An online Ponzi scheme called E-creator hogged the
limelight after its founder 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 batch 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.
In a statement issued to clients on Wednesday, E-creator
said the company’s founder Zhao Jiaotong, had fled with people’s savings.
Whether Zhao exists is a moot point, as no one appears to
have ever seen him or her and since the scheme was accessed from EcoCash
accounts, it is unlikely that anyone could have built up a holding of more than
the EcoCash limit of US$20 000.
But those putting out the wanted notices still believed he
was real.
“Owing to his departure, E-creator was forced to close. He
has more than US$1 million on him. If you find him at the airport or on the
border road, you will get back the money you lost. Let us all find him and get
back the money that belongs to us,” the company’s employees said.
Anyone who 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.
The drama started last Friday when people started facing
challenges withdrawing money from E-creator’s accounts to their EcoCash
accounts.
Some who had climbed in on the ground floor and had already
got their money back with some more were still happy. But the majority, those
whose payments had funded both the initial group and Zhao’s US$1 million, were
mourning following the spectacular collapse of the ponzi scheme.
“I bought my welding machine, two drills, a grinder,
compressor, an iPhone using money from E-creator. Now l want to register my
company with money from E-creator and do other things using proceeds from
E-creator ” Mr Simbarashe Garagada said.
Recognising that the scheme had collapsed, Mr Garagada said
it was a matter of taking risks but he was aware that it would end in tears for
some.
“This was predictable. I sacrificed US$100 during the first
days and got huge returns. I am only left with a few cents in my account,” he
said.
However, Mr Wellington Mugadza will always rue the day he
decided to join E-Creator.
“I’m not even sure where I’m going to obtain the US$100
from. I had hoped that my finances would improve and I could get a driver’s
licence,” he said.
Another employee who preferred to be anonymous said: “Zhao
Jiaotong must face full wrath of law. This is unacceptable, we need real
investors.”
Mr Tinashe Masakadza, another employee, said he was
unperturbed about the recent developments as he was another of those who had
already made a profit.
“I am not a dull a person. This is gambling so you must
know how to play your cards. In any pyramid scheme, you must invest during its
infant stage.”
A Ponzi scheme is a form of fraud that attracts investors
by promising high returns with little to no risk.
New investors bring in money which pays dividends, or other
types of payments, to existing investors.
In 2021 , at least 10 000 people who fell prey to
fly-by-night pyramid schemes within the last year have filed police reports
across the country after being swindled of over US$30 million by scammers, who
snatched the cash and skipped the border.
Gullibility has seen families selling houses, vehicles and
other properties to 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 accesed in four transactions of
US$500 each.
There are even
doubts whether the Chinese national, Zhao, exists and whether he indeed had
US$1million in the company’s EcoCash account because presently, one cannot hold
more than US$20,000 in an EcoCash wallet.
Two people identified as Justin Kuchekenya, who is said to
have claimed to be the chief executive of E-creator and one Abraham Mutambu,
are said to have conducted interviews in the build up to the scam.
Maybe these two know the whereabouts of Zhao, if he or she
really exists.
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 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. Herald
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