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Flim-flam men become heroes in Colombia

Investors in quashed pyramid scheme left angry with government, bankers
By JOHN OTIS
Copyright 2008 Houston Chronicle South America Bureau
Nov. 22, 2008, 10:45PM

NESTOR SILVA ASSOCIATED PRESS
Clients of the investment company DMG run from tear gas fired by police last week in Bogota.

But if police officers, professors and city officials were sinking the equivalent of millions of dollars into the upstart financial institution that promised to double their money every month, why shouldn't bartender Jairo Labio? He plunked down $1,500.

The firm, however, was on the verge of collapse. Earlier this month, Colombian authorities closed it down in a nationwide sting operation against pyramid schemes that affected 2 million investors, sparked street riots, and led to at least three deaths

(more): http://www.chron.com/disp/story.mpl/headline/world/6127403.html

By sloopskipper on Nov 25, 2008, 06:16 in Friendly Talkzone.

ColombianoGringo (Moderator) (Trustee board) says on Nov 25, 2008, 07:47:

It's interesting to see the comments on the Chronicle article. Most of the commenters appear to be in agreement that the pyramid scammers in Colombia are not very different from the stock market swindlers on Wall Street.

At least the taxpayers in Colombia aren't getting saddled with a potentially trillion dollar plus bill to "bail out" the thieves. That is a bigger travesty than any pyramid scheme.

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sloopskipper says on Nov 25, 2008, 08:24:

Supposedly the government is going to partially reimburse "investors", but of course that is real chump change, compared to the bailout expense.

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ColombianoGringo (Moderator) (Trustee board) says on Nov 25, 2008, 08:41:

Exactly. The biggest number I've seen is about $50 million or so. Even so, why should the taxpayers get stuck bailing out the dopes that got suckered. Besides, a lot of those that "lost money" had been reaping the rewards of the scam for a while. I have relatives in Putumayo and they tell me that a large percentage of the population had simply stopped working and had been living on the DMG dole for quite some time.

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