Wednesday, December 28, 2005

Ecuadorean Pyramid Scheme

An AP story (here) discusses the collapse of a long-running pyramid scheme in Ecuador that may have been used to help launder profits from drug transactions.  Jose Cabrera, a notary, had been collecting funds in $10,000 increments with a promise of 10% interest from investors for over twenty years.  Cabrera died of a heart attack earlier in 2005 in a scene described by his 18-year old girlfriend that involved smoking cocaine and taking Viagra -- Cabrera was 71-years old at the time of his death, so that explains the presence of at least one drug.  Since then, there have been problems for the 6,500 investors, many of whom were members of the military and also include a judge and the wife of a former defense minister.  Seventeen soldiers were charged with criminal violations for flying to Cabrera's home to  try to reclaim their investments.  The government estimates that Cabrera managed $800 million as part of the investment program.  The shame is that, unlike the old Grateful Dead song, Cabrera was livin' on much more than reds, vitamin C, and cocaine. (ph)

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