DMG, Illicit enrichment nightmare

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Los jornaleros emigraron hacia los pueblos a vivir de las utilidades

Give us our money back! Photo

The word “Pyramid” as related to the ancient Egyptian sites, lost meaning in Colombia this year. Rather, it became a word of nightmare for many who followed the DMG and crushed in their own financial crisis, causing a national scam. It is not other thing that an astonishing case of illicit enrichment and how it can let you in in poverty, so quick as you get billion of pesos.

Several Colombian companies suffered a financial collapse this year, far from what was happening in the Wall Street, of course. They were offering great interests to their customers (more than 150% per month!), causing that thousand of Colombians ran to put their money in their business. It worked quite good for the firsts and it meant lost for the last ones when it crushed. The government had to intervene in those companies and little by little discovered several irregularities in what is called the Ponzi Scheme, illicit enrichment and money laundering.

The Colombian mass media began to call those companies like “Pyramids“, because the Ponzi Scheme is known in Spanish as “Inversiones en Pirámides” or “Esquema Ponzi“. However, some of those companies were involved in money laundering for other illegal activities like drug trafficking.

Last November the situation became of social unrest, especially at the south of Colombia, when many affected people denounced the owners of DRFE and the D.M.G Group Holding S.A. The situation made that the government declared social emergency measures on November 17th, the close of DMG (the acronym of a society of companies) and the capture of David Murcia Guzmán and his six partners, accused as founders of the irregular business. Days before, they fled the country carrying thousand of million of pesos with them.

Murcia, 30 y.o., was captured by the Panamanian police that month and deported to Colombia accused of illicit enrichment and links to mafia. This man, who comes from popular and that became for a short an idol of success in business, competing with banks, was compared by the government of president Uribe as a leader of mafia and his business like the “last pigtail” of drug traffic cartels, guerrilla and paramilitaries trying to “wash” their money through tricking activities to the Colombians.

To open a prosecution to Murcia and his associated was one thing and it proved to be easier. To repair the problem was other and it has been proven difficult so far. Most of the DMG customers were no others than families from poor areas of Colombia, attracted with the possibility to get rich through business investment in the bright proposal.

President Uribe promised that his government would do whatever to help the poor inverstors to get back their money. He annouced by 18th November that the police had seized some USD 40 million and that some finance companies  were returning the money to investors (rf. “Colombia Declares Scam Emergency“, BBC, 18th November 2008.)

The most affected states were Nariño and Putumayo, southern Colombia. There were cases where the 90% of the population of a town invested in DMG. According with the Commercial Chamber of Pasto, the productivity of the whole state of Nariño downed 4,1% due to the Ponzi scheme (Pyramids), because several farmers and workers stopped their labors to relay in what they thought was the best way to overcome poverty. The crush of the scheme generated fury in many customers who even attacked leaders and properties of the companies. The city of Mocoa, the provincial capital of Putumayo state, was under siege by angry people who have lost their savings in the case, while the leaders of the Pyramids were fleding the regions and even the country with million of pesos in their pockets.

Obviously, President Uribe is right when he said that this is a consecuence of the activities of drug traffick, guerrilla and paramilitaries. What is not sure is if this is the last tails of the action of illegal money going around into the Colombian society and economy, when the consume of drugs continue increasing in rich countries, buying to Latin American mafias their drugs. It is an example of how the mafias can crush a society and, of course, those who pay at the last are the poorest.

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