Egypt's Pyramid-Filled Valley Unveiled

Sucker Punched: Financial Pyramids in the Capital, Exposed

Kickstarting the year in our bustling capital, two financial pyramids — "Zhuldyzai" and "Aiyauylim" — were brought to justice. Disguised as a ticket to riches, these schemes lured innocent citizens with promises of quick earnings from participating in tenders. The catch? A hefty investment of 1 million tenge, with supposed profits exceeding 90% in just 40 days. And if that wasn't enough, participants were also promised a 10% cut from each new recruit they brought on board. A total of 60 unsuspecting victims fell prey to these scams, resulting in a staggering 490 million tenge in damages.

The mastermind behind "Zhuldyzai" and "Aiyauylim" was no stranger to extravagant living. Using investors' funds, this shrewd individual acquired an elite apartment worth 69.5 million tenge, cleverly registering it under a relative before transferring it to a third party upon investigation's beginning. The ruse was quickly uncovered, leading to an arrest on the property and sentencing of the financial pyramid organizers to prison terms ranging from 5 to 7 years. A compensation of 72 million tenge was provided to the victims.

Unfortunately, the story of "Zhuldyzai" and "Aiyauylim" is far from unique. This year alone, the AFM has unmasked the illicit activities of multiple financial pyramids. One such example, "Asar Baspana," was exposed in a nationwide operation conducted with the General Prosecutor’s Office of RK. Disguised as a consumer cooperative, "Asar Baspana" offered investors the chance to invest in various goods, ranging from household chemicals to real estate, promising monthly returns of up to 30% of the investment amount. During raids, over 1.2 billion tenge and 13 luxury vehicles were seized.

Financial pyramids like "LIVEGOOD" have also surfaced, masquerading as network marketing businesses for the sale of dietary supplements. In reality, they thrive on the contributions of new investors. Over two years, more than 6,000 citizens contributed money, paying $50 for a subscription and then making monthly payments, hoping for promised bonuses of up to $2,000 per month. The founder’s illegal profits fueled real estate acquisitions in the capital and cryptocurrency purchases on Western exchanges. However, the creator's luck ran out when he was detained while attempting to flee to Turkey.

The allure of getting rich quick often leads investors to the doorstep of pyramid schemes like "Happy Life KZ." Pitching itself as a purveyor of biological additives, "Happy Life KZ" demanded anywhere from 7,500 to 2 million tenge in exchange for entry. Despite eight years of operation, the scheme managed to coerce over 286 million tenge from its victims, many of whom are pensioners. The pre-trial investigation of this case is still ongoing.

So here's a harsh wake-up call: investments in financial pyramids only benefit the crooks running them, not the hardworking people who sink their money into them. Evidently, many are still negligent, falling victim to old, well-known schemes designed to inflate new bubbles.

Luckily, we've got your back. Stay vigilant, and remember these warning signs that inevitably point to a financial pyramid:

Lack of proper licensing or registration for operating in the securities, banking, or debt collection market.
Aggressive and pushy ads promising high returns and passive income.
Offers to buy clients' property at above-market prices or conversely, at below-market prices with upfront payments.
Joint venture opportunities with mandatory initial capital contributions.
Mandatory purchases of a certain product or service for a specified amount and recruitment of additional individuals for no retail sales.
Cash, card payments, or terminal transfers to electronic wallets.
Unclear business activities with no obligation to the investor or no way to retrieve funds, should the company default on its obligations.
Requirement for preliminary payments to join the company's activities.
Promises of high returns significantly exceeding market indicators with guarantees (except for bank deposits).
Similarities between the names, symbols, or advertising of respected companies or brands in the projects.
Alternatives to bank loans funded by investors' funds.
Vague contract terms.
absence of financial reporting.
Registration in offshore jurisdictions, such as Bahrain, Cyprus, Seychelles, St. Lucia, or the Cook Islands.
Investments in non-existent projects or assets with guaranteed income far higher than market levels.

Remember, joining a financial pyramid is optional and unprotected, so don't expect a guaranteed return on your investment. Be wary, take your time, and conduct thorough research before making any decisions. For more information, visit the official websites of the Agency for the Regulation and Development of the Financial Market in Kazakhstan, or the Financial Monitoring Agency to stay informed about possible financial pyramids and fraudulent activities. And, if you suspect economic crimes, report them using the Telegram bot "AFM Insider" for guaranteed anonymity. Stay safe, folks! 🛡️💪🚀

Sources[1] Financial Monitoring Agency of Kazakhstan: "Trends in the Financial Pyramid Market in 2021" and " tightened supervision over virtual assets in 2022"

The Finance Ministry has urged the public to remain cautious, as they continue to uncover numerous financial pyramids operating within the business and industry sector. Such schemes, like the recently exposed 'Asar Baspana' and 'LIVEGOOD', disguise themselves as legitimate ventures but in reality, thrive on investors' funds.

Crime-and-justice authorities are persistently on the lookout for these frauds, bringing the masterminds behind 'Zhuldyzai' and 'Aiyauylim' to justice this year, resulting in prison sentences and victim compensation.

In the realm of general-news, casual investors must stay vigilant and informed, having an understanding of the red flags associated with financial pyramids to protect their hard-earned money. The Financial Monitoring Agency offers invaluable resources for this purpose, encouraging the public to stay up-to-date on potential pyramid schemes and fraudulent activities.