Logo of Phnom Penh Post newspaper Phnom Penh Post - Pyramid scheme investors fleeced



Pyramid scheme investors fleeced

Pyramid scheme investors fleeced

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

MOST VIEWED

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Phnom Penh curfew starts today

    A two-week curfew from 8pm to 5am starts today in Phnom Penh, a day after a sub-decree detailing administrative measures to contain Covid-19 was issued by Prime Minister Hun Sen. “Travelling in Phnom Penh is temporally banned between 8pm and 5am,” said Phnom Penh governor

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Cambodia gears up for muted New Year festival

    The recent curfew and restrictions imposed in the capital and other Covid-19 hotspots were intended to break the chain of transmission, Ministry of Health spokeswoman Or Vandine said as municipal and provincial authorities issued new directives banning certain activities during the upcoming Khmer New Year

  • Culture ministry: Take Tuol Sleng photos down, or else

    The Ministry of Culture and Fine Arts has told Irish photographer Matt Loughrey to take down the photos of Khmer Rouge victims at Tuol Sleng Genocidal Museum which he allegedly colourised and altered to show them smiling. The ministry said Loughrey's work is unacceptable, affecting

  • Covid-19 vaccination now obligatory

    Prime Minister Hun Sen on April 11 issued a sub-decree making Covid-19 vaccination compulsory for individuals unless they have a medical certificate proving they have pre-existing health conditions that prevent them from doing so. «This applies to all members of the armed forces and civil servants