The Justice Department sent the principal figure in a massive pyramid scheme into preventive custody for at least three months, declared the case to be very complex, and revealed several details concerning the victims and the money involved. Juan Diego Toribio Mejia is accused of leading a group of persons in a convoluted scheme that took over two million dollars from 94 persons (along with over RD$7,250,500). The accused lured the claimants with promises of financial returns of as much as 17% per month on the money invested.
The case revolves around an entity called HDLS Digital Kingdom Investment Group SRL and a cooperative called Digicoop, Inc. that operated in 2021 and 2022 without any authorization from the Superintendent of the Stock Market.
The group led by Toribio Mejia convinced people to become part of the Dominican Digital Savings & Loan
Cooperative (Digicoop) to continue investing money in the HDLS Digital Kingdom Investment Group SRL which offered annual returns of 204% (or 17% per month).
Other sources mention the claimants were promised 165% annual interest rates.
Using digital platforms as well as crypto-currencies, the swindlers were able to extract over US$2.0 million from investors.
This is not the first time there have been major cases involving a pyramid scheme in the Dominican Republic. The promise of a “can’t lose” investment with very high returns is just too much of an allure, and too many people fall into the trap.
Usually, the very first people to be ensnared in the scheme do receive very handsome returns on their money, and they give testament that the scheme is “foolproof.” It is those who come in at later dates that lose everything, and this leads to the collapse of the swindle.
So, what to look out for? The basic rule of “If it is too good to be true, it is probably not true” comes into play here. The very solid-sounding names like Digicoop and HDLS Digital Kingdom SRL give the appearance of a sturdy business entity. The attractiveness of double-digit monthly returns is just like free honey—it is so sweet.
Diario Libre shares signs to look out for to avoid being a victim of a pyramid scheme. First, one must understand that the basis of a pyramid scheme is to use money of new victims to pay the interest owed to the prior investors, so new investors must be recruited all the time.
The Financial Action Group of the Caribbean lists five sure signs of a scheme to get your money:
- Large initial costs for participants
- A strong urging to get new partners rather than the sales of a service or product.
- The “company” lacks interest in knowledge regarding consumer demand regarding any
product. - The persons recruited are nearly forced to buy a product, such as membership in Digicoop in this case
- Participants are forced to purchase unnecessary things, again like the membership in the coop.
The well-known financial advisor and current Superintendent of Banks in the Dominican
Republic, Alejandro Fernandez Whipple, sent out a tweet that pretty much sums it up: “If it pays more than the market, without risk, in a short term, without regulation by any government entity, pays for bringing in others, involves “forex“ or crypto or CFDs, talks about or involves God and money….then it is a swindle!”
Read more in Spanish:
Listin Diario
Listin Diario
El Caribe
Diario Libre
13 February 2024