UK Gurkhas fall prey to £50 million ‘Ponzi scheme’

Hundreds of Gurkhas and Nepalese community members in the UK may have lost their life savings as they are believed to have fallen prey to a suspected £50 million Ponzi scheme, the police said on Thursday.

Some of the victims have approached the City of London Police. However, others have not contacted the police which on Thursday asked others to come forward and report the case.

The police have arrested 14 people as part of the suspected “Ponzi scheme” linked with Capital World Markets (CWM) based in the financial district of London.

They believe about 450 Gurkhas, including retired and serving soldiers, and Nepalese community members may have invested in the “Ponzi scheme” which dupes people by distributing returns to investors from the money paid by other investors.

The victims are thought to have lost money after investing more than £2 million with CWM, a fund manager suspected of running a fraudulent foreign exchange investment scheme promising customers a return of five per cent per month.

“We are very keen to hear from members of the Ghurkha and Nepalese community who have put money into CWM’s managed fund. So far, only five victims from this community have come forward, but we think more than 200 may have invested,” London police detective chief inspector David Manley said.

“Financially, they are not the biggest investors but in terms of harm they are among the biggest victims. This happened around the time of the Nepal earthquake and lots of Gurkhas send money home, so this scam will have really hit them hard.”

“We are not sure why there is a reluctance to come forward, whether it is a pride issue or whether they do not want to believe that they are not going to see their money again. We want to reassure them that they have done nothing wrong and will be treated sensitively. Our investigations are ongoing and this could be the only opportunity they have to get some justice,” Mr Manley said.

Offering a return of five per cent a month, hundreds were lured into investing in the scheme, with an estimated £50 million being poured in. More than half of those who fell prey to the fraud are believed to be Gurkhas.

Gary Ghale from the Gurkha Welfare Trust believes the Nepalese community in the UK may have been encouraged to invest in the scheme by unsuspecting family and friends.

“We would advise anyone who believes they have fallen victim to this suspected fraud to contact the City of London Police immediately,” he said.