Kyrgyzstan: No Money Back for Robbed Investors
Fraudsters invent new ways to trick the gullible out of their savings.
Kyrgyzstan: No Money Back for Robbed Investors
Fraudsters invent new ways to trick the gullible out of their savings.
The collapse of the latest in a series of get-rich-quick scams has angered Bishkek residents who invested all they had in it.
A firm calling itself World Interprise Company Ltd appeared in Bishkek in January offering people an opportunity to earn some quick cash by working at home.
Large-scale advertising on television and in the press drew clients to the firm's offices, where they were given beads and thread to make into costume jewellery.
For each set of beads they had to pay 300 soms (about six US dollars) but that seemed
reasonable as the money would be refunded with a profit of about 50 soms when the work was handed in.
The first wave of applicants mostly invested small sums, and they did get their money back. They were then encouraged to invest much more - hundreds of dollars in some cases - and they recruited friends and relatives to the scheme, which mushroomed as a result.
Most of the home workers whom IWPR interviewed are unemployed or else they work in the public sector and have not received their wages for a long time. Any opportunity to earn some money was welcome.
Kanym Beishenalieva has not been paid her state-sector salary for three months, and was keen to make some money. "I saw an advertisement on television and pawned all the gold I had bought back in Soviet times, for about 400 US dollars," she told IWPR.
Then, in early April, the World Interprise offices closed down, and people who had deposited their life savings found themselves duped, their money gone, and left with a pile of unsaleable beads.
Kyrgyz police have taken statements from about 700 people, but up to 6,000 are thought to have lost their money. Police official Kanat Amankulov said that as of the end of April the fraud was calculated at 65,000 dollars.
Officers have detained one of World Interprise's managers but the owner has disappeared, reportedly fleeing to Russia.
Some people were so frustrated that they broke into and ransacked one of the branches of the firm, trying to recoup their losses. Others sent a letter to the government demanding that it find World Interprise's managers and return the money.
"I deposited 40,000 soms," unemployed Bishkek resident Nurbek Jakypov told IWPR. "There are even people who deposited 140,000 soms. If we don't get our money back, we're going to protest outside parliament."
Many think the government is culpable, and some think it should repay the money from its own coffers.
"The state should have warned us about such scandals in other countries and then we would have avoided this," said Raya Sulaymanova, a mother of five who lost 20,000 soms.
Police officials told IWPR that they were shocked by the scale of the fraud - and also by people's naivete and credulity. Joldoshbek Buzurmankulov, the head of the interior ministry's press office, told IWPR, "Fraud is now assuming new forms, under the guise of providing jobs or home working."
According to Almaz Esengeldiev, a law professor at the American University in Central Asia, there have been financial scams in Kyrgyzstan before, but they have become much more sophisticated and larger in scale. The Kyrgyzstan National Bank's office in charge of monitoring financial services reports that in the last two years three major frauds have been uncovered.
Two of them involved pyramid schemes. In one, known as Golden Ring, the organisers sold people certificates for 15 dollars. Each participant was supposed to sell three certificates in order to move up the list. They were promised that once they got to the top they would automatically receive 32,000 dollars. After running for several months, the scheme collapsed in 2001.
Fraudulent businesses are making a killing because of the poor state of the economy. The International Labour Organisation puts Kyrgyz unemployment at between seven and eleven per cent, but the true figure is undoubtedly much higher.
Yrysbek Omurzakov, a human rights activist, sympathises with the plight of World Interprise's robbed clients, but holds out little hope of redress. "This is a case where investors won't get anything but words of comfort," he said.
Maria Muratalieva is an IWPR contributor in Bishkek
