Uganda: 3,000 Lose Millions in Pyramid Scheme

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Kampala - More than 3,000 people, including senior police officers, have been ripped off of their savings they deposited in Global Finance, a pyramid scheme, after it closed and directors went in hiding.

In the pyramid scheme, the unsuspected investors open account online and deposit money through electronic transfers.

Hundreds of police officers, who lost money in the pyramid scheme, yesterday recorded statements at the Directorate of Criminal Investigations.

Last month, Bank of Uganda warned the public against investing their money in Ponzi and pyramid schemes.

According to the Central Bank, a ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors.

"Money invested by clients is not invested in any legitimate business but used to pay the people operating the scheme as well as those who invested earlier on. This is why Ponzi schemes can sometimes appear to be genuine and profitable investments; because the people who invested first seem to be benefitting," Bank of Uganda statement reads in part.

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