers by either spoofing caller identities, through the use of compromised social networking applications or illegal and unscrupulous sim card swapping.” Enanga noted during a weekly press briefing at Nagulu Police Headquarters on Monday.