PAY back the millions you've taken illegally from people or face the wrath of the law. That was the message of Bank of Namibia (BoN) Governor Ipumbu Shiimi yesterday to the pyramid scheme masterminds of U-Care, Gold Prime Time and Penta Gold.
Shiimi said the BoN had finished its investigation into the business activities of the three schemes and found them to be illegal.
"They are indeed pyramid schemes," Shiimi said.
"These people are making money by stealing other people's money," he said. The BoN has given U-Care, Gold Prime Time and Penta Gold 14 days to fully refund their members. If they fail, the BoN will allow "the law to take its course", Shiimi said, calling on those who have lost money to the schemes to contact the central bank. The BoN will use its power to initiate both civil and criminal steps against the schemes, he said.
It will apply to the court to have the schemes declared insolvent and it will hand them over to the police. If prosecuted and found guilty of contravening the Banking Institutions Act, those running the pyramid schemes can face fines of up to N$1 million, prison terms of ten years, or both.
The BoN couldn't give an indication of how much money the three schemes need to pay back to members. In the case of U-Care, it should be at least N$8,5 million.
U-Care, which markets itself as a "charity funding company", claims to donate 20% of its monthly contributions to charity. According to U-Care's bank statements for August, given to The Namibian by the scheme's local representative Bianka O'Callaghan recently, the 20% paid to charities locally so far amounted to nearly N$1,7 million.
The biggest beneficiary has been the Organisation for the Empowerment of Widows/Widowers and Orphans of HIV and AIDS in Namibia (Oewona), of which First Lady Penehupifo Pohamba is the patron and founding member. By August, Oewona had received N$638 460.
O'Callaghan told The Namibian recently that Oewona had severed all ties with U-Care after the paper linked it with the scheme in October.
Shiimi yesterday didn't want to speculate on whether the charities which had benefitted from U-Care would have to give back the money so that the scheme could refund its members.
"Where and how they [U-Care] are going to recover it [the money], I don't know. I don't want to make it the BoN's business," he said. U-Care must pay back the money or face the law, he said.
To join U-Care, a member must pay N$150 per month and canvass three more members, each also paying N$150 every month. For this, the original member, or group leader, earns N$10 commission per month, while 20% of the group's total contribution goes towards a charity nominated by the group. Up to a certain level, the more members a group leader recruits, the bigger the commission, bonuses and rewards he or she qualifies for.
Shiimi wasn't impressed by U-Care's charity drive. He said the 20% is a "small amount".
"A donation is a donation. Why would you want to make money out of it?" he said.
He also reacted to accusations from certain outlawed schemes that the BoN has taken a soft stance towards Amway because some of the central bank's senior managers belong to the multi-level marketing scheme.
Shiimi denied the accusations of "leniency", saying if anyone knew of a central bank employee involved in a pyramid scheme, they were welcome to contact the BoN governor, who would personally take disciplinary action against such employee.
Amway was investigated by the BoN and, like in other countries, was found to be a legal entity, Shiimi said. The "key difference" between Amway and outlawed schemes is the fact that there is a "tangible product", as it sells a range of goods, he said.
Shiimi urged people who belong to U-Care, Gold Prime Time or Penta Gold (or its joint venture under Pincode) to "discontinue" their membership immediately.
Anybody who has lost money to any of these entities should contact Bo's director of banking supervision, Romeo Nel, at telephone number 283 5040 in Windhoek.