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Tuesday, 20 April 2021

Egypt prosecution investigating alleged EGP 1.5 bln pyramid scheme in Minya

The two suspects allegedly collected EGP 1.5 billion from victims in Minya governorate

Zeinab El-Gundy , El-Sayed Gamal El-Din , Wednesday 3 Feb 2021
Hamada El-Sawy
Egypt's Prosecutor-General Hamada El-Sawy
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Egypt’s Public Prosecution announced on Tuesday that it arrested two men who set up a pyramid scheme in northern Upper Egypt after their victims voiced their complaints on social media.

According to the prosecution’s statement released on Tuesday, its social media unit found a video clip online showing two men speaking about investing other people’s money in a way that violates the law.

On 31 January 2021, the prosecution received a complaint from a citizen about one of the suspects, who posted several videos online calling on people to invest their savings in his company, which he said operates several commercial projects and promised a high monthly return on investment. 

According to the prosecution, the victim deposited EGP 1 million in one of the men’s bank accounts, but after a period of time, the suspects did not pay the man the revenue he was promised and they evaded him when he tried to contact them. 

Two other men reported the suspects in a similar incident, according to the prosecution’s statement.

Based on the police investigation, the two men collected money from citizens and claimed to invest it in a commercial project through their company Al-Aqsa For Commerce. The suspects promised to give their clients a monthly interest rate of over 17 percent, sources told Ahram Online.

Pyramid scheme

According to sources from Minya who spoke to Ahram Online on condition of anonymity, the suspects gathered an estimated EGP 1.5 billion. 

The suspects allegedly started collecting money from citizens in the villages of Maghaghah and Bani Mazar in Minya over the past three years, claiming that they were investing in the marble industry and were importing materials from China, offering a monthly interest rate that is higher than the official interest rate offered by banks, claiming they had “state approval.”

A source told Ahram Online that entire villages put their life savings in this scheme.

In November, the suspects started to delay in paying the return on investments and their victims took the matter to social media.

The suspects claimed in one video that they were supplying the government with marble for construction at the New Administrative City, and that the government was taking a long time to pay due to red tape.

In another video posted in late January, they claimed that their Chinese partners in Cairo and Dubai left for China due to the coronavirus pandemic.

In an attempt to reach a solution without resorting to the authorities, the locals in the villages formed a council to negotiate with the two men in an attempt to retrieve their money.

In media statements to ONTV TV show Last Word, one of the members of the council claimed that they were attempting to retrieve about EGP 600 million out of EGP 1.5 billion collected by the two men.

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