BOGOTA, Colombia — It was just three easy steps to the ultimate shopper’s club reward:
1. Buy a prepaid card.
2. Cash it in for groceries, a flat-screen TV or a new car.
3. Six months later, get all your cash back.
That fantastic deal enriched legions of working-class Colombians before President Alvaro Uribe shut down DMG Group Holdings S.A. last week, calling it a pyramid scheme that laundered drug money and raked in $435 million this year alone.
Officials say DMG was the largest in a wave of scams that has swept Colombia, where a well-developed smuggling industry has nurtured crafty swindlers. The collapse of one such scheme this month sparked deadly riots by duped investors in more than a dozen southern towns.
Those riots triggered Uribe’s decision to shut down DMG before it could collapse, a move that outraged many of its 200,000 cardholders. They revere the company’s founder, a 28-year-old former baker named David Murcia, for giving them a shot at the good life.
The gangly, ponytailed Murcia was arrested last week in Panama.
