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Colombia set to aid scam victims Colombia bids to halt scam crisis
(about 6 hours later)
The government of Colombia is drawing up emergency measures to try to help hundreds of people who lost money in disreputable financial schemes. The government of Colombia has announced emergency decrees in response to widespread unrest after the collapse of pyramid money schemes last week.
President Alvaro Uribe held meetings over the weekend to discuss the crisis and will make an announcement later on Monday, a spokesman said. A state of "social emergency" has been declared under which the authorities can seize money from firms accused of illicit activities.
Thousands of people took to the streets in several cities last week when the finance firms closed without notice.Thousands of people took to the streets in several cities last week when the finance firms closed without notice.
The companies had promised investors huge returns of up to 150% per month.The companies had promised investors huge returns of up to 150% per month.
At the weekend, President Uribe vowed to help poor investors to recover their money after many of them lost their life savings. At the weekend, President Uribe had vowed to help poor investors to recover their money after many of them lost their life savings.
Mr Uribe said that police had already seized some $40 million (£27m) held by pyramid schemes and that some of the finance companies had begun returning money to investors.Mr Uribe said that police had already seized some $40 million (£27m) held by pyramid schemes and that some of the finance companies had begun returning money to investors.
The president said his government was preparing emergency legislation which would increase the prison term for people running fraudulent investment schemes. The authorities were criticised for not acting sooner and Mr Uribe has said he himself should have examined the issue more closely.
His government was also looking at ways of easing the process of returning money to depositors, he said. The emergency decrees published on Monday set out new procedures to intervene in financial firms operating without authority and seize their funds.
The authorities have been criticised for not acting sooner and Mr Uribe has said he himself should have examined the issue more closely. The decrees also aim to ease the return of funds to depositors.
So far some 240 pyramid schemes have been detected across Colombia, which between them collected well over $200 million, says the BBC's Jeremy McDermott in Medellin. Mayors and local police are given authority to take preventive steps, such as closing suspect businesses, while the prison terms for running pyramid schemes are increased to between 10 and 20 years.
So far some 240 pyramid schemes have been discovered operating across Colombia, which between them collected well over $200 million, says the BBC's Jeremy McDermott in Medellin.
Most of that money appears to have already disappeared along with the founders of the schemes.Most of that money appears to have already disappeared along with the founders of the schemes.
Angry investors took to the streets last week when news spread that the finance firms, among them one known as DRFE (Quick, Easy, Effective Money), had closed suddenly.Angry investors took to the streets last week when news spread that the finance firms, among them one known as DRFE (Quick, Easy, Effective Money), had closed suddenly.
The protests turned at times violent and curfews were declared in several cities.