Spanish national police have arrested 20 people involved in massive Ponzi scheme, Unetenet. The investment company has reportedly swindled 50,000 investors out of €50 million, according to major national news outlet El Pais.
Unetenet, an alleged alternative investment firm, promised affiliates annual ROIs of over 350% paid in the company’s homemade virtual currency, ‘unete.’
“I have 8,000 unetes that I cannot convert to euros,” Carmen Ramírez, a pensioner from Córdoba and a victim of the scheme, told the news service.
Alain Tamellina, a businessman who bought €18,000 worth of unete, said:
“José Manuel told us he was setting up a unete bank, and we believed him.”
In April 2014, the company stopped paying its investors, after Latvian bank Rietumu froze the account of Unetenet founder José Manuel Ramírez Marco, as part of an investigation into money laundering.
Spain’s National Court blocked his Latvian bank account containing €5 million and is further retaining US$22 million belonging to the company.
Union Business Online LTD, the company operating Unetenet, is registered in the tax haven of Saint Vincent and the Grenadines where investors’ funds would then be transferred to Malta, Romania and Latvia.
“His businesses handled up to €70 million,” Adrián Trigo, a former business partner of Ramírez, told the media outlet. Trigo further said that at one point, up to €1.5 million was being transferred into Ramírez’s accounts every day.
According to another former collaborator, Ramírez got the unete idea from Sergey Mavrodi, a Russian criminal who founded the MMM series of pyramid schemes.
In 2007, Mavrodi was found guilty in a Russian court of defrauding 10,000 investors out of 110 million rubles (US$4.3 million). The Russian court sentenced him to four and a half years in a penal colony, in addition to a 10,000 ruble (US$390) fine.
In 2011, Mavrodi launched two other pyramid schemes called MMM-2011 and MMM India. MMM-2011 was able to function openly as Ponzi schemes as financial pyramids are not illegal under Russian law.
“José Manuel was obsessed with Mavrodi,” the former collaborator said, adding that his former employer was constantly trying to work out how to set up a bank, an alternative financial system, and even a city to be called Unetecity.
The Ponzi scheme extended to a dozen countries, according to experts. So far, more than 100 of the 6,000 Spanish victims filed the class-action lawsuit.
Ramírez’ name is linked to System World Investment, a firm operating under the brand name Dextraplus. Spain’s Comisión Nacional del Mercado de Valores, a governmental agency responsible for the financial regulation of the securities markets in the country, issued a public warning on System World Investment in 2009, calling the company a “financial scam.”
Ramírez also worked for Finanzas Forex, a Panama company that operated a pyramid scheme. Founder Germán Cardona was sent to prison in March 2011 for scamming 100,000 investors with total losses amounting about €300 million.
Police are still searching for Ramírez and his girlfriend, Pilar Otera. Both are located in a European country and could be arrested in the coming days, the police said on Wednesday.
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