Pyramid schemes are back

This is according to banking registrar Errol Kruger, who says in a Business Day report that the Reserve Bank\'s department of banking supervision has investigated about 40 unregistered businesses or investment schemes. Kruger said the schemes, which may have had up to 1 000 members in the past, were now more complex. The department\'s annual report for last year says: ‘They offer exorbitant returns on investment, luring depositors on a large scale. In recent cases, it has been found that the managers often fraudulently justify the exorbitant returns by stating that funds taken from the public will be invested in lucrative property developments.’ To begin with, the schemes go undetected because members believe they will benefit. But when a scheme runs its course, those at the losing end turn to the authorities. Once the schemes have been identified, the Reserve Bank moves to close them. Kruger said it took about three months to investigate, ‘but we believe we are closing them as fast as they come in’. Full report in Business Report