CAIRO: A widely-reported pyramid scheme scandal came to an end after police arrested the man who swindled LE 180 million from 2,000 citizens in Al-Qalyubia.
The victims had invested their money in the Qalyubia-based company, which offered higher interest rates than banks. But the investors were neither able to obtain the interest rate regularly nor were they able to get their money back.
He was dubbed “Rayan Al-Qalyubia by the media due to the resemblance between his case and the infamous 1980s’ scam masterminded by Ahmed El Rayan, who was accused of collecting money from citizens for high-interest rate investment, but failed to provide the investors with regular revenues or return the money.
After the original Rayan incident, the government made illegal all types of investments that could turn into “pyramid scheme scenarios.
Ahmed Al-Sayed, lawyer, told Daily News Egypt that the penalty for involvement in “pyramid schemes could reach 15 years in jail. However, if the scammer returns the money, he’s acquitted immediately. “If he is still under investigation, he is released. If he has already stood trial, the sentences are dropped.
Al-Sayed explained that people are tempted to invest in such companies even though they are not registered legally. “The owners of these ‘pyramid scheme companies’ would announce secretly that they will offer special profit rates, either fixed or dynamic, to lure potential victims, Al-Sayed said.
These transactions are not registered with any official authority, preventing people from making legal claims for their money, he added.
These companies are not involved in any service-providing or production activities, he continued. They usually work under the umbrella of other legally registered companies.
