Tajik women weep as bead scam goes to court

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The Independent Online

It sounds like a simple scam, and to the 56,000 Tajik people who bought into it, and in some cases lost everything, it must have seemed like a chance to make easy money in one of the poorest countries in the world.

Three men went on trial in Tajikistan's capital, Dushanbe, yesterday accused of tricking people into paying them thousands of dollars in exchange for glass beads and thread.

The alleged scam was a pyramid scheme that grew to involve more than $41m (£23.5m) in investments.

Investors, mostly women, were sold beads for $100 (£57) to make jewellery with the promise that they would be paid double that if they hit a deadline, with returns increasing as more people invested. But when the investors paid Jamol and Company, the alleged organisers, only a few received the beads, and the jewellery they made was almost worthless.

Outside the gates of the Supreme Court in Dushanbe, crowds of women were weeping at their losses, estimated at between $500,000 and $20m.

"We sold our house, our car and our horses. We put together $8,000 and lost it all," one woman told the BBC.

This is a huge amount of money in a country where a teacher earns between $5 and $10 a month.

Three leaders of Jamol and Company were arrested in August when authorities acted after the company stopped returning large amounts of money to investors.

Jamshed Siyaev, a director of Jamol and Company, has a criminal record, with convictions for abuse of authority dating to a period when he was aregional deputy tax inspector. Money has been returned by prosecutors to some of those involved. But in most cases compensation has been limited to about $1,000.

Similar schemes were operated in Albania and Russia in the 1990s, and the fact that so many people bought into this scheme underlines how desperately poor and cut off Tajikistan has become since the fall of Soviet Russia.

The UN, which yesterday appealed for $53.7m in humanitarian aid for Tajikistan, says that 80 per cent of the population live in poverty, and malnutrition among children has risen 30 per cent - a level on a par with Africa.

Civil war between the Moscow-backed government and the Islamic-led opposition ended in 1997 with a UN-brokered peace deal, but one tenth of the population had fled the county and 50,000 people were killed.

Combined with a constant fight against drug smugglers who enter the country from Afghanistan on their way to Russian and Western markets, Tajikistan has become one of the least stable countries in central Asia.