The Police Service's Commercial Crimes unit this week issued a warning against pyramid investment schemes. The warning came after The Royal Gazette looked in to complaints about one scheme currently being marketed in Bermuda under the auspices of "The Nkenge International Foundation''.

"I don't know what's going on. I've put money into it and persuaded five other people to put money into it, and now everything I was told about it doesn't seem to be true,'' said the woman who first contacted The Royal Gazette about the Nkenge scheme.

"I suspect I've been ripped off. I feel like I've been used and taken advantage of.

"I don't want you to publish my name,'' she said. Almost everyone The Royal Gazette has spoken to about Nkenge has made similar requests.

It is understood that at least one person has been making presentations to groups of potential investors around the Island, outlining opportunities for returns of more than $100,000 from an initial investment of just $10.

And this person has signed up at least one group of 12 hotel, catering and construction workers who joined the scheme in hopes of getting a $20,000 return within a month.

Nkenge International sales manuals are also being handed out at these meetings.

The manuals contain inspirational sales pitches, an explanation of how pyramid investments are supposed to work, and instructions on how to most effectively draw others into the scheme.

The manual's text is peppered with quotes from Harvard Business School publications, and historical, business and political leaders such as motivational speaker Dale Carnegie and 19th Century British Prime Minister Benjamin Disraeli.

However the Nkenge manual does not publish any information about the foundation itself, there is no information about the company that publishes the document or sells the investment scheme sales techniques.

According to the manual, enquiries should be directed, in writing, to a post office box in Warwick.

Police spokesperson Evelyn James Barnett said the pyramid scheme, while not against the law, is unlikely to make anyone rich.

"It is not illegal if people part with their money willingly, but generally, investors tend not to make anything out of it, so it could be considered a type of fraud,'' she said.

However, some Nkenge investors say they are happy with the programme.

"I've been getting returns, I'm happy with things,'' said one investor. "I know of others who have done OK out of it too, and I would encourage those who are dissatisfied, to be patient.'' Last week The Royal Gazette sat in on a meeting where a Nkenge pitch man explained the scheme to a group of investors and potential investors.

According to the salesman, a person joining the Nkenge programme pays ten dollars to have their name and address put at the bottom of a list of investors.

The ten dollar investment is apparently sent to the person who is at the top of the list.

The new investor is then told to sign on two more people who also send their $10 to the person on the top of the list.

These two new people then recruit two more people, each of whom send their money to the person on the top of the list.

"That way, the number of people who invest is doubled with each generation,'' the salesman explained.

"One person brings two people in within 48 hours, those two people bring in four people within two days, and so on for 11 generations.

"At that point there will be 2,048 people in the scheme, and they will have sent $10 to the person on the top of the list, meaning the person at the top has put in $10 and received 20,480 within 22 days,'' the salesman said.

Warning from Police After the person at the top has received the money from 11 generations of investors, they are struck off the list, the next one on the list moves into the number one slot, and every one else on the list moves up a slot as well.

According to the salesman, anyone who has invested can keep track of their money -- and their place on the list -- by sending away for a newsletter from the Nkenge foundation.

The first newsletter is free, subsequent newsletters from Nkenge, who claim to keep track of all the lists on investors within the scheme, have to be purchased.

According to a Nkenge representative, proceeds from the sale of the newsletter and the fees they charge to track people's investment line, are the Foundation's only source of income.

"This is a voluntary scheme in which those involved sell the Nkenge package to family and friends. The system works well, but only if those involved keep track of their line and make sure it keeps moving,'' a Nkenge representative said.

"It's true that a line can easily go stagnant, and if this happens, investors will not get much, if anything, from their investment, but we tell people this when they get involved and the manual outlines this as well.

"If investors keep track of their line and work to get things moving when they see things slowing down, it will work, they will begin to make money.'' Since making inquiries into the Nkenge Foundation, The Royal Gazette has received a number of calls from satisfied Nkenge investors. "I've been in the programme less than 22 days and already I'm receiving money,'' one woman said.

"You've got to keep on top of your lines though,'' she added, "if you don't, your lines will go dead and you won't get anything.'' Another recent investor in the scheme had a more philosophical outlook. "I spend over $30 a week on cigarettes, so if I get something back from a one-time $10 outlay, I'm happy. I'm a gambler anyway, so a $10 bet? It's all right if I get something, and if I don't, what have I lost?'' CRIME CRM