Colombians Riot in Anger at Pyramid Scam

Riots have flared across Colombia over the collapse of a pyramid scam that left thousands of investors broke and furious.

Police used tear gas and batons to quell the crowds when they tried to storm the offices of rogue investment firms, some of whose staff had left notes taunting their victims for being gullible.

Mobs smashed doors and windows in a vain effort to enter the premises and recoup savings, or at least exact vengeance, on fraudsters who had vanished overnight.

"Dear investors, thanks for trusting us and depositing your money," read one note posted on the door of a company in the south-western province of Cauca. "Now, for being stupid and believing in financial witchcraft, you will have to work for your money," it said.

Enraged investors looted the company's office before being subdued by riot police. The umbrella company, Fast, Easy and Effective Money, was known by its Spanish initials DRFE.

In Pereira, police arrested two loan managers fleeing out the back door of an investment office with four suitcases filled with cash. The men allegedly tried to buy their freedom by offering some of the money only for bribery to be added to their charge sheet.

The government has launched an investigation into how a network of at least 66 establishments in nine cities conned so many people out of their savings. President Alvaro Uribe urged congress to pass a law penalizing the fraudsters.

The scheme appeared to be a money-laundering enterprise by narco-traffickers, said Oscar Naranjo, the police chief.

"Everybody was full of hope for December, for the holidays. The people thought their lives would change," one man who said he had lost the equivalent of $1,500 told AFP in Popoyan.

Luis Alberto Sierra, part of a crowd gathered outside a DRFE office in the town of Armenia, told Caracol TV he had lost some ?11,400, a fortune for most Colombians. "I mortgaged my house, invested all my savings," he said.

With high fees a deterrent to mainstream banks, many people in the poor South American country found the pyramid scheme's promise of 150% interest rates irresistable, especially in the months leading up to Christmas.

Francisco Santos, the vice-president, offered little solace to those who had been duped. "When someone promises to double your money in six months they are trying to trick you. Nothing is free in this world and that is not going to change."

Other Colombians mingled sympathy for the victims with scorn for their gullibility and get-rich-quick aspirations. "They KNEW this was going to happen," commented one person to El Espectador newspaper.

The spectacular collapse in 1997 of a pyramid investment scheme in Albania defrauded tens of thousands of people out of ?1bn, triggering anarchy and the intervention of an Italian-led European security force.