How it works
A Ponzi scheme promises high, regular returns and pays them out of new members' money instead of real investment income. Mobile money lets these schemes recruit and collect at scale: members join through messaging groups and social media, deposit to a wallet or merchant till, and receive returns the same way.
Variants include investment clubs, peer-to-peer donation schemes, forex or crypto trading pools, and savings groups taken over by an organizer. Early payouts arrive on time, and referral bonuses reward members for bringing in others, which drives fast growth.
Around the collecting accounts, many small deposits arrive from a growing set of senders while larger payouts go back to earlier senders, and the organizer moves a share onward. The pattern is visible before the collapse, because payouts depend on new inflows and withdrawals eventually outrun deposits. The collecting accounts are often registered to individuals but behave like businesses.
Red flags
- Personal wallets or accounts receiving many small deposits from a fast-growing number of unrelated senders
- Regular payouts back to earlier senders at amounts above what they deposited
- Payment references mentioning returns, packages, levels, investment or referral bonuses
- Collecting accounts that move funds to the organizer's accounts or cash out in bulk
- Inflows that slow while withdrawal requests and customer complaints rise
Signals the engine evaluates
- Growth in distinct senders per collecting account across successive windows
- Ratio of payouts to new deposits, and whether payouts go to accounts that deposited earlier
- Fan-in and fan-out structure around the collecting accounts, including second-level recruiters
- Personal accounts whose transaction profile resembles a business, against the customer's declared occupation
Investigation and response
- 01Map the network around the collecting accounts to identify the organizer, the recruiters and the scale of participation.
- 02Review KYC and declared purpose for the collecting accounts, and restrict them where policy and law allow.
- 03Engage the financial or securities regulator, since unregistered deposit-taking and investment schemes usually fall within its remit.
- 04File suspicious transaction reports with the financial intelligence unit, and preserve the records needed for any later victim recovery.