Ponzi scheme shakes Benin

COTONOU – More than 100 000 people in the tiny West African nation of Benin have lost their savings in a Ponzi scheme run by a now-defunct company that appeared to be publicly endorsed by the country’s president.

The government said in a statement last month that more than 130 000 people gave their savings to Investment Consultancy and Computering Services. Together they lost more than $130m, the statement said.

The corporation was registered as a nonprofit computer service company and was operating illegally as a banking institution. ICC was forced to close on July 1, and more than a dozen of its employees were jailed.

But the reverberations have echoed to the top of Benin’s power pyramid and now threaten President Boni Yayi, who appeared on television with ICC managers.

Television news shows showed Yayi and other top government officials posing alongside the managers of the investment firm. The images were reproduced on T-shirts. While investors interpreted Yayi’s presence as an endorsement, the president did not officially speak in favour of ICC during the appearances.

In the country of 8,7 million people, the average yearly income hovers arpound N$5 475. Many lost months to years of savings in the scam.

Perhaps the greatest swindle, some say, is the government’s role in the investment company. Many victims say the sight of government officials in the ads reassured them their money would be safe.

“We saw them on television,” said Pierre Dossa, a mechanic who lost his savings. “How could we not believe in it?”

Since the announcement that ICC’s activities were fraudulent, Yayi has swept his administration of those associated with the company. – Nampa-AP

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