An Ecuadorian woman identified as Isabel P. managed to defraud more than 300 people by selling land that was not their property. The State Attorney General’s Office managed to prove before a Court that, since 2014, Isabel had been scamming under this modality. The judges decided to sentence her to ten years in prison.
According to the Prosecutor’s Office bulletin, Isabel offered land to people of limited resources using expired documentation and revoked powers, with which he made his victims believe that he had the power to sell, lease or even donate those properties. In exchange, he requested cash, bank deposits or the purchase of materials. However, he never delivered the land.
The modus operandi of the convicted woman was based on the trust she managed to generate among her victims. According to the Prosecutor’s Office, the woman not only used false documentation, but also presented herself as a person with contacts and experience in the sale of land, which legitimized her with those who would later be scammed.
During the trial hearing, the Prosecutor’s Office detailed that the accused operated continuously and managed to illicitly benefit from the payments made by the victims. The economic damage caused is estimated at more than USD 300.000.
To support its accusation, the Public Ministry presented a series of key evidence, including the victims’ versions, accounting and documentary expert reports, as well as a cadastral report related to the Cotahuango hacienda, located in the south of Quito, one of the places where Isabel offered non-existent land.
The Court, in addition to the punishment with prison, ordered that the defendant pay a fine equivalent to forty unified basic salaries (approximately USD 18,400). Likewise, he ordered the return of more than USD 300,000 to the victims.
Scam is framed as a crime as defined in article 186 of the Comprehensive Criminal Organic Code (COIP). For this case, paragraphs 1 and 3 were applied, which aggravate the crime due to its massive nature, according to the Prosecutor’s Office.
With barely 16 years of difference, two cases in Ecuador are emblematic: that of notary Cabrera and that of “Don Naza” – the latter happened in 2022. In both illegal systems the captors died and people lost their money. In addition to these, in 2022 it was known that in Loja, south of Ecuador, at least 200,000 people were immersed in pyramids that offered them interest on their capital in the short term.
José Cabrera Román, second notary of Machala, managed an illegal money collection network that exceeded the reserves of some of the main banks in Ecuador. His scheme raised around USD 800 million from more than 35,000 clients, including the military, judges, merchants and migrants. This amount even exceeded the deposits managed by the Bank of Guayaquil at that time. The fraudulent operation, which paid interest of up to 12% per month, came to light after his death in a luxury hotel in Quito, where he suffered a heart attack. Despite the impact of the case, no one was ever sentenced or resolved judicially.
Instead, Miguel Nazareno, known as ‘Don Naza’, operated Big Money, a pyramid scheme that promised to pay 90% interest in eight days. Their network, which began in 2017 with 40 partners, grew to involve thousands, including more than a hundred military members. In 2022, his operation was raided, and months later, his body was found tied up in the south of Quito, after a series of events that involved the entry of large sums of money into the Ministry of Defense. The Armed Forces face disciplinary processes, but the case remains surrounded by uncertainty.
A pyramid scheme is a deceptive business plan that illegally captures resources and that supports its operation in the rapid growth of its depositors. This growth is driven by contributions from clients who receive higher interest rates than companies in the formal financial system can pay.
This scheme works as long as a large amount of new money enters the mechanism, otherwise the saturation score is obtained and the customers who are in the system at that time lose their money.
