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Published On: Wed, Jan 7th, 2015

Many Cry Over ‘Ponzi’ Schemes

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Pyramid or ‘ponzi’ schemes continue to be used by politicians and confidence artists for political expediency and fleecing the desperate public of their hard earned cash.
The LASCH inputs scheme, War Veterans Trust tractor scheme, and the Tongaat Huletts sugar workers union housing scheme are ponzi operations that have been discredited and used to rip off Zimbabweans.

The demonstration by Tongaat Huletts workers over their misappropriated funds for a housing scheme allegedly engineered by the Zimbabwe Federation of Trade Unions (ZFTU) has highlighted the increase in fraudulent operations countrywide.

The ZFTU has distanced itself from the housing scheme and has described it as a ‘ponzi’ operation aimed at enriching a few individuals and pushing a political agenda of regime change.

The War Veterans Trust is also under fire for instituting a tractor scheme where farmers paid US$50 at the onset and were promised tractors after a substantial number joined the operation.

Housing schemes and co-operatives have not been left out of the fray as many land wrangles and misappropriation of the funds of desperate home seekers continues unabated.

The Zimbabwe National Co-operatives Federation says the law needs to be enforced to curb this.

Ponzi schemes are an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

It started in Zimbabwe in the mid-1990s and schemes such as the LASCH inputs scheme and several others have been crafted around this principle.

On a consensus point that pyramid schemes are harmful not only to individuals but to national interests, the puzzle to date is that the country has no legislation to protect victims who fall prey to schemers.

The duped Chiredzi workers, the botched LASCH input scheme, the ponzi schemes of the 1990s and several housing scams, all these make up a cocktail of ponzi schemes that have left most Zimbabweans in tears.

While there is consensus that the people must be protected from cunning individuals who drive such schemes, the Prosecutor General’s office has raised a serious issue which needs urgent redressing.

“Currently there is no law to protect duped members of the public from such schemes,” said Prosecutor General Johannes Tomana.

The voice of the Prosecutor General might not have come at a better time than now when thousands of farmers across the nation lost out in the LASCH input scheme, while thousands of home seekers are caught up in squabbles over land ownership.

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