Benin’s government caught up in costly Ponzi scheme
COTONOU, Benin — More than a hundred thousand people in the tiny West African nation of Benin have lost their savings in a Ponzi scheme run by a now-defunct company that appeared to be publicly endorsed by the country’s president.
The government said in a statement last month that more than 130,000 people gave their savings to Investment Consultancy and Computering Services. Together they lost more than $130 million, the statement said.
The corporation was registered as a nonprofit computer service company and was operating illegally as a banking institution. ICC was forced to close July 1, and more than a dozen of its employees were jailed.
But the reverberations have echoed to the top of Benin’s power pyramid and now threaten President Boni Yayi, who appeared on television with ICC managers.
Television news shows showed Yayi and other top government officials posing alongside the managers of the investment firm. The images were reproduced on T-shirts. While investors interpreted Yayi’s presence as an endorsement, the president did not officially speak in favor of ICC during the appearances.
In this country of 8.7 million people, the average yearly income hovers at $750. Many lost months or years of savings in the scam.
Electrician Lambert Saizonou, 40, planned to use investment earnings to buy his first house. Now he has lost all of his savings. Jobs are scarce, and Saizonou worries it will take years to save to buy a home for his family.
“They promised me an interest rate of 200 percent,’’ he said. “Now I must start saving again, little by little.’’
Company manager Herman Menton, 32, lost nearly $1,500 after investing in ICC for a year. Like many of ICC’s investors, Menton was referred to the company by friends who had already invested and encouraged him with the promise of high interest rates.
Perhaps the greatest swindle, some say, is the government’s role in the investment company. Many victims say the sight of government officials in the ads reassured them their money would be safe.
“We saw them on television,’’ said Pierre Dossa, a mechanic who lost his savings. “How could we not believe in it?’’