Did Internal Ponzi Cause Bramer Bank Of Mauritius To Crumble?

EDITOR’S NOTE: On May 10, 2012, on the news site of Zeek Rewards, the Rex Venture Group-operated “program” based in Lexington, N.C., announced it was moving part of its customer-service operation to Mauritius. Mauritius is an Indian Ocean island nation with a population of about 1.3 million.

Zeek did not identify the Mauritius outsourcing company. Nor did it say who had recommended it or explain precisely why it had chosen Mauritius.

“First and foremost, we are over-doubling our current affiliate services staff both in-house and in Atlanta and are bringing on an overseas branch in Mauritius to manage 24/7 inquires,” Zeek said. “Since we have affiliates in so many countries and support tickets come in around the clock, we will have operators training on the opposite side of the planet shortly, which is a very exciting development.”

It is unclear if Zeek ever sent money to an outsourcing firm in Mauritius. Although it is known that Zeek used offshore payment vendors,  nothing in the public record suggests these were based in Mauritius.

On Aug. 17, 2012, a little more than three months after Zeek announced its Mauritius support operation, the SEC described Zeek as a combined Ponzi- and pyramid scheme that had gathered hundreds of millions of dollars.

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UPDATED 9:15 A.M. APRIL 4 EDT U.S.A. Did a $693 million internal Ponzi scheme at Bramer Bank in the Indian Ocean island nation of Mauritius cause the bank to crumble?

Prime Minister Anerood Jugnauth used the term “Ponzi” when describing the bank, Reuters reported today. (In a 4:44 4sWeb Tv video on YouTube dated today, the prime minister can be heard saying “Ponzi scheme” at about the 1:22 mark.)

On April 2, the Bank of Mauritius, the central bank of the nation of about 1.3 million people, revoked Bramer’s banking license and appointed a receiver.

This was followed today by the suspension of Bramer’s securities on the Stock Exchange of Mauritius.

Troubles at Bramer had an immediate ripple effect. The Financial Services Commission of Mauritius appointed a conservator over BAI Co (Mtius) Ltd., an insurance company operating under the same umbrella company as the bank. “BAI” stands for British American Investment.

Ponzi-scheme cases often have confusing — if not wild — backstories and sidebars.

The video below was published under a “BramerBank” account on YouTube on Nov. 17, 2014. It depicts Bramer in a highly favorable light, reporting on an award the bank received from Global Finance Magazine, an American publication. The video appears to have been produced by MBC, the public-broadcasting company of Mauritius. The Ponzi allegations would surface only months later.

A Facebook site of Bramer appears now to be inaccessible or to have gone missing. Google cache, however, shows a March 31 post attributed to “Bramer Banking Corporation.” The post claims Bramer had been the subject of criminally “malicious comments” on Facebook and that the bank had filed a report with police.

The screen shot below shows the cached post:

Just two days before regulators shut it down, Bramer Bank claimed on Facebook that it was being smeared.

Authorities in Mauritius appear to have moved aggressively against the firm within the next 48 hours.

The central bank said it had conducted an on-site examination of Bramer “from 22 January to 20 February 2015.

“On 27 February 2015, the Bank conveyed to [Bramer] a number of significant deficiencies (going back to 2012) that had been noted during the examination,” the central bank continued.

In revoking the license, the central bank said it “considers that [Bramer] has been carrying on business in a manner which is contrary or detrimental to the interest of its depositors and the public. The [central] Bank also considers that the conditions prevailing at [Bramer] pose serious systemic risks to the domestic financial system.”