The Director of Cybercrime Unit of the Criminal Investigations Department (CID) of the Ghana Police Service, Dr Herbert Gustav Yankson, has cautioned the general public against seeming lucrative online investments as most of them are Ponzi schemes used in defrauding investors.
He said currently, his unit was investigating a number of such schemes (names withheld for security reasons) that had succeeded in defrauding several unsuspecting people of monies running into millions of Ghana cedis.
A Ponzi scheme is a form of fraud in which a purported business lures investors and pays profits to earlier investors using funds obtained from newer investors.
Investors are made to believe that those profits are coming from product sales or other means and are unaware that other investors are the source of apparent profits.
Dr Yankson explained that these online fraudsters, some of whom claim to be trading in bitcoin for example, pay huge returns which could be as much as 100 per cent interest within a period of three months, luring a lot of people to invest.
He said most investors did not even understand how the purported online trading was done but paid huge monies to those fraudsters because of the high interests promised.
Also, most investors have no idea of the location of the purported businesses but are only attracted by the benefits enjoyed by earlier investors.
He said initially, they paid these unrealistic interests and when they realised the numbers had increased, they gave excuses such as website upgrades or migrating unto a higher version.
“When people request for their investments, they pay with all interests accrued just to attract a higher number of people as they know people will market their platform and even increase their initial investment,” he explained.
Dr Yankson said with the cases they were currently handling, the websites used for those schemes were out of Ghana and so the police had to liaise with foreign counterparts, which could take time to trace the culprits.
He added that in some instances, the websites were taken down before the victims realised they had been scammed.
“It is very difficult to trace such activities as we cannot tell who runs the business or the location.
So far, the few people we have arrested claim they are either associates or marketers who only registered with them online and cannot tell their physical locations,” he said.
He said the so-called marketers and associates arrested by the police would be arraigned before court for prosecution as they represented these Ponzi schemes.
Dr Yankson, therefore, advised investors to ensure that the businesses they invested in had been registered and licensed to operate in Ghana with a physical office.
Bitcoin is a cryptocurrency, a form of electronic cash.
It is a decentralised digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
Earlier this year, the Governor of the Bank of Ghana, Dr Ernest Addison, at a media briefing to conclude the Monetary Policy Committee (MPC) annual meetings, said the necessary regulations to support the use of bitcoin and other cryptocurrencies currently did not exist in the country.
He said trading and using the popular cryptocurrency known as bitcoin in the country was not yet legal because it was not recognised as a legitimate form of currency in the country.
Dr Addison said a Settlements and Payments Bill was before Parliament, which would cater for the use of cryptocurrencies in the future.
A victim of a recent online scam who spoke to The Mirror on condition of anonymity, said he was introduced to the platform by a friend who had his investment doubled within two months.
He then sent his investment to a middle man who facilitated the purchase of the bitcoins worth GH¢25,000.
“I was then registered and saw my investment increase daily till last month when the website started messing up.
Later, I realised I had been scammed as the many emails and WhatsApp messages sent to the office of the investment firm were not replied,” he said.
He said together with some investors who had also lost huge sums of monies, he had lodged a complaint at the CID Unit of the police headquarters.