Image: People run from tear gas
Nestor Silva  /  AP
Clients of the investment company DMG run from the tear gas fired by police as they protest in Bogota on Thursday.
updated 11/20/2008 7:55:15 PM ET 2008-11-21T00:55:15

Police tear-gassed protesters Thursday as a crackdown on illegal investment schemes exposed class divisions in Colombian society.

Rather than see President Alvaro Uribe as their savior, many investors were taking the other side.

Thousands of angry investors gathered in the capital to protest the shutdown of DMG, Colombia's largest pyramid scheme, on suspicion of laundering drug money. Several-hundred were tear-gassed as they blocked a main street in support of DMG founder David Murcia, who was deported from Panama Thursday on money laundering and bribery charges. Six other DMG officials face similar charges.

Uribe suggested that the pyramid schemes not only launder the profits of drug trafficking — they also have links to leftist guerrillas and rightwing paramilitaries.

"We could be facing a blow from the drug traffickers, from the guerillas, from the paramilitaries who try to launder money by tricking Colombians, and skillfully invoking unjust causes to create hate between Colombians," Uribe said Thursday.

'United against Uribe'
The 28-year-old Murcia has said his company represented an "economic revolution" against the country's banking system, whose high-interest loans have long frustrated Colombia's working class. His lawyer said the company did nothing illegal. Protesters on Thursday carried signs praising DMG as a "Company of the People."

"David hasn't failed us. Who failed us was the government that shut him down," said protester Milena Castillo, who mortgaged her home to invest 30 million pesos in DMG after family members had profited from the company for the last three years.

She held out hope that Murcia — not the government — would find a way to return her investment.

"David will answer us, because we're all united against Uribe," she said.

Castillo was among several thousand DMG investors gathered Thursday outside a soccer stadium in Bogota to register for a government plan to repay investors what little it can of their money using cash seized in the company's offices. The government said money would go first to those who had contributed the least, in an effort to protect the small investors who are most likely to be poor.

Murcia's company raked in tens of millions of dollars annually by offering extraordinary interest rates, as high as 300 percent returns over six months, to some 200,000 investors.

DMG had a system of prepaid credit cards that enabled many investors to double their investments many times over before police closed 59 DMG offices across Colombia this week. Venezuelan authorities shut down a DMG office in Caracas.

Investments in limbo
Uribe declared a state of emergency to crack down on the schemes, which offer spectacular returns by paying off early investors with the cash of people who invest later. Eventually, the schemes collapse when the flow of incoming money fails to keep up with the promised returns.

Another company, Proyecciones DRFE — whose intitials stood for "Fast Money, Easy Cash" — collapsed last week amid news that its owner had left the country, leaving about 600 billion pesos ($270 million) of investments in limbo.

Based in southern Colombia's Putumayo state, DRFE also had an office in Ecuador's capital, which authorities there closed.

Furious clients stormed and looted local branches in rioting last week that left 13 towns under police curfew and two men dead. Officials seized 92.4 billion pesos ($42 million) from 68 of the company's offices and arrested 52 employees, police said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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