Police has arrested a British – Nigerian man said to be the leader of Development Channel, an organization which Police have termed as a ponzi scheme out to fleece unsuspecting Ugandans.
A Ponzi scheme is a form of fraud in which a purported businessman lures investors and pays profits to earlier investors using funds obtained from newer investors.
Mr Charles Nwabuikwu Lambert, 44, was arrested by Police in Kampala for allegedly running a grand scam company, engaging in fraud and money laundering.
According to a statement by Kampala Metropolitan Police, the arrest of Nwabuikwu followed complaints by disgruntled workers of various transport companies who were planning to set ablaze one of the premises owned by Development Channel Company.
They forced their way in to lynch the Company Director, Charles Nwabuikwu faulting him over their unpaid arrears, police said.
One of the transporters told police that, Development Channel had since October hired a total of 63 PRADO SUVs to ferry various dignitaries around different parts of Uganda promising the owners daily income.
“However after accumulating profits the company decided to channel the monies into other ventures leading to an accumulation of 127 million Uganda shillings debt,” Police said in a statement.
Upon being contacted in regard to their payments, the company director fed the angry creditors on a number of excuses sparking off a scuffle and the consequent response by Kira Road Police to solve the concern.
“According to the complainants, the company perpetrated a complex scheme under the guise of a poverty alleviation company aimed at empowering Africans with a lifetime payment in a ruse designed to defraud victims located throughout Uganda”.
Following the several complaints, Police initiated investigations into the dealings of Development Channel in Uganda. Police says the investigations “revealed shocking ways of how hundreds of citizens had been duped into investing in a scam business”.
The scheme has been placing advertorial posts on media, infiltrating soft spot areas like schools, hospitals, churches inviting both skilled and non skilled job seekers promising a hefty pay.
The company marketeers lure the unsuspecting victims into buying iPads known as No Drop Out to Ugandans at USD 278 (Shs 1.04 million) after which the buyer fills a form and gets a profit sharing certificate.
The victims are then falsely promised a guaranteed monthly payment of USD 100 (Shs 370,000) for the rest of his life six months after receiving their profit sharing certificate, Police says.
One university graduate, also identified as a complainant told officers that he had been duped into buying substandard tablets and in return was provided with a certificate of share ownership however had now taken eight (8) months without receiving the promised dividends on his account.
Charles Nwabuikwu admitted to Police that he diverted the funds in a bid to expand the company and requested the complainants to be patient with him and agreed on period of time to pay back their money.
Over 74 dissatisfied clients have lodged complaints.
Kampala Metropolitan Spokesperson, ASP Luke Owoyesigyire warned the public against scamming companies that are constantly looking for new ways to fleece unsuspecting victims out of their hard earned cash.
“Such companies always invite, entice people to invest money into their various schemes, then recruit other people to form an investment chain and subsequently collapse when they run out of new recruits or when they fail to pay the promised benefits,” he said.
He added that people should not believe in everything that upcoming too good to be companies offer, especially before running a thorough background check on their credibility
On its website, Development Channel describes itself as “the world’s most comprehensive platform for increasing access to basic development needs between the developed and under developed countries and communities”.
This it says is done “through the use of 25 highly innovative and empathy driven companies helping to create a strong middle class, increase food security and build strong infrastructure among the world’s most disadvantaged”.
The same website carries an advert for employment opportunities for “80 very experienced; mature, dynamic and highly aggressive business development managers that will help conduct the Kampala sensitization program as well as the international pan-African establishment”.
For these positions, Development Channel promises USD 550 (over Shs 2 million) per month basic salary plus awesome bonuses in addition to various incentives offered every couple of weeks such as free computers, phones, trips, cars and much more.
Police say they are working together with various regulatory bodies like Capital Markets Authority (CMA) the Ugandan regulator of Equity and Securities to ensure the concerns of the aggrieved clients are settled.
This isn’t the first time money thirsty Ugandans are falling victims to the tricks of ponzi schemes which shortly after close their offices and vanish in thin air.
COWE (Caring for Orphans, Widows, and the Elderly), Triple9, TEAM (Together, Everyone Achieves More), Dutch International, D9, Telex Free and Adfast Inc are some of the schemes that have fleeced Ugandans in the past.