The Pyramid Schemes


”Pyramids”
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Pyramid scheme and financial loss

The pyramid scheme has cost financial loss to many people. It is important to gain information about and get aware so that you do not become a victim of this scheme as it is a well disguised transaction.

What is a Pyramid scheme?

This scheme has been designed like a pyramid. It starts at the peak point of the pyramid structure where only one person is involved who is the initial recruiter. This initial recruiter who is at the apex of the pyramid scheme recruits a second person who has to invest a certain amount of money with the initial recruiter. In order the get a return on the money invested the second person is asked to recruit more people who will invest money to the second person and they in turn have to recruit more people who will invest their savings. Each new recruiter is required to hire at least 10 people to invest. This leads to around 100 people being involved. The initial recruiter makes a profit out of the money that has been invested. The other recruiters also get profit by hiring other investors; the pyramid of investors keeps on building until there is no strong structural foundation to support the top level structure of the pyramid.

Fraud in disguise

Those of you who get involved are misled into thinking that by investing money you will earn a profit but in reality your hard earned money goes down the drain. This is considered a fraud as the pyramid cannot be maintained, so those of you who have invested money are bound to lose it at some point in time particularly the ones who are at the structural base of the pyramid scheme. It has been calculated that around 90 percent of those involved in such pyramid schemes are bound to lose their money.

Pyramid Scheme in U.A.E

The ‘Khaleej Times’ news reported a person has been arrested for carrying out Pyramid Scheme through a website. This website provides links to other fake websites that exhibited shared circulations and periodic returns. The general department of electronic crimes, Dubai police reported that this website was providing people false information by promising them monthly profit and return of their investment within 6 months.

According to the Director of General Department of Electronic Crimes Major Saeed Al Hajiri, a European woman lodged a complaint against a Dubai based company. She claimed that they were running a pyramid scheme, where she met two Asian women who introduced her to another Asian person who was running an investment company specializing in buying shares from Dubai Banks. She soon realized that she had been a victim of a fraud and was cheated.

Victims of Fraudulent schemes

Due to the European woman learning about the scheme and informing them on time the general department of electronic crimes in Dubai was able to arrest the perpetrator. While investing your money you must be careful and be aware of all the kind of schemes that occur and run a background check before investing your money. The general department of electronic crimes must recruit more people and improve their security to catch hold of such culprits and prevent Pyramid scheme crimes being committed through electronic mediums.


Posted On December 31, 2017