Pyramid scheme: ‘I am at my wits’ end. Please help’

A PYRAMID scheme that has spread like wildfire in West Cork, Kerry and Clare has pitted family members against each other with gardaí estimating as much as €10 million has been invested.

Participants in the so-called gift scheme are asked to invest €10,000 to get a return of €80,000, and to also bring in two more people.

While not all of those taking part are going public, one woman who spoke to the Irish Examiner urged the media to further expose the scheme “before too many people are conned out of their hard-earned money”.

She said her husband has invested thousands in the ill-fated scheme against her wishes. She said two men in Bantry, believed to be the forerunners in the scheme locally, are openly demonstrating their newfound wealth, putting pressure on others to join up.

“My husband, against my best wishes, invested a large amount of our money. He saw what some of the other people received from the scheme and now wants to invest more money. We cannot afford this.

“I have tried to convince him that this is a scam and there will be serious problems ahead when the scheme collapses. I showed him information I gathered from the internet but it seems that greed has clouded his judgment.

“I am at my wits’ end. Please help. These schemes are out of control. Several people I personally know have joined. They were first asked to invest €5,000 and promised a substantial return within two months.

“Some of the early investors have indeed collected a serious amount of money, some in the region of €80,000. One person reinvested up to €20,000 and stood to collect €240,000.

“This has only attracted a large amount of interest and now people are investing more and more money,” said the woman, who wanted to remain anonymous.

In Drimoleague, a man from a farming background said: “This is far worse than any gambling addiction. My son was forced to lie to the bank when he sought the money to invest in the scheme.

“The same lad wouldn’t have two cents to rub together and yet he walked out of the bank with €10,000. He wouldn’t tell me what friend, as such, introduced him to the scheme but insists this friend was able to buy a beamer (BMW car) after investing.

“Another family member went guarantor, not knowing the full extent of the reason for the bank loan. If this investment doesn’t work out, there will be hell to pay. You know what this could do to a family.

“We had a big family discussion about it. I know €10,000 might not be a lot of money to some of the people involved in the scheme but when things are tight in a family, and someone else puts their head on the line to help, it can have all sorts of repercussions.

“We are angry the authorities cannot do anything to stop it and angry that my son was gullible enough to think there’s easy money to be made. In this world, there’s nothing for nothing.”

Politicians have called for legislation governing pyramid schemes to be updated to protect consumers.

Fine Gael Justice spokesman Jim O’Keefe said the scam was conning locals into believing they would be able to make tens of thousands of euro in profits.

However, Labour enterprise spokesman Brendan Howlin pointed out that such ‘gift’ schemes cannot be prevented under current law.

Up to 10 meetings were held last week in the west Cork and Kerry region. At a midweek Bandon meeting, up to 120 people - mainly young men, some known to be in business, farming and construction - were addressed by a woman who did not introduce herself during a 40-minute presentation.

Pyramid scams: con acts full of broken promises

IN the classic pyramid scheme, participants attempt to make money solely by recruiting new participants into the program.

The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same.

The fraudsters behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these fraudsters simply use money coming in from new recruits to pay off early-stage investors.

But eventually the pyramid will collapse. At some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and many people lose their money.