Thousands left penniless after collapse of Ponzi scheme

by Cahal MILMO

The savings of more than 100,000 people in Benin have been lost in a pyramid scheme, prompting calls for the President of the tiny West African country to be impeached after he appeared to endorse the investment scam.

Thousands of families put money into Investment Consultancy and Computering Services (ICC) as word spread of its ability to offer returns of between 50 per and 200 per cent to investors while it used its apparently bottomless funds to finance health clinics, feed orphans and make large donations to Christian groups.

Women sell produce at a market in Benin, where most people live on $2 (Euro 1.30) a day. More than a quarter of the population has been directly affected by the Ponzi scam.

But the dream of quick wealth evaporated last month when ICC was forced to close, leaving behind it 130,000 people who had invested their savings and losses of about $130m (Euro 84m) in a country where most subsist on $2 a day. Many families had pooled their investments, meaning that up to a quarter of the nine-million strong population has been directly affected by the scam.

Lambert Saizonou, 40, an electrician, was typical of many victims, having poured his savings into the Ponzi scheme in the hope that he could buy his first house. He said: "They promised me an interest rate of 200 per cent. Now I must start saving again, little by little." Anger against the authorities, who at best failed to stop ICC trading when it was not registered as a bank and at worst turned a blind eye to a fraud into which thousands of people poured their life savings, coalesced this week into a vote by more than half of Benin's MPs calling for President Boni Yayi to face impeachment proceedings.

Mr Yayi, a former development banker elected in 2006 on an anti-corruption ticket, was seen on television news bulletins posing alongside other government officials with managers of the investment company. The images were reproduced on T-shirts and in advertisements, prompting many investors to interpret the presence of the President as an endorsement.

Adrien Houngbedji, a leading opposition politician, told the Associated Press: "We have elected a chief of state to protect the people. He has betrayed the confidence placed in him by the people, and he should be prosecuted before the high court of justice." ICC officials relied on word of mouth to attract clients, who were met by consultants promising attractive returns. Guy Akplogan, the company's director, said in a television interview earlier this year: "We are God's workers." The scandal, which has already prompted street protests in the capital Porto Novo, threatens to cause upheaval in what has been hitherto one of the most stable countries in West Africa, cited approvingly by Western diplomats for its independent parliament, civilian control of the military and comparatively free press.

Mr Yayi has attempted to limit the damage to his administration by cracking down on anyone associated with ICC.

Last month he sacked his interior minister, Armand Zinzindohoue, who was accused of providing bodyguards for the company's bosses, and chief prosecutor Georges Constant Amoussou, who was alleged to have blocked an investigation into the scam when concerns were first raised last autumn. About 13 ICC executives have been jailed for offences including fraud.

The government has set up a commission to investigate the scandal and vowed to rake back funds by seizing the assets of ICC managers, including luxury cars and villas. Candide Azani, a government spokesman, denied that Mr Yayi had personally approved ICC, saying: "This is a private affair between a business and its clients. Because the people have been robbed, the government is intervening for the security of its citizens."

- The Independent