Poles continue to fall prey to financial pyramids

Despite the huge stir caused in 2012 by the para-bank Amber Gold scandal, Poles continue to be voluntary victims of financial pyramid scams, the local media reported June 14, 2013.

“We regularly received an interest of PLN 12,000 on our bank account,’’ a victim of the most recent scam, who lost more than PLN 100,000, told Polish daily Rzeczpospolita.

The fraudster, Krzysztof Sz., impersonated an investment fund employee, convincing celebrities and football players to invest a minimum of PLN 100,000. He built up a client base using valid investment advisor certificates, and policy and contract blankets, to make his business appear legal. He promised a 12 percent return per quarter.

The mechanism worked and the fraudster was able to pay-out interest to customers for two years. The scam was reported in April 2013 when one of the investors received a letter, which explained that a delay in payment resulted from debts owed by the fraudster. The strange letter prompted the investor to hire a private detective agency, which immediately reported the scam to the authorities.

The investigation continues, and so far no official charges have been issued.

Krzysztof Sz. has absconded, together with his wife, and has the status of a missing person, however he does not figure on the police wanted list.

Police investigators claim that asset recovery may be impossible as financial pyramid owners are usually left with little funds, once the pyramid loses solvency.

Amber Gold, which was accused of embezzling some PLN 53 mln from its clients in mid-2012, brought to light negligence in controls over banking and lending companies in Poland.

As many as 133,000 Polish citizens have been victims of financial pyramids in the last five years, according to a recent report by the Prosecutor General.