Thousands of Italians can say goodbye to about EUR3.6 million they invested into Dexcar, a pyramid scheme operated by Gai Brothers which has now gone broke.
Dexcar was operated by Marco Gai, the managing director and his brother Fabio Gai. With about pittance of EUR800 in equity.
According to a statement he gave to AGCM investigators, “Dexcar is an international company”. However it seems AGCM is not buying his story. The agency has fined the company EUR500,000.
According to Germany’s Gerlach Report, “previous investigations have shown that “the bulk of the money has disappeared in the pockets of sales staff and management.”
As to how the Gai Brothers were able to pull off the fraud, Gerlach Report said:
The Gais were able to rely on the ” criminal multi-level structures “, which are also responsible for the millions of damages at OneCoin : the same people, the same salesman, the same fraudsters. As of December 31, 2015, the company had taken more than € 3.6 million with a subscribed liability capital of only € 800 . Marco Gai and his fraudulent band had at the same time put an investor money of around 3.2 million euros in their own pocket, say Italian investigators.
The dream of a sports car at the most favorable conditions has enticed many participants to this pyramid system : ” Never again spend money on a new car” or “long-term rental car to the monthly zero tariff” were the seductive slogans of Dexcar. At the European Consumer Center in Bolzano ( ECC ), the questions of skeptical consumers were increasing . The ECC warned early of a “possible pyramid system”. New members must be recruited to finance the system . The Bolzano consignors used the AGCM, the Italian competition authority .
Result: Dexcar Autovermietung UG and related companies must pay a total administrative penalty of 455,000 euros. For it was indeed a law-prohibited pyramid system.
According to AGCM, Dexcar since the end of 2014 to the marketing and management of a car rental system through which a consumer to pay a sum entrance 547-1950 Euros was offered the chance to rent a car for 24 months for free . After the first transfer, the consumer was entered into a table. In order to finally get the car, the consumer had to recruit a large number of other people, who in turn had to pay the entrance fee.
However, while some people at the beginning of the chain – so-called partners – generated “substantial income” through money premiums, according to the AGCM, only a “ridiculous number of consumers” had benefited from a free rental car. Specifically, one car for every 128 members. This is called fraud. Bad for all investors: The company can not pay – it has only a basic capital of 800 euros. This is now a case for the prosecutor.
There are no guarantee of whether investors will get back their money. What is sure is that people always lose money to pyramid schemes such as these.