Colombia scam suspect seized

Financial scandal sparked violence in Colombia after investors lost money.

    President Uribe declared a state of emergency
    over the crisis [EPA] 

    DMG reportedly made millions of dollars annually by offering about 200,000 investors high interest rates, as high as a 300 per cent returns over six months.

    Such pyramid schemes can offer dramatically high returns by using later investors' money to pay off those who invest first.

    However they collapse when the flow of incoming money is not enough to pay the growing pool of investors.

    Drugs 'link'

    Thousands have lost their savings on such reported scams that promised high interest rates, real estate deals and debit cards to buy consumer goods.

    Authorities are also said to be examining possible links between the finance agencies and Colombia's multibillion-dollar cocaine trade.

    Last week furious clients stormed and looted local DMG branches in rioting that left 13 towns under police curfew and two men dead.

    Officials seized 92.4 billion pesos ($42 million) from 68 of the company's offices and arrested 52 employees, police told AP.

    Later on thousands of DMG depositors took to the streets this week to protest a decision by Uribe to shut the stores.

    Lawyers for DMG told Reuters the company's managers were innocent and were ready to co-operate with the government's investigation.

    Another company, Proyecciones DRFE, collapsed last week amid news its owner had left the country, leaving about $270 million of investments in limbo.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Interactive: How does your country vote at the UN?

    Interactive: How does your country vote at the UN?

    Explore how your country voted on global issues since 1946, as the world gears up for the 74th UN General Assembly.

    'We were forced out by the government soldiers'

    'We were forced out by the government soldiers'

    We dialled more than 35,000 random phone numbers to paint an accurate picture of displacement across South Sudan.

    Interactive: Plundering Cambodia's forests

    Interactive: Plundering Cambodia's forests

    Meet the man on a mission to take down Cambodia's timber tycoons and expose a rampant illegal cross-border trade.