Bruce Ndlovu, Sunday Life Reporter
ON 8 December, 2013, the Bulawayo Amphitheatre was a proverbial hive of activity, as hundreds of people converged on what was then still the venue of choice for major concerts in the City of Kings.
Big crowds are a staple at the Amphitheatre, and thus, usually, nothing to write home about. But on this occasion, this particular crowd felt a little different. For one, the people at the venue were not intoxicated, and neither did they have the expectant excitement of a crowd waiting to watch a much-favoured artiste deliver the goods on stage.
There was neither pomp nor fanfare as they sat down on the cold steel chairs at the arena. Instead, this crowd was tense, with a bout of barely suppressed anger running through them like a current of electricity.
This crowd that thronged the 2 000-seater Amphitheatre had come for a meeting called by the Master of the High Court, a meeting which was meant to chart a way forward and come up with resolutions pertaining to the assets of Geozing Pawnbrokers and Investments.
The company, founded by one George Zingane, had already been placed under liquidation by the High Court, leaving many clients high and dry, as the liquidators faced trouble identifying some Geozing’s assets, as Zingane and his wife had brought properties under some people’s names in some instances.
George Zingani
As the meeting went on, decorum went out of the window, with some aggrieved clients seemingly growing tired of the legal maze they had to navigate if they were to get back their money.
“We want Zingane to come and meet us. We have questions that we want to ask him pertaining to our monies before anything can be done,” bellowed one of the clients from the crowd.
For observers, watching this spectacular scene unfold was nothing less than amusing and entertaining. For those that were unwilling cast members in this public drama, each moment felt like a plot twist crafted by a horror film script writer.
People had sold houses, spent their pensions and even their children’s savings to invest in Geozing. It had all come crushing down rather spectacularly. Once a high-roller in the City of Kings, Geozing was now a poorer shadow of his former flamboyant self. In the April of that year, Geozing’s clients had breezed in with the Autumn wind into his Waterford home to attach 14 of his vehicles, after it became evident that they would not be getting a return on their hefty investment.
In October, five more cars, a Jaguar, a Toyota Carina, a Hyundai Excel, a BMW and a Mercedes Benz commuter omnibus were auctioned off by a landlord for unpaid rentals, electricity, water and utility bills where Zingane was renting. It was a spectacular fall from grace, and although he was later acquitted in 2015, Zingane’s fortunes had faded with the hopes and dreams of many.
A decade later, Zimbabwe is once again waking up to screaming headlines about a pyramid scheme gone wrong.
Last Thursday, police arrested Zhao Jiaotong (39), the suspected mastermind of an online scheme called E-creator, which has left hundreds after it folded in typical fashion.
Since his disappearance, there had been rampant speculation about Jiaotong’s whereabouts, with some wondering if he was indeed a real person.
“This person’s name is Zhao Jiaotong, he is a Chinese, he is the founder of E-creator, and he is currently withdrawing money through the EcoCash agent in Harare, and he will transfer money to his personal
EcoCash and ask someone to help him withdraw the money or through the method of transferring funds to the EcoCash agent to defraud E-creator employees of funds. He tried to leave Zimbabwe tonight, carrying all the deposits of E-creator employees, due to his departure, E-creator was forced to close,” a message on E-creator’s Facebook platform claimed.
That one message triggered widespread panic, as hundreds realised that there were now in danger of losing their hard-earned monies. Yet, as with every pyramid scheme, the writing was always on the wall.
As E-creator got more and more popular, it was clear that those at the bottom of the pyramid would have to count their losses first before they could smell any return on investment.
Pyramid schemes are by definition, meant to mostly benefit those at the top, while those at the base, the Johny-come-lately, are meant to carry the weight for everybody when it crashes down. It is a scheme that is meant to end in one way only, and yet, Zimbabweans, like many elsewhere around the world, can always be counted to fall for it.
In the 1990s, the birth of MMM Global in Bulawayo signalled the era of the pyramid scheme in Zimbabwe, as its influence spread across the country. Masterminded by the former Russian politician Sergei Mavrodi, MMM — standing for Mavrodi Mondial Moneybox — collapsed in the late 1990s, losing investors an estimated US$100m.
Perhaps to illustrate indeed people do not heed lessons from the past, MMM was to return in the 21st century and after yet another “investment” fever gripped Zimbabweans again, thousands would lose their money when the scheme collapsed in 2016.
Perhaps to illustrate that greed and fraud transcend all professions, in 1997, scores of pupils at a high school in Seke, Chitungwiza, were allegedly swindled of hundreds of dollars by some teachers at the school who were running money clubs that eventually collapsed. The pupils were asked to pay money to the teachers with promises that they would “harvest’’ three times their initial “investment’’ in a month.
USDs
Perhaps, sometimes the human costs that come with pyramid schemes are often ignored, as people fixate on the big numbers being quoted after the scheme inevitably fails. In 2020, a Kwekwe woman drank poison following the collapse of Bevern Capital. The woman had reportedly invested thousands of
United States Dollars in the scheme, lured with thousands of others by the prospects of making massive returns.
The Ponzi scheme offered fantastic returns of 50 percent in just six weeks, which saw many people flocking to “invest”. However, it would all end in tears when Bevern Capital closed down its branches citing regulatory and compliance issues, with the directors of the company that had allegedly defrauded people of two million going on the run subsequently.
In 2021, A Zimbabwean man using the alias Martin Mhlanga, who ran the Crypto Share Investment Scheme in South Africa, disappeared without a trace, leaving scores of “investors” in a lurch.
Under his scheme, investors were asked to pay an initial joining fee of US$30 and a US$300 initial instalment that was then given to the individual who would have preferred the new investor.
When one day in 2021, the WhatsApp administrators of the investment group started leaving one by one, it was a sign that the scheme was about to belly up.
However, despite all the failed pyramid schemes, every new entrant in the field does not seem to find it hard to find clients. Perhaps preying on the insatiable human desire to get rich quickly, the pyramid always seems to find willing takers, with many people willing accomplices in their own fraud.
On Friday, the Reserve Bank of Zimbabwe issued a statement warning members of the public from seeking quick wealth from schemes that were clearly designed to defraud “clients”.
“As such schemes are illegal and unregulated, it is usually difficult for victims to get satisfactory recourse to recover their money.
The Reserve Bank of Zimbabwe has in the past issued warnings to the public against investing in such schemes,” the RBZ said.
If the past is anything to go by, the country’s central bank might find itself issuing a similar statement in the not-too-distant future.