Rwanda blows whistle on fraud scheme

Business Daily Kenya:  David Macharia and Steve Umidha @PeopleDailyKe Rwanda’s central bank has banned an organisation with a large presen...

Business Daily Kenya: 

National Bank of Rwanda (NBR) Governor John Rwangombwa. On June 8 he wrote to 17 banks, including Kenyan institutions with branches in Rwanda, urging them to stop any money transfers to the pyramid scheme. Left, a copy of the letter sent to banks obtained from NBR’s twitter page. Photo/COURTESY BLOOMBERG

David Macharia and Steve Umidha @PeopleDailyKe

Rwanda’s central bank has banned an organisation with a large presence in East Africa including Kenya that has characteristics of a pyramid scheme.

Operating under the name, D9 Club, the firm is believed to have its origin in South America and has recruited Kenyans. “The D9 Club extending operations in Kenya, Uganda, Tanzania and Zambia is an illegal pyramid scheme in Rwanda thus regarded as scam,” said National Bank of Rwanda on its twitter handle at 10.57 am yesterday.

Last week, members of the organisation from Nyandarua and Laikipia met in Nyahururu where they bragged of huge weekly earnings dispensed in dollars and said its top officials visit the country next month where top “investors” will be rewarded with cars.

On June 8, National Bank of Rwanda governor John Rwangombwa wrote to 17 banks, including Kenyan financial institutions with branches in Rwanda, urging them to stop any money transfers to the scheme.

“It has come to the attention of the National Bank of Rwanda that an organisation known as D9 Club which uses an internet chain to recruit with characteristics of a pyramid scheme is extending its operations in the region, especially in Uganda, Kenya, Tanzania and Zambia.

It has also come to our attention that the promoter of D9 in Uganda has been running the operation in Rwanda through a bank account opened in Uganda,” read the notice letter.

D9 Club is believed to be an investment scam camouflaged as a legitimate business opportunity in the form of multi-level marketing programme being used by fraudsters to pitch to unsuspecting investors.

The revelation of the network comes barely two months following another alert issued by the Central Bank of Kenya (CBK) in a joint statement with Sacco Societies Regulatory Authority (Sasra) with stern warnings to the public to be on the lookout as unlicensed and unregulated deposit-taking entities and pyramid schemes were making big comebacks keen to make a kill from the upcoming August polls. CBK is yet to comment on D9 Club.

According to online sources, the club is not a multilevel marketing (MLM) or network marketing firm because in the legitimate MLM, participants are only compensated for their sales but in this case there is no real incentive for the sale of products.

According to Kenyans who have joined the scheme, there are four levels of entry — Trader Bronze; Trader Silver; investor and Trader Gold (see joining costs and earnings in the table above).

It is believed D9 Club is no different from the collapsed Deci and Clip Investment Sacco that went down as having stolen millions of shillings from gullible Kenyans Last year reports of another network, MMM Global Kenya emerged in Kenya with promises of up to 100 per cent returns to interested investors.

The scheme was said to be run by now convicted Russian fraudster, Sergey Mavrodi. To survive, any pyramid scheme must always suck in new converts to avoid collapse, and the exceptional growth in users is impossible to sustain. D9 Club, according to National Bank of Rwanda, shares some of these features and is warning its members to keep off at all costs.

“The purpose of this letter is to notify you of this scam and require you to put in place adequate controls to prevent transfer of funds to this scheme and stop its spread across the country,” wrote the governor.

The letter identified Magara Smart Protus as the promoter of the firm’s dealings as well as the bank account on which unsuspecting subscribers are been ripped of their hard-earned savings.

The post Rwanda blows whistle on fraud scheme appeared first on Mediamax Network Limited.

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