Police investigating ‘Blessings Circle’ and other Pyramid schemes

The Guyana Police Force (GPF) is investigating several pyramid schemes which are referred to as ‘The Blessings Circle’ or ‘The Flower’ after some persons were scammed of their monies.

“As we speak, we are investigating one instance where persons would have collected money from individuals…they refer to it as a flower and every petal, you have about six persons and they invest [over] $60,000 and get back $130,000,” Crime Chief Wendell Blanhum said in an invited comment to the News Room on Tuesday.

One person contacted the News Room alleging that he invested in such a scheme and also brought other investors; however, after accumulating $2M, the recruiter fled.

Asked whether the current investigations were sparked by an alleged robbery, the Crime Chief said: “the report that we’re investigating is something of that nature.”

He said the matter is being investigated by the fraud squad at the Criminal Investigations Department (CID).

Several persons have been promoting the pyramid schemes called ‘Blessing Circles’ on social media where others are invited to invest varying amounts of money for large returns. Part of the scheme is for them to also engage in continuous recruitment of persons to join the pyramid scheme.

In August, the Competition and Consumer Affairs Commission (CCAC) advised members of the public to be wary of Pyramid and Ponzi schemes which are disguised as legitimate investments.

The warning from CCAC was issued in the wake of several enquiries made to the Commission about the investment “scams”.

The Commission has also been told of approaches made to persons with the “get rich quick” through investing in these groups that will earn them multiple times their investment.

Consumers need to note that “essentially, the foundation on which the pyramid scheme is built is the problem. Any plan that offers commissions for recruiting new members will inevitably collapse. The real casualties in the collapse are always the people in the bottom, with the people at the top of the pyramid protected,” the CACC said.

Part V of the Guyana Consumer Affairs Act, No. 13 of 2011 speaks to the issue of “Pyramid selling” as it clearly states:  a person shall not promote or operate a pyramid selling scheme and any person who contravenes the subsection of this Act commits an offence.

The Act spells out that the term “pyramid selling scheme means a scheme that (a) provides for the supply of goods or services or both for reward; (b) that, to many participants, constitutes primarily an opportunity to sell an investment opportunity rather than an opportunity to supply goods or services: and (c) that is unfair, or is likely to be unfair, to many of the participants in that – (1) the financial rewards of many of the participants are dependent on the recruitment of additional participants; and (11) the number of additional participants that must be recruited to produce reasonable rewards to participants is either not attainable, or is not likely to be attained, by many of the participants.

Currently, the proprietor of an alleged Ponzi scheme, Yuri Dominguez is before the Georgetown Magistrates’ court on 80 fraud charges for soliciting millions of dollars from hundreds of unsuspecting Guyanese who were enticed by extraordinary returns of approximately 40%. Investors were also encouraged to enlist additional persons on a 10% commission basis.

The company was charged for operating without a license from the Guyana Securities Council and running a pyramid scheme on October 16, 2020.