The founder and suspected mastermind of an online Ponzi scheme called E-creator, in which hundreds of people lost their hard-earned money in the pyramid scheme, was arrested yesterday and is still assisting police with investigations and will appear in court soon.
Zhao Jiaotong (39), is facing fraud charges and police yesterday invited members of the public who could have lost their money through the Ponzi scheme to come forward and assist with investigations.
Zhao was arrested following reports that were made to the police after he had allegedly disappeared.
In a statement yesterday, national police spokesperson Assistant Commissioner Paul Nyathi confirmed the arrest.
“The Zimbabwe Republic Police confirms the arrest of Zhao Jiaotong aged 39 in connection with a case of fraud in which unsuspecting members of the public were duped through E-creator Ponzi scheme. The Zimbabwe Republic Police is inviting members of the public who might have been duped through E-creator to report at any nearest police station.
“We continue to implore members of the public to exercise due diligence before making any payments to Ponzi or pyramid schemes purportedly offering quick investment returns,” he said.
Hundreds of people, including small businesspersons and individuals, who invested their hard-earned money in an online pyramid scheme, recently lost all they scraped together as the massive Ponzi scheme went bust in Zimbabwe.
The online Ponzi scheme called E-creator hogged the limelight after its founder had vanished, allegedly, with over US$1 million a few days ago.
A few people who got in on the ground floor made the incredible rate of return promised by the founder, being paid from the next batches of people who joined, but as the number of those joining had to grow faster and faster, the scheme, as do all Ponzi schemes, ran out of new people.
According to sources,hundreds of people invested their hard-earned money on the promise of huge monthly returns from the promoters before realising that they had been sold a dummy.
Anyone, who had joined e-Creator was called an employee and the requirement to become a VIP 1 employee was just US$15 and by the end of the month, this money would purportedly increase to US$50.
For one to become VIP 2 employee, a minimum of US$100 and a maximum recharge of US$500 was required while VIP 3 employees needed a minimum of US$500 to get US$2 000.
It was mandatory to invite a minimum number of people to join the e-company in order to upgrade an account.
invest in pyramid schemes, an old trick used by scammers as far back as the 1920s.
It is not clear how those who were ensnared into the scheme and eventually lost out failed to pick up anomalies in presentations by e-Creator “officials”.
For example, there were promises of them getting monthly payments of over US$2 000 per month via the EcoCash platform, depending on the amounts invested, when it is common cause the monthly limit for EcoCash withdrawals is US$2 000 which can only be accessed in four transactions of US$500 each.
Two people identified as Justin Kuchekenya, who is said to have claimed to be the chief executive of e-Creator and Abraham Mutambu, are said to have conducted interviews in the build up to the scam.
Ponzi schemes are named after the Italian swindler Charles Ponzi who while living in North America in the 1920s was promising 50 percent profit in 45 days or 100 percent in 80 days on discounted postal reply coupons. The scheme collapsed in a year with US$20 million siphoned out. He bought no coupons, but if he had, he would have needed hundreds of times the amount ever printed, and a large ship to move them from Europe to America.
He was continually using the new money coming in to pay off old “investors” while taking a handsome slice himself, before he ran out of people. In the end, every Ponzi scheme must collapse, when the number of needed new investors is greater than the population of the earth.
The Herald
Positive Eye
