“This is a fantasy that has ruined a lot of people.”
Angry victims have attacked office workers and burned and looted buildings after losing money they had invested on promises of huge returns and in the hopes of getting extra cash for homes, schooling and retirement.
Pyramid schemes produce no tangible goods or services but offer people the chance to make money by investing in the scheme and convincing others to do the same.
One man reportedly committed suicide after selling his home to invest in a scam which he was promised would double his money.
Police have recovered only $16 million in cash after raiding pyramid agencies.
Government officials have blamed each other for allowing the schemes to flourish and dupe mainly poor Colombians in a country where high charges have made bank accounts unpopular.
The collapse of the pyramid schemes has also fuelled fears the crisis may further worsen the nation’s slowing economy, which the government has forcast will slow to as low as one per cent next year.
Business leaders have called on the government to declare an economic emergency to help deal with the fallout.
No official figures exist about how many illegal investment agencies operate in Colombia, but police say they have found at least 200 pyramid schemes around the country, which appear to flourish until the swindlers make off with people’s deposits.
Authorities said this week one agency alone handled $171 million over the last four months.
Get-rich-quick scams have also sparked violence in other developing countries.
About 3,000 people died in Albania in 1997 following the collapse of pyramid agencies which created losses of $2 billion and led to an Italian-led European force restoring order in the country.