Pensioners fight to recover savings after scam

Victims of a suspected multibillion-euro pyramid scheme in Spain have protested in the streets and formed a pressure group to try to recover their savings.

More than 350,000 savers, overwhelmingly pensioners of modest means, invested an estimated €3.5bn (£2.4bn) in two stamp-dealing firms that were raided by police on Tuesday. The companies, Afinsa and Forum Filatelico, world leaders in stamp dealing, are under criminal investigation for suspected fraud, tax evasion, embezzlement and money laundering. Nine people have been arrested.

Police reportedly found €10m buried in two holes behind the Madrid villa of one of those detained.

Spain's Prime Minister, Jose Luis Rodriguez Zapatero, appealed for calm and said the authorities were working to defend investors' rights. But thousands of bewildered savers besieged the companies' offices throughout Spain, desperate for information and to withdraw their savings.

Hundreds gathered outside Forum Filatelico's national headquarters in Madrid and blocked traffic in protest when the company refused to let them withdraw their money. Police had to cordon off the street. Activists gathered signatures to found a pressure group. "They sold it very well," Jose Bodalo, 30, reflected bitterly. "They said the investment was guaranteed and the stamps would appreciate by 6 per cent a year. I've lost €21,000, which was all I had."

The experience of Jose Miguel Morales was typical of hundreds of thousands now in despair. "I'm a small saver, a simple working man who heard by word of mouth that Afinsa was a good company. The government says it can't do anything, and some say it's our own fault for being gullible. There was no warning, and I've lost all my savings."

Many elderly depositors put their retirement or pre-retirement pension pots in the schemes. Savers received an income but mostly left the stamps - which experts reckoned were grossly overvalued - in company vaults.

Investment in stamps is not covered by bank insurance and not guaranteed by the financial authorities.