Escaping the collapse of a pyramid
Mbongeni Mguni | Tuesday May 16, 2023 09:09
Sandra Modise* counts herself among the lucky ones, who smelt something fishy and dropped out of the latest “investment scheme” to leave many Batswana in tears. The Ecoplexus investment scheme, now widely acknowledged as a cleverly designed pyramid scam, began crumbling this week, with its operators suspending payouts and making all manner of excuses for non-payment to members.
Modise, the name Mmegi has given to a 30-year old Molepolole native who spoke out about the investment scheme this week, remembers first hearing about Ecoplexus towards the end of March. In fact, records at the Copyright and Intellectual Property Authority (CIPA) show that Ecoplexus Solar Equipment Pty Ltd was registered on April 5 and subsequently removed from the registry of companies this week.
Its sole director, (name provided), apparently based in Kanye, could not be located for comment. Other information available online indicates that Ecoplexus promised its members lucrative daily, monthly and annual returns, based on their initial investments.
As with any investment scam worth its salt, members were continually encouraged to increase their investments in order to qualify for higher tiers of returns, and also recruit new members to achieve the same. Members could also earn quick returns by clicking a button written “working” on the app, an activity known as “go pressa” amongst members, which apparently is required to indicate that one is still active in the scheme and thus entitled to get the daily returns.
Ecoplexus claimed its investments were in renewable energy projects and as such, members were actually “supporting the transition to a more sustainable energy system” and also contributing to “economic development and job creation across the African continent”.
“I heard about it from one of my friends who said I should join and that people were making money and cashing their returns,” Modise says.
“It looked like it was working for them.
“My friend had joined with a P3,000 investment and said they were getting P110 a day. I joined with a P40 credit from the app and was getting P2 per day by ‘pressing.”
A return of P110 per day equates to P3,300 per month, or nearly double the original investment. The allure was simply too attractive to resist for many. The P2 per day and that P40 freebie was also strategic, as Modise explains.
“It was like joining for free and once you see those two pulas being credited to your account every day, you would want to upgrade to a higher level.
“The app entices you and shows you that you could earning real money throughout the year.”
Modise decided to invest P3,000 but just as she was about to, she picked some red flags, which added to the long simmering concerns she had been suppressing.
“First, there was this issue that you cannot withdraw everything. They kept saying you have to keep the ‘base’ or that initial investment and the system would refuse to let you cash that out.
“At the beginning of May, I was on Facebook and saw posts about the whole thing closing.
“I doubt many people saw those posts, but I did.
“Then I saw someone posting saying the investment scheme isn’t registered anywhere and I had to get out.”
During her stint “pressing,” Modise had recruited two people into Ecoplexus, although she insists that she did not accept any commission for them and simply invited them to test out the scheme. She left Ecoplexus recently having accumulated P480 which she could not cash out.
Unlike Modise, however, other members of the scheme are in the hole for amounts that fly north of P20,000. These were committed investors who went all in, expecting a life-changing payout.
By last week, payouts were suspended and communications turned cold on the scheme’s various Whatsapp groups. Those apparently in charge of the scheme kept up a steady stream of explanations to investors, before opting for silence by late this week.
On the Consumer Watchdog facebook page, Ecoplexus has been the main topic of discussion for about a fortnight. The social media group’s founder, Richard Harriman, was amongst the first in the country to openly call Ecoplexus a scam.
“We will not stop warning people about scams like Ecoplexus. Never,” Harriman wrote to the group’s 194,000 members this week.
The scheme’s stranded members have few places to turn. First National Bank Botswana (FNBB), where the scheme’s administrators claimed members’ funds were “frozen” washed its hands of Ecoplexus earlier this week.
“The allegations claim that FNBB is withholding funds for some individuals who are supposedly investors in Ecoplexus.
“FNBB would like to confirm that these allegations are not true and we advise the public to exercise caution when approach to deposit money into any FNB accounts under the pretext that they are owned by Ecoplexus,” the bank said on Tuesday.
The Non-Bank Financial Institutions Authority (NBFIRA) licences and regulates investment firms, asset managers and the various investment products in the market, but its mandate does not include managing “scams or pyramid” schemes.
Officials there, however have led a spirited educational campaign since last year sensitising Batswana about the spread of increasingly sinister scams.
“Unlicensed operators are a common presence across many sectors of the economy, and unfortunately expose unsuspecting members of the public to the risk of abuse and fraud,” NBFIRA spokesperson, Boa Ntebele told Mmegi on Thursday.
“The Authority has regulatory and supervisory jurisdiction over approved investment products as defined by the Securities Act and the Collective Investment Undertakings Act.
“These products include bonds, commodities, stocks, shares and unit trust.
“The Authority, through public education efforts, frequently reminds the public not to conduct business with unlicensed entities operating within the non-bank financial sector.”
She added that NBFIRA has to date not received complaints about Ecoplexus.
NBFIRA officials previously told Mmegi that the Authority has referred investment scams to the Botswana Police Service, which has the forensic ability to investigate. However, the police are yet to nab their first pyramid, forex or crypto scammer.
Ecoplexus, however, distinguished itself from previous schemes by actually registering with CIPA. Laws around company’s registration require the declaration of directors’ full details, including location, citizenship and others. Under the law, even beneficial owners, or the hidden investors behind the directors, are required to be disclosed, a fact that gives some hope that the Botswana Police Service may be able to intervene in this particular case.
On Thursday evening, officials at the Competition and Consumer Authority (CCA) told Mmegi a civil investigation had uncovered dominant criminal behaviour in Ecoplexus.
“It should be noted that the Authority can only investigate the civil part of the scheme while Botswana Police Service will investigate the criminal elements of the scheme,” the Authority’s spokesperson, Gladys Ramadi told Mmegi.
“During the Authority’s preliminary investigations, it was observed that there are criminal elements dominating in the scheme.
“The Authority has therefore registered a case with Serious Crime Squad for criminal investigations.
“The investigations are ongoing and at an early stage, and more information will be shared as soon as the investigations are concluded.”
She cautioned that under the Consumer Protection Act, “practicing, participating and promoting any pyramid and related schemes is an offence”.
In the meantime, members are left to count their losses.
By Thursday evening, the scheme’s Facebook group still has nearly 29,000 members and each five minutes or so, members post their opinions on the fate of their investments.
From a “sure-thing” that claimed it wanted to help the country and continent’s renewable energy transition and provide jobs, Ecoplexus has gone the way of past pyramid schemes, collapsing on top of their members.