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Equity Bank freezes Ponzi scheme’s account

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The Bank of Uganda instructed Equity Bank to suspended an account belonging to Magara Smart Protus. FILE PHOTO | NMG

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Summary

  • Equity Bank has suspended an account belonging to Magara Smart Protus – the promoter of an online sports trading platform referred to as D9 Club.
  • The D9 Club, which is currently recruiting in Kenya, is an online platform requiring members to wire between Sh26,700 and Sh213,000 (and a signup fee of Sh5,200), promising “passive” weekly earnings of between Sh1,300 and Sh17,000.

Equity Bank’s #ticker:EQTY Uganda subsidiary has frozen an account belonging to a sports pyramid scheme following a recent complaint by the Rwandan authorities that the illegal operation, which has a presence in Kenya, was fleecing its citizens.

Equity, under the instruction of the Bank of Uganda (BoU), suspended an account belonging to Magara Smart Protus – the promoter of an online sports trading platform referred to as D9 Club.

The National Bank of Rwanda had in May warned the 17 banks operating in the country about the “scam”, asking them to the “prevent transfer of funds to this scheme and stop its spread across the country.”

The D9 Club, which is currently recruiting in Kenya, is an online platform requiring members to wire between Sh26,700 and Sh213,000 (and a signup fee of Sh5,200), promising “passive” weekly earnings of between Sh1,300 and Sh17,000.

The club’s promoters claim the high returns are derived from sports trading on a site called BetFair, which places bets on different sports and pays out “bonuses” every Monday for 52 weeks through bitcoins.

BetFair, which was founded in Brazil last year by a man called Danilo Santana, has recently caught the attention of Rwandese and Ugandan central bankers, forcing them to warn local banks and ultimately causing the closure of D9 Club’s account.

“Mr Magara’s account has been frozen as directed by the BoU. The matter is being handled by the regulator,” Equity Bank said in a statement, declining to offer details on how long the account has been operational and its closing balance.

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Equity’s Tanzania subsidiary, through a memo from the human resource department, went a step further to ask its employees enrolled in D9 Club to “immediately withdraw from such illegal schemes.”

Kenyans have in the past fallen victim of get-rich-quick schemes such as Deci and Clip Investment Sacco, leaving thousands of families devastated through break ups, suicides and deaths from stress-related illnesses.

A Kenya government inquiry in 2009 revealed that about 270 pyramid schemes took Sh8.1 billion from 121,205 Kenyans in the preceding year, exposing the extent of the scams.

When sought for comment about the D9 Club, the Central Bank of Kenya (CBK) sidestepped questions on whether it had flagged the platform and measures it was taking to protect Kenyans from the scam.

The CBK referred the Business Daily to a statement it released three weeks ago cautioning the public on the re-emergence of “unlicensed deposit-taking firms and Ponzi schemes.”