Tajik authorities last week arrested the owner of a bead-stringing company on suspicion of tax evasion, money laundering, and other financial crimes. Thousands of Tajik citizens have reportedly squandered their life savings on the company, which prosecutors accuse of operating as a front for a simple pyramid scheme.
Prague, 19 August 2003 (RFE/RL) -- Police officials in Dushanbe yesterday dispersed demonstrators attempting to gather in the city center. The protesters, mainly women, were demanding the release from prison of a man, Jamshed Ziyaev, who authorities say robbed them of tens of thousands of dollars in a pyramid scheme.
Rallies had already been held on 15-16 August after the Prosecutor-General's Office announced that criminal proceedings against Ziyaev had been initiated. One Tajik protester said the authorities should release Ziyaev -- or at least guarantee the return of the investors' money: "If the government wants justice, it must release Ziyaev, because we want our money and we want Ziyaev to invest our money in his business. For eight years I've been living in a rented house. Getting money from this company was my last chance to buy my own house."
The firm, Jamal and Company, operated a bead-stringing business for six months before being closed down by the authorities on suspicion of financial wrongdoing. It offered investors a simple deal: buy beads and string direct from the company, string the beads, and sell them back at a handsome profit.
Ziyaev appeared to have no trouble finding investors. When he was arrested on charges of money laundering and tax evasion, law enforcement officials confiscated a total of nearly 1 million somoni (about $300,000) from Jamal offices around the country.
"Our investigation results showed that this company failed to pay taxes of 7,123 somoni [about $2,400]," Gayrat Sharifov, an investigator with the Tax Ministry, says.
First Deputy Prosecutor-General Azizmat Imomov told RFE/RL that the Prosecutor-General's Office has demanded that the deputy director of Jamal and Company, Shamsiya Navruzova -- who was not detained -- begin returning minimal sums to the company's investors. But Navruzova said she was unable to comply.
"Without the approval of the company's head, I cannot take money from the bank. And some money has [already] been taken out, by the prosecutor general," Navruzova says.
Imomov said the issue of large-scale compensation will be considered by a special investigative group comprising officials from the Prosecutor-General's Office, the Interior Ministry, and the Security Ministry.
It is still unknown how many thousands of dollars may have been invested in the scheme, but police claim more than 6,000 people bought into the bead-stringing business. Some observers even speculate that Jamal and Company had grown so large it was partly responsible for recent fluctuations on the currency market. Ever since authorities prohibited the firm from making foreign-currency payments, the dollar's value against the somoni has dropped.
Prior to the closure of the firm, law enforcement agencies had already warned people not to invest in the company. Marat Mamadshoev, the editor of the Tajik daily newspaper "Asia Plus," said Jamal and Company had all the signs of a typical pyramid scheme.
"I think the activity of this company is typical of a financial pyramid scheme. They tried to take a lot of money from people and then escape," Mamadshoev said.
A similar scheme appeared in Kyrgyzstan earlier this year. The World Interprise Company offered Kyrgyz citizens the opportunity to buy beads and thread to make costume jewelry they could then sell back at a 15 percent profit. The first wave of investors saw a return on their money. But when the company was closed down in April, hundreds of people found themselves robbed of their savings with nothing to show for it but a pile of valueless beads.
(RFE/RL's Tajik Service contributed to this report.)
Prague, 19 August 2003 (RFE/RL) -- Police officials in Dushanbe yesterday dispersed demonstrators attempting to gather in the city center. The protesters, mainly women, were demanding the release from prison of a man, Jamshed Ziyaev, who authorities say robbed them of tens of thousands of dollars in a pyramid scheme.
Rallies had already been held on 15-16 August after the Prosecutor-General's Office announced that criminal proceedings against Ziyaev had been initiated. One Tajik protester said the authorities should release Ziyaev -- or at least guarantee the return of the investors' money: "If the government wants justice, it must release Ziyaev, because we want our money and we want Ziyaev to invest our money in his business. For eight years I've been living in a rented house. Getting money from this company was my last chance to buy my own house."
The firm, Jamal and Company, operated a bead-stringing business for six months before being closed down by the authorities on suspicion of financial wrongdoing. It offered investors a simple deal: buy beads and string direct from the company, string the beads, and sell them back at a handsome profit.
Ziyaev appeared to have no trouble finding investors. When he was arrested on charges of money laundering and tax evasion, law enforcement officials confiscated a total of nearly 1 million somoni (about $300,000) from Jamal offices around the country.
"Our investigation results showed that this company failed to pay taxes of 7,123 somoni [about $2,400]," Gayrat Sharifov, an investigator with the Tax Ministry, says.
First Deputy Prosecutor-General Azizmat Imomov told RFE/RL that the Prosecutor-General's Office has demanded that the deputy director of Jamal and Company, Shamsiya Navruzova -- who was not detained -- begin returning minimal sums to the company's investors. But Navruzova said she was unable to comply.
"Without the approval of the company's head, I cannot take money from the bank. And some money has [already] been taken out, by the prosecutor general," Navruzova says.
Imomov said the issue of large-scale compensation will be considered by a special investigative group comprising officials from the Prosecutor-General's Office, the Interior Ministry, and the Security Ministry.
It is still unknown how many thousands of dollars may have been invested in the scheme, but police claim more than 6,000 people bought into the bead-stringing business. Some observers even speculate that Jamal and Company had grown so large it was partly responsible for recent fluctuations on the currency market. Ever since authorities prohibited the firm from making foreign-currency payments, the dollar's value against the somoni has dropped.
Prior to the closure of the firm, law enforcement agencies had already warned people not to invest in the company. Marat Mamadshoev, the editor of the Tajik daily newspaper "Asia Plus," said Jamal and Company had all the signs of a typical pyramid scheme.
"I think the activity of this company is typical of a financial pyramid scheme. They tried to take a lot of money from people and then escape," Mamadshoev said.
A similar scheme appeared in Kyrgyzstan earlier this year. The World Interprise Company offered Kyrgyz citizens the opportunity to buy beads and thread to make costume jewelry they could then sell back at a 15 percent profit. The first wave of investors saw a return on their money. But when the company was closed down in April, hundreds of people found themselves robbed of their savings with nothing to show for it but a pile of valueless beads.
(RFE/RL's Tajik Service contributed to this report.)
