D.M.G. Grupo Holding S.A.



D.M.G. Grupo Holding S.A.

Summary of the Case

A controversial and contentious Colombian company is D.M.G. Grupo Holding S.A. This company is well recognized by its short form DMG. D.M.G. Grupo Holding S.A was disbanded, split up, and interceded by the government of Colombia since the 18th November 2008. By the use of Ponzi scheme, the D.M.G. Grupo Holding S.A was intervened under the notion of illegal money catchment and money laundering.

The owner of the firm DMG, David Murcia was escorted by the Colombian police officers on his exile from Panama, in Bogota at the military airport, Colombia. The largest pyramid scheme of Colombia, DMG, was closed by the government due to the drug money laundering. DMG, the company of David Murcia annually collected in tens of millions of dollars by the surprising and odd rates of interest (Davis, Sullivan, & Richardson, 2011). These rates, over the six months, were as high from 150 percent to 300 percent to approximately 200,000 investors.

Discussion

Why did it happen?

In the DMG Company, there were three simple steps to the reward of ultimate shopper club. These are:

Purchase a prepaid debit card.

Use the debit card for electronics accessories and groceries items.

Get all the cash back after six months.

This type of unbelievable and incredible deal enhanced masses of blue-collar Colombians before Alvaro Uribe, the President closed the company. The properties of DMG Grupo Holding S.A. were confiscated by the Colombian authorities which the hub of Pyramid or Ponzi scheme. In the amount of USD 60 million, the properties of this company were rated. The DMG properties were situated in 10 different cities of Colombia and incorporated apartments, lands, enterprises, and houses (Alsema, 2009).

David Murcia Guzman was the founder of the company DMG Grupo Holding S.A., and applied the Ponzi scheme, which is well recognized in Colombia as “Pyramids”. In this scheme of Pyramids, a number of Colombian families invested but the company collapsed in November 2008. This was because of the reason that when the scheme companies were out of money and were unable to pay the interests to the investors and cannot afford to return their money. The most affected regions were the southwest of Colombia as the event created numerous violent reactions and protests from these poor areas by the workers and farmers.

More than 200 thousand people were affected from this scheme of DMG Grupo Holding S.A. David Murcia Guzman was caught by the Panamanian police and was sent to Bogota for facing the charges for money laundering, fraudulent activities, and illegal enrichment. Most of the companies included in this scheme were shut down by the government. The reason of this shut down was to collect the funds in order to return the money to several investors that are from poor areas so to lessen their loss.

When and where did it happen?

The divisive company D.M.G. Grupo Holding S.A was entrenched in the southern Colombia Department of Putumayo. In this region, David Murcia set in the foundation of his business captivating benefit of ...