Maldives Police Service (MPS) has begun an investigation on a private company allegedly running a Ponzi scheme that is luring unsuspecting investors.
A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors, leading victims to believe that the profits are coming from legitimate business activities.
The police service stated it has been notified by the relevant authorities that a company has been running what appears to be a Ponzi scheme and that an initial probe has determined that a criminal investigation was needed. MPS stated that more information will be disclosed as the investigation proceeds and urged citizens to be wary of investment opportunities from unregistered and unlicensed parties.
Additionally, Maldives Monetary Authority (MMA) has urged the public to be wary of fraudulent schemes run on social media, after being notified of a fraudulent scheme run on social media promising large, immediate profits in return for an investment. MMA stated it was a Ponzi scheme, where funds from existing investors are used to pay new investors. The central bank said such schemes are not sustainable and would result in major losses to investors as soon as the cycle of the scheme is broken. It added that even the banks will not be able to return the invested funds if the operators of the scheme do not return the funds.