Meath locals lose millions in collapse of pyramid scheme

Gardaí are investigating more than 30 complaints from Co Meath residents who have lost several million euro in a pyramid scheme that collapsed late last year, it has emerged.

The scheme promised returns of up to €21.6 million over two years on an initial investment of €1,000. It involved between 800 and 1,000 investors in and around the Kells area, some of whom have lost over €100,000 each.

The Irish Times has learned gardaí investigating the collapse of the scheme have contacted the authorities in Malaysia, where it is believed to have originated. News of the international investigation comes as gardaí in Cork continue to monitor a separate pyramid scheme in which up to €20 million has been invested.

The Co Meath People in Profit Scheme, known as Pips, was run by two people originally from Meath who first encountered it in the US and decided to establish it in Kells and act as agents for a firm with offices in the US and Malaysia.

The agents took money from local people and allowed them to access a website owned by the company involved on which the growth of investments could be tracked.

One local source said he believed the money invested had simply been lodged to a bank account in Ireland and had never been received by the parent organisation.

Investors committed sums of money as loans for 180 days to those running the scheme. In return, they were "guaranteed" interest payments of 2 per cent per day.

This equates to 14,000 per cent per year if compounded over 252 trading days. A return of €21.6 million would accrue after two years on an initial investment of €1,000. The scheme continued in the second half of last year, despite a warning from the Consumers Association of Ireland urging caution.

"The people who got in early did get their investment back and in some cases made a lot of money," said one senior Garda source.

"But like all these schemes it has to dry up eventually and the people who join last lose out. It was only when it collapsed that people started to make official complaints."

The same source said many people who profited had been paid interest and profits out of the seed money committed by friends and family members they had encouraged to become involved.

A total of "several million" had been lost. The true figure would never be known because large numbers of victims were too embarrassed to come forward.

Fine Gael TD Damien English, in whose Meath constituency the scheme became popular, has raised the matter with the Minister for Justice, Michael McDowell, in a parliamentary question.

He was told that while gardaí were aware of the Pips scheme, no formal complaint had yet been made to them. Mr McDowell told him that any complaint would be investigated.

However, The Irish Times has established at least 30 people who lost money have recently complained to gardaí.

Before the collapse here of the scheme, Pips had been the subject of numerous warnings from the authorities in Australia, whose citizens have been subjected to aggressive online promotions from a Malaysia-based company.

Regulators in Alaska have also issued recent warnings.