A Ponzi scheme or Ponzi game is a form of fraud which lures investors and pays profits to earlier investors by using funds obtained from more recent investors. The victims are led to believe that the profits are coming from product sales or other means, and they remain unaware that other investors are the source of profits. A Ponzi scheme is able to maintain the illusion of sustainable business as long as there continue to be new investors willing to contribute new funds, and as long as most of the investors do not demand full repayment and are willing to believe in the non-existent assets that they are purported to own

Menzgold to date has crucially not told depositors why Menzgold cannot pay depositors back all principal sums invested even though S.E.C has not prevented Menzgold from paying back the depositors their principal sums invested and these principle sums were supposed to have been earmarked and left untouched whilst accruing dividends. Furthermore, each investor signed a commercial legally binding agreement that they could get their monies back at any time during the agreement and potentially forfeit 25% for withdrawing their principles earlier than anticipated.

NAM1 is a dreamer with a vision

NAM1 has to be commended though for being underestimated most his life; constantly rejected from university entry in Ghana; a very humble background with little access to real capital and opportunity except when he was inspired to create the pyramid called Menzgold which ironically had a pyramid as its business symbol for all to see in plain sight. He wanted to taste life on the other side of poverty.

Perhaps he is, in fact, a testimony that big ideas and big dreams can come true with perseverance and dedication though sometimes that skill of strategy and ingenuity may be better placed in a model that doesn’t cost a large portion of the population everything.

On NAM1’s twitter account he identifies himself as someone who inspires to offer a Welfare State-perhaps that was his end goal. Earn enough money to become President of Ghana and then look after the state with a Welfare model. However, pipe dreams built off the labour and money of others did not fruition to that end vision since he created enough enemies in the banking sector by luring the customers of most banks in Ghana to Menzgold and perhaps creating some envy amongst very, very old politicians who did not visualize as much as NAM1 even in their later years and secretly wanted to be younger and richer and fly on that jet

NAM1, therefore, did not stand a chance against the tide of jealousy and exposure even if his end goal may have been to carry on with this pyramid for at least 10 years before he launched as a 3rd party presidential candidate for the highest office of the land.

Menzgold bears the hallmarks of a Ponzi scheme for the following reasons

1. Most Menzgold customers reinvested their dividends as well as original principals back into Menzgold

Although the Ghanaian public offers very little sympathy to ‘greedy people’ who got 10% per month and did not share those profits with government (yet now want government to intervene); the truth is Menzgold as a business model offered its customers reinvestment schemes towards the end of each investment and most of the investors reinvested everything back into the company having received such good returns. The ruse, therefore, was to make the investors come back and to gain back as much money for the company through re-investment whilst inspiring confidence in customers who went out into the world and marketed the product for Menzgold without being asked to which is the best form of advertising.

2. Menzgold's business model should not be dependent on taking in new deposits

Menzgold took in millions of dollars from large-scale depositors particularly in the last year of operation therefore even if they are now not in operation, they achieved the aim of luring bigger depositors without having to honour the 12-month agreements particularly with these large scale depositors. Menzgold are further claiming (to the public) that the Security and Exchange Commission (S.E.C) shut them down when in fact the S.E.C merely said that Menzgold cannot take in any new depositors and they can pay old depositors.

The true nature of Menzgold’s operation may well have been exposed based on S.E.C’s action of finally telling Menzgold not to take in new depositors because why should such a 'buoyant' business that can offer returns of 10-12% a month not be able to release principle sums invested or access those dividend returns  if no new depositors come in? Except of course if the whole business model was dependant on new deposits in order to pay older depositors which if true (and only if true) would make this a Ponzi scheme.

Arguably, therefore, Menzgold had no alleged magic formulae that can offer better monthly rates of returns as compared to world market returns and local market returns for gold.

3.Luring of bigger depositors

Menzgold for over 5 years ran a sophisticated operation that by all accounts anticipated the collapse in operation and was simply staying open long enough as a business to get deposits in the region of 1 million dollars to upwards of 6 million dollars per transaction. That could never have happened in the first 3 years as they did not have enough people recommending them etc. but after the third year the public accolade and word of mouth referral system built on trust (since many investors had been paid for the first 3 years in particular) brought in bigger investments. That is why it was so important for them to associate themselves with top celebrities, politicians and people of influence in order to attract more legitimacy and customers for as long as they could run.

4. Nature of sophisticated white-collar crimes



Most scam artists operate with the end goal of taking in large sums of money at the end of the operation even if the smaller deposits lure these bigger investments.

If a company were to have a sham operation and attempt to evade licensing by the S.E.C they would do the following:- 

(1) Change strategy: Menzgold later in their business operations ensured that 95% of all monies were paid by clients to their subsidiary Brew Marketing Consult Ltd and 5% as commission to Menzgold

(2) The gold as defined in the Agreements is a term used in general gold scams for 'gold'

(3) The fact that Menzgold opened up as a bank twice before changing strategy and entering the gold deposit business only to be licensed for a short period

(4) The fact that they are trying to appear as if they do not now need licensing because they are now not allegedly taking in deposits since they are funnelling those deposits to Brew Marketing Consult 

Government agencies that look into financial and international elements of a crime have not arrested ANYONE in Menzgold; prevented travel; notified foreign governments; earmarked bank accounts and responded in the same way as they did in the GFA case which they said was ‘public interest’ 

Standard procedure is to question, arrest, earmark assets before disposition, earmark accounts, prevent travel, notify foreign countries so that they can do a search of their banking databases of those in question and preserve as much as possible before dissipation of assets. Our government has shown us for other high -profile cases in 2018 that they are capable of doing this even before a C.I.D file is open. Why this was not done in a case involving 1.8 million victims with upwards of 200 million dollars investments in an unregulated company that should have been shut down before bigger depositors put money in, is a mystery that may well be revealed in due course.

Conclusion

A company that takes in deposits and changes strategies in how they take in deposits is clearly regulated by the laws of Ghana. Sadly, with the closing down of Zylofon and the leases of Menzgold’s Accra offices due to run out in the coming months; the writing may well be on the wall with no arrests; prevention of travel; seizure of assets or notification to other countries of the activities of this dynamic company and its officers. This is despite key government bodies filing formal criminal complaints together with relevant documents and attachments in August 2018 and C.I.D and the Attorney General’s department receiving numerous complaints yet nothing has been done to elevate the criminal investigation of an operation that cost 1.8 million people most of their life savings in the combined region of 200 million dollars in an unregulated company.

Freedom it seems has a price that is obtainable even for a CEO whose application was constantly rejected for undergraduate entry in Ghana; a visionary with a humble dream that started in Kasoa and ended on a private jet built on the backs of the Ghanaian populace. Perhaps he never needed university; his university was the school of life.

Nationalism and pride, however, has no price and the nations that achieve these qualities by demonstrating action and compassion for the multitudes scammed to reinvest in a product that never existed and left penniless and devasted; those nations will become the dream they aspire to be for global impact. Perhaps that’s why we as a nation aspire but never attain international standard if we do not consider the masses in all major circumstances.