Investors in an apparent Phnom Penh-based pyramid scheme have been left in the lurch after the scheme’s entire management team fled the country, with hundreds of thousands of their investors’ dollars in tow.
ProfitPlus, a firm headed by Ukrainian national Mykola Papenin, set up in Cambodia in the middle of 2015 and quickly began advertising 25 per cent monthly dividends to budding investors.
The firm’s vast profits were supposedly reaped through investments in foreign gambling operations.
But on December 18, Papenin and his entire team of about six or seven people, composed of nationals from former Soviet Union countries such as Kazakhstan, Russia and Ukraine, disappeared.
“I think they scammed us for sure,” said one former Cambodian employee, who invested $1,000 in ProfitPlus and oversaw contracts the firm signed with clients.
The employee is one of four investors who filed a fraud complaint to the Phnom Penh Municipal Court on January 5 accusing Papenin of stealing $23,000 of their money.
The money is only a small slice of the total pie, according to the ex-employee, who declined to be named.
“I don’t know exactly, but probably at least $200,000 to $300,000,” he said.
The company had nearly 100 investors, the employee was told, and operated in Thailand as well.
Unknown to its clients, however, ProfitPlus was being investigated by authorities prior to its management’s escape.
In an email to the Post, National Bank of Cambodia director general Chea Serey said the Securities and Exchange Commission of Cambodia ordered a suspension of ProfitPlus’ activities at the end of November because it needed to obtain an appropriate license.
She said the NBC began to monitor the company in case it began taking deposits. The NBC visited its office in December, but it was already closed save for a few staff, who promised the license was being sought.
“We haven’t heard from them since,” Serey wrote. It was shortly after the NBC’s visit that Papenin and his crew fled the country, the employee said. Only four investors signed on to the complaint because the rest were convinced their money was gone forever.
Joseph Lovell, managing partner at BNG legal, said “exotic” financial products are still new to many Cambodians, and to the authorities, whose actual enforcement lacked “sophistication” at times.
The ex-employee said his case was hopeless, but still wants some form of justice.
“Just put [Papenin] on the blacklist to make sure he does not come to Cambodia again.”
Municipal court officials overseeing the case could not be reached yesterday.
Additional reporting by Chhay Channyda