Reuters top ten news stories delivered to your inbox each day.
You are here:
Business & Finance
The Great Debate
Do More With Reuters
Make Reuters My Homepage
Support (Customer Zone)
About Thomson Reuters
Cash scandals hit rich, poor Latin Americans alike
Wed Mar 11, 2009 11:21am EDT
Email | Print |
| Reprints | Single Page
By Patrick Markey
BOGOTA (Reuters) - Colombian college teacher Mercedes Diaz has little else in common with mattress maker Henry Moreno, but they both know the bitter sting of investment schemes that promise high returns only to collapse in scandal.
Latin America's poor and working class are more often the victims of get-rich-quick scams, but now some of the more well-heeled are feeling similar pain since U.S. bank Stanford crumbled under the weight of massive fraud charges.
The region's professionals and well-off pensioners were among the biggest investors with Stanford owner and billionaire, Allen Stanford, who was hit with accusations he fraudulently sold $8 billion in certificates of deposit from his Antigua operation.
From Mexico City to Quito, retirees sporting designer purses have waited with Blackberry-twiddling bankers to reclaim cash from Stanford, once seen as a guarantee of high returns or a safe haven offshore account in an often unstable region.
"We thought it was something solid, with a lot of years and tradition," Colombian Diaz said recently lining up outside a Bogota university hall with other clients to transfer her cash from a local Stanford brokerage to another fund.
A U.S. lawyer for some Latin American investors says his clients want to keep their names confidential, fearing they could be targeted by criminals if word gets out about their wealth.
Lawyers and investors say wealthy Latin Americans also bet with Bernard Madoff, the Wall Street trader accused of masterminding a $50 billion Ponzi scheme stretching from Florida to Europe. He is expected to plead guilty this week.
Investors are still counting the cost of those schemes, but Latin America has a history of scams targeting the poor.
Hundreds of thousands of Colombians like Henry Moreno got burned last year in schemes with names like "Money, Fast, Easy and in Cash" that sparked riots and worries over the country's already sputtering economy when they imploded.
Moreno, who makes mattresses in a working-class Bogota neighborhood, said he and his brother sold an apartment and took out bank loans to invest in two schemes that later imploded. Now he is waiting to get his money back after the government took over one of the companies and jailed its director on money-laundering charges.
"All that money is lost, they haven't told me anything, nothing has been solved," he said. "It's frustrating to have no money, and to pay back the bank I have to work even harder."
For many Colombians, already feeling the pinch in the global economic slowdown, their local "get-rich-quick" schemes seemed like an alternative to banks, who they say charge too much for holding basic savings accounts.
Colombian authorities say hundreds of thousands of people are trying to reclaim investments in the pyramid schemes that offered returns of up to 150 percent.
In neighboring Ecuador, hundreds of people plundered stores in Machala city in 2005 to demand their money back after a public notary ran a $400 million pyramid-style scam.
The notary died just as frantic investors tried to rescue their funds. An angry mob even dug up his body to make sure he was dead. But most were never able to recover their cash. Continued...
View article on single page
Dalai Lama hopes Beijing will use more common sense
also on reuters
Is Apple developing a touch-screen PC?
Analysts: The state of al Qaeda
Slideshow: The power of coal and those who work it
More International News
Teenage gunman attacks German school, kills 15
North Korea accuses U.S. of plotting attack
Anti-narcotics drive fuelled drug cartels: U.N.
Former Saddam aide jailed for 15 years
China navy officers harangue U.S. over sea spat
More International News...
Stanford Latam clients don't want names known
A selection of our best photos from the past 24 hours. Slideshow
Most Popular on Reuters
Museum finds "secret" message in Lincoln's watch
Apple orders 10-inch touchscreens for third quarter: source
CORRECTED-Protesters target U.S. foreclosed-homes auctioneer
U.S. intelligence candidate pulls out after objections
45 percent of world's wealth destroyed: Blackstone CEO
China navy officers harangue U.S. over ocean spat
China navy officers harangue U.S. over ocean spat
China exports slump, IMF warns on toxic banks | Video
Motive unclear in Alabama shooting spree | Video
Exclusive: Bernanke says AIG tightens grip on perks, pay
Most Popular Articles RSS Feed
Zimbabwe mourns nation's ''mother''
Deadly multiple shooting in Alabama
Official: US China tensions mount
NeoMedia aims to save 'old media'
The Overstock economy
Gold outlook retains luster
Democrats cool to Obama budget
All-at-once or step-by-step?
Tibetan life 'hell on earth'
Wall Street roars on Citi
Most Popular Videos RSS Feed
Dalai Lama slams China over Tibet "suffering"
The Dalai Lama said more and more Chinese were beginning to see a problem with Beijing's rule over Tibet, lamenting how the homeland he fled 50 years ago had become a "hell on earth." Full Article | Topics
Heavy security as Tibetans mark Dalai Lama's exile
China's Hu demands wall of stability in Tibet
Question marks over succession of Dalai Lama
Factbox: Historical ties between China and Tibet
The global destination for corporate leaders, deal-makers and innovators
Knowledge to Act
Help and Contact Us |
Advertise With Us |
Interactive TV |
Reuters in Second Life |
Site Index |
Thomson Reuters Corporate:
Professional Products |
Professional Products Support |
About Thomson Reuters |
Latin America |
United Kingdom |
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.