Recession-hit Argentina gripped by ‘Ponzidemia’

BUENOS AIRES (AFP) — A quiet Argentine town best known for its oranges has become the symbol of a Ponzi scheme plague sweeping the crisis-hit nation that has cost thousands of people their savings.

Nearly 30 percent of the population of San Pedro, a town of 70,000 people situated about 170 kilometers north of Buenos Aires, fell for an investment app peddled by two actors posing as businessmen that promised up to 2 percent daily returns paid in cryptocurrency.

“I trusted it, as did some in my family,” Carlos Rodriguez, a 66-year-resident, told the Cadena 3 radio station, adding that the RainbowEx app showed him earning $80 to $100 a day, nearly doubling his income.

But the dream of easy money in a country battling a severe recession and three-digit inflation soon turned to dust.

Rodriguez lost nearly all his savings.

He is one of between 15,000 and 20,000 people in San Pedro who invested in the platform, the town’s mayor Cecilio Salazar told the Radio 10 station.

Thousands of victims

“We’re looking at a $49 million scam,” lawyer Adolfo Suarez Erdaire, who represents around a hundred alleged victims, told Agence France-Presse, adding that he had “calls coming in from all over the country.”

Two Argentine nationals have been arrested in connection with the case.

A Ponzi scheme is a fraudulent scheme where new investors’ money is used to pay off old investors until the flow of new money dries up and the enterprise collapses.

Similar suspected scams were also reported recently in Chubut and San Juan provinces in the south, Santa Fe province in the center and Cordoba in the north, all involving another platform, Peak Capital, which closed on 18 October.

“There are thousands of victims,” the Chubut prosecutor’s office said, adding that the amounts swindled ran into the millions of dollars.