Malaga man arrested for alleged involvement in 300-million-euro pyramid scheme scam

National Police officers arrested a 47-year-old resident of Vélez-Málaga on the Costa del Sol on Tuesday 29 July in Logroño (La Rioja) who is being investigated for being the alleged ringleader of a large-scale pyramid scheme, with more than 200 victims and 300 million euros stolen from victims.

The man, who worked for an insurance and investment company and was nicknamed Paco 'El bueno' (the good), has allegedly spent 15 years promising significant fund revaluations and property investments of up to 300% to his victims. His wife, who is Ukrainian, who also works as an insurance and investment agent for another firm in the sector, has also been arrested in the operation.

The arrest took place in a residential area of Logroño, after a two-week search when the first complaints began to be lodged at the National Police station in Vélez-Málaga (Malaga province).

There are also people affected in other Spanish provinces including Cadiz, Jaen, Granada and Huesca, as SUR has learnt. All of them are linked to Vélez-Málaga, either because they come on holiday or because of family ties.

Paco would always ask for the money in cash or by transfer and promised very high revaluations, above those offered by the banks, as the investigation has confirmed.

He would only give paper receipts of the investments deposited in cash, with bags of up to 200,000 euros given to him by clients. These were not only investments in funds, but also in property and other assets, as SUR has learnt. For example, one of those affected had won seven million euros in a lottery, took the money out of the bank and left it with him, confidently. The meetings took place in a family bar in the centre of Vélez-Málaga or in his brother-in-law's office.

Up until recently the insurance and investment company still carried a photograph of Paco, describing him as "one of the company's most efficient" employees. The photo has since been removed. In fact, although some of the documents issued by the detainee were a simple sheet of paper with his details, those of other victims had the company's letterhead, as SUR has been able to confirm.

The suspect had had an office in the centre of Vélez-Málaga for more than fifteen years and from there he managed the investments of all his clients. The profiles of those affected are very varied, ranging from pensioners to young people, police officers, lawyers, students and self-employed professionals, as detailed to SUR by lawyer Marta Fuentes, who is the legal representative of more than fifty of the alleged victims.

As well as Paco and his wife, his brother-in-law, who is a tax advisor and his sister have also been arrested, according to the lawyer, who is preparing a complaint against all of them to be filed in court. According to Fuentes, the victims believed that the investments were made through the insurance companies for which the couple worked, so they had full confidence in the professionals.

"And he would show them a computer screen where the increases in money appeared, from one year to the next, from 200,000 to 225,000 and the next year it was supposedly 243,000 euros," said Fuentes. The National Police investigators are trying to find out the whereabouts of the money, since, allegedly, only a small part of the amounts they received in cash were transferred to the portfolios of the insurance and investment companies they worked for.

The insurance and investment firm for which Paco 'El Bueno' used to work has had staff on site in Vélez-Málaga for a few days to deal with claims, with an advisor and a lawyer. The detainee, who is being transferred from La Rioja, was expected to appear in court in Vélez-Málaga at some point this Wednesday.