Authorities in the Russian Republic of Kabardino-Balkaria have reportedly arrested six popular local bloggers accused of running a $3.5 million pyramid scheme.
The authorities say the suspects scammed over 600 people from Kabardino-Balkaria and beyond.
According to the local Interior Ministry, the suspects promised investors returns of up to 100% within a month. They allege that the defendants did not conduct any entrepreneurial activities, with returns instead paid from funds received from new clients.
The authorities have not released information on the suspects’ identity other than that they are local residents aged from 21 to 34. However, a source in local law enforcement told OC Media that all six were popular bloggers, including Bella Bifova, Angelica Bikaldieva, as well as three others with the surnames Pshikhacheva, Belimgotova, and Nagoeva.
Criminal cases for fraud and illegal fundraising have been launched, with the suspects facing up to 10 years in prison if convicted. They have been remanded into two months of pretrial detention.
Organisers remain at large
The scheme was reportedly launched in July 2020 on an Instagram profile with the handle @smart__buyers and titled INVESTMENTS | DEPOSITS. On the account, a woman identifying herself as ‘Elina’ urged others to ‘invest’ in the purchase of cosmetic devices and jewellery.
There was no written agreement with the depositors because everything was built on ‘the trust and desire of depositors of easy money’, one victim of the scheme told OC Media.
According to the interior ministry, residents of Moscow, Daghestan, Chechnya, North Ossetia, Ingushetia and other regions of Russia also fell victim to the scheme.
One woman from the Republic of Daghestan told OC Media she was convinced to a friend, who later hand over money by a friend who became a manager of smart__buyers.
‘In October I invested ₽100,000 [$1,360], and in early December I received my payment. Then I invested ₽50,000 and another ₽100,000. As a result, I have been left with nothing,’ the woman said.
A source in the Interior Ministry of Kabardino-Balkaria said that bank cards, telephones, and other equipment had been seized from the detainees and that they were working to discover the identity of the organisers and anyone else involved.
‘We understand that the detainees are not the main organisers and acted at the direction of others’, the source said. ‘Work is now underway to calculate other participants. In fact, there may be many more victims than we imagine.’
Meanwhile, investors who lost money have continued to express hope that they may recover their money. Posts continue to appear on Instagram about the progress of the investigation and the fraudulent scheme with dozens of accounts emerging dedicated to exposing smart__buyers.