Ponzi scheme app White Sands vanishes after stealing fortune from ‘millions’ of Egyptians: Reports

Amr Kandil , Wednesday 19 Jan 2022

A fraudulent moneymaking app called White Sands, which operated in Egypt for months and attracted millions of subscribers, disappeared this month after receiving “billions of pounds” from victims of an elaborate fraud, according to news reports and social media users.

 mobile phone
A man holds a mobile phone in Mexico City, Mexico, February 3, 2021. Reuters

The app involved a Ponzi scheme – a form of fraud that lures investors and pays profits to earlier investors with funds from recent ones – where users would pay for annual subscription bundles, and in exchange, they would receive a daily sum for doing simple tasks such as pressing the like button on Facebook and YouTube videos before uploading screenshots proving they had done so.

The app also operated as a pyramid scheme, through which subscribers gain more profits by recruiting new subscribers.

Subscribers were promised to receive their pending commissions at the start of January, but later in the month were surprised that the White Sands website and app had disappeared, according to victims.

“We would receive the commission 24 hours after the daily task. Since late December, there were delays in receiving commissions. We were promised to start receiving them again by 10 January, as the commissions have been entirely halted since 5 January. The application and the website disappeared on 11 January,” one subscriber told Ahram Online.

The app user, who preferred to speak anonymously, explained that he subscribed in mid-December to the annual EGP 6,000 bundle – which involved doing 55 tasks per day for EGP 264 daily – and received daily commissions until the closure date.

Another user said he lost EGP 48,000 to the app, while a lawyer told Cairo 24 that one user and his family had paid EGP 220,000 for subscriptions.

White Sands claimed that it belonged to New York-based global media, marketing and corporate communications holding company Omnicom, which has not replied to Ahram Online’s request for comment.

To date, Egyptian authorities have not announced launching a probe into the incident.

However, social media users on Facebook and YouTube are urging people to contact anti-cybercrime authorities.

Founders, middlemen

Five people claiming to be foreign nationals launched the app, according to social media posts, and were assisted by dozens of local middlemen in charge of inviting people to subscribe.

“They [the founders of the app] all carried fake names like Elissa, Simon, and Jessia, and a group of agents were intermediaries between us and them,” one subscriber told Ahram Online.

Many of the subscribers shared screenshots of alleged agents announcing they were abandoning the app after recognising fraudulent behaviour by the app operators.

Social media users have alleged that the app has re-launched in other countries under different names, including Golden Fleece in Italy.

Famous mobile operator involved

The five alleged co-founders, as well as many of the alleged middlemen, had phone numbers under the same mobile network operator.

The commissions paid to the app’s victims were all transferred via electronic wallets belonging to a local mobile provider, one of the subscribers told Ahram Online.

According to a source from a local mobile operator who spoke to Ahram Online, each individual is allowed to buy 10 mobile numbers using his own official ID. Each number can have an e-wallet with a maximum limit of EGP 100,000.

A lawyer involved in the case says that a certain mobile operator illegally sold e-wallets to White Sands.

In his remarks to Cairo 24, Lawyer Mohamed El-Azaly suggested that the app founders chose this mobile company since its e-wallet allegedly allows the purchase of digital money from outside Egypt.

The lawyer said the company may have sold more e-wallets than allowed in exchange for EGP 1,000 per wallet.

He also asserted that the company sold some of its customers’ wallets to the app officials without the customers’ consent, saying he has recordings proving that one of the founders received 800 wallets from the company.

The mobile company has not released any comment so far on the issue.

Bundles, commissions

The annual subscription bundles for White Sands initially ranged from EGP 300 ($19) to EGP 6,000 ($382), with daily commissions ranging from EGP 10.4 to EGP 264.

Shortly before its website disappeared, White Sands created annual bundles worth EGP 10,000 ($636) and EGP 30,000 ($1,910) with daily commissions of EGP 467 and EGP 1,469 respectively.

“I started to feel suspicious when they added new bundles in late December to exploit people’s greed and collect the money they had handed over to people,” a subscriber told Ahram Online.

Users with the EGP 300 bundle earned EGP 1.3 per like, while those subscribed to the largest bundle – EGP 30,000 – could earn EGP 8.9 per like, according to users interviewed.

Six million people subscribed to the app, according to the latest post by the app’s directors, El-Azaly said, noting that the app therefore amassed EGP 3-5 billion.

As per calculations, subscribers to the EGP 30,000 bundle should have earned EGP 528,660 per year, while the EGP 6,000 bundle should have earned EGP 95,000.

In remarks to Ahram Online, two of the users said they subscribed to a bundle worth EGP 6,000 and were receiving daily commissions, but doubts started when the company began to delay payments without clear giving reasons in late December.

Another one said that he received an offer from his friends to join the application but he did not have time to do the daily tasks.

“It seemed lucrative and had a quick financial return. But I was too lazy to click like on 55 video per day for the daily commission for the EGP 6,000 bundle,” he told Ahram Online.

He added that the tasks included liking videos on renowned media platforms, and that he was about to join when he saw that many of his friends were making money from the app. 

However, the news that has recently come out saved him from losing his money. "It could have been me!" he said.

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