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How the National Consumer Commission busted a grocery pyramid scheme

4 August 2020 6:00 PM
Tags:
NPA
Ponzi scheme
Pyramid schemes
National Consumer Commission
Up money

Director of prosecution Joseph Selolo says there is no victim in this case and the funds will be forfeited to the state.

The National Consumer Commission has briefed the media on the outcomes of the "Up money" investigation and cautioning citizens to not get caught up in pyramid schemes during the COVID-19 pandemic.

National Consumer Commission director of prosecution Joseph Selolo Joined Ray White on Afternoon Drive to explain how the WhatsApp gifting pyramid scheme that has cheated money from more than 230,000 vulnerable South Africans with the promise of providing grocery packs was able to be caught.

Selolo says they were able to trace the amount of money from when they started on 6 February 2020 until 8 July 2020, during which R18-million was acquired and spent on two luxury cars.

He says with the help of other law-enforcement agencies they were able to discover that the funds that were in the “Up money” account were registered in the name of one of the directors of the scheme.

We had to stop the flow of funds, therefore we then requested NPA to freeze and obtain preservation orders for the assets.

Joseph Selolo, National Consumer Commission's Director of Prosecution

RELATED: Ponzi schemes on the rise during economic downturn

Members were required to join the pyramid scheme for R180 and recruit five others to receive a pack of food.

Selolo says there is no victim as the Consumer Protection Act states that no one should participate, join or promote a pyramid scheme and therefore the activity is illegal.

There is no victim in this case, everyone who is involved will be prosecuted and the funds will be forfeited to the state.

Joseph Selolo, National Consumer Commission's Director of Prosecution

Listen below for the full interview ...


4 August 2020 6:00 PM
Tags:
NPA
Ponzi scheme
Pyramid schemes
National Consumer Commission
Up money

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