Another financial pyramid has come crashing down with a loud bang.

More than eight thousand investors were left buried under its ruins. The organizers managed to raise 21 billion tenge.

The Agency for Financial Monitoring and law enforcement agencies had to investigate all the circumstances of this massive scam. The final chapter in its history was written by the verdict of the Konayev City Court. The leaders of the financial pyramid "Amanat Drive" – previously convicted K. Shüken, born in 1982, a native of the Karaganda Region, and M. Üretbek, born in 1999 – received criminal sentences of actual imprisonment. Their property, including apartments in Astana and luxury vehicles, was confiscated to the state treasury.

…On March 2, 2020, K. Shüken registered the "Amanat Drive Consumer Cooperative" with the justice authorities of Astana, assuming the position of its head.

But in essence, under the guise of a cooperative, an ordinary financial pyramid had been created. K. Shüken was engaged in recruiting participants as shareholders, held presentations urging people to join the cooperative, and signed contracts with them without disclosing the company's true nature, thereby misleading new investors.

The scheme he devised was simple – attracting investors' funds under the pretext of a profitable investment with a guaranteed loan. And here, as they say, "was the rub" – the money, following the established laws of financial pyramids, was circulated using contributions from other new shareholders.

Those who "took the bait" were promised an interest-free loan for the purchase of movable or immovable property. However, to obtain it, an investor was required to pay a mandatory entrance fee of five percent of the value of the intended property or vehicle, as well as a monthly contribution of three thousand tenge to the cooperative's reserve fund as a share payment.

So, to be able to purchase movable or immovable property, an investor had to accumulate 30 percent of the cost of the housing or vehicle (over a period of up to three years), with the remaining 70 percent supposedly financed from the cooperative's fund, which was replenished by contributions from other shareholders (investors). After purchasing the movable or immovable property, the investor was required to pledge it as collateral and repay the cooperative the 70 percent of its value according to an individual payment schedule over a period of up to ten years.

Everything "ingenious" is essentially very simple – the intent was to organize activities aimed at generating income from attracting funds from individuals without using these funds for entrepreneurial activities, instead redistributing these assets to some participants at the expense of contributions from others.

K. Shüken, Shüken, perhaps, had come to believe in the absence of risk despite high returns, hoping that the promise of interest-free loans would attract an ever-increasing number of investors in need of movable and immovable property, regardless of their age, financial, or social status.

Possessing certain skills of influence and persuasion, as well as knowledge in organizing advertising campaigns, Shüken lured citizens into the cooperative through the social network Instagram, where he had over 207 thousand followers.

He launched an aggressive advertising campaign for the cooperative simultaneously across all regions of the country. The advertising on all possible social platforms became increasingly persistent. In all regions of the country, the organization and recruitment of new investors was handled by people he hired. Branches and representative offices of the cooperative were opened in rented premises without registration with the justice authorities.

Regional managers and employees of the cooperative conducted explanatory work, initially unaware of the founder's criminal intentions. In order to incentivize the recruitment of citizens, managers were paid bonuses on top of their salaries for each new investor.

In short, the operation was running briskly, ensuring a wide reach of shareholders. Rubbing his hands with satisfaction at the scale of his activities, Shüken opened new branches and current accounts for the cooperative in second-tier banks and branches of Kazpost JSC.

But the reality was that, since meeting the needs of one group of investors was planned using contributions from others, due to the long waiting period for loans, fulfilling obligations to all participants became patently impossible. In the event of a slowdown or complete halt in the inflow of new investors' money, the cooperative would no longer be able to meet its obligations to provide them with housing and vehicles.

This threatened the emergence of a critical mass of dissatisfied shareholders, since this program – a social savings system for financing the purchase of real estate and vehicles – was economically unjustified and not backed by financial resources. The funds in the form of the five-percent entrance fee and the monthly payments to the reserve fund were irrevocable from the very beginning and constituted the income of the organizer of the entire criminal scheme under the guise of providing consulting services for attracting shareholders.

According to the Law of the Republic of Kazakhstan "On Consumer Cooperatives," a consumer cooperative is a voluntary association of citizens based on membership, created to satisfy the material and other needs of participants through property (share) contributions. However, K. Shüken, realizing that the cooperative scheme was financially inefficient for investors, continued to convince citizens that his program for issuing loans for the purchase of movable and immovable property was superior to the existing lending conditions of second-tier banks.

In reality, as the founder of the cooperative and effectively its sole manager, even while recognizing the illegality of his actions, he managed to systematize the activity of generating income from attracting funds from individuals, with no intention of engaging in entrepreneurial activity.

As a result, he managed to involve 8,029 citizens as shareholders without actually including them as members of the cooperative. Between March 2020 and September 2024, all of them deposited funds of an especially large scale – 20,406,585,069 tenge – into the cooperative's current accounts.

A FURIOUS PACE OF ACTIVITY

Throughout these years, in order to attract ever more shareholders to the cooperative, K. Shüken tirelessly traveled to regional offices, where he personally conducted promotional campaigns among the public to recruit them, convincing them of the advantages of receiving funds in the form of share and other contributions, and interest-free loans for purchasing property. At the same time, he persistently kept silent about their subsequent redistribution and his own enrichment from the incoming contributions.

As a result, during this period, the cooperative provided interest-free loans to 463 investors, who used them to purchase 463 real estate properties (apartments and houses) in various cities across the republic.

These properties, under purchase agreements with deferred payment, were acquired by the Cooperative for a total of 7,534,086,137 tenge for some shareholders using funds from other shareholders. In addition, the Cooperative provided interest-free loans to investors who planned to purchase cars in this manner. Under the founder's scheme, 872 vehicles were purchased for a total of 4,948,575,474 tenge – again, through the circulation of shareholders' funds.

K. Shüken managed to collect contributions and payments without hindrance and extract income without using the raised funds for entrepreneurial activities. He did not worry as long as he could meet the assumed obligations by redistributing these assets and enriching some participants at the expense of contributions from others.

He spent the fabulously large sums obtained through criminal means, among other things, on himself and his relatives.

In violation of paragraphs 4 and 5 of Article 13 of the Law of the Republic of Kazakhstan "On Consumer Cooperatives," no membership agreements were concluded with investors for joining the consumer cooperative. Investors were not included in the cooperative's membership, and consequently, their payment of entrance fees was illegal. Unaware of K. Shüken's unlawful intentions, the misled investors voluntarily entered into share accumulation agreements with the cooperative in their own name, transferring funds to it. The cooperative did not obtain any permits for operating in the financial market.

IN THE DOCK

During the court hearing, the defendant K. Shüken did not plead guilty. In his opinion, the "Amanat Drive" Consumer Cooperative is not a financial pyramid, and he considers it the best project.

The chairman of the "Amanat Drive" Consumer Cooperative explained that when the cooperative was created, its founders included shareholders whom he had not previously known, and that there was a record of the general meeting. He also stated that he had established a social fund called "Asyl Adam," which was a fund for the underprivileged. He claimed that he had been honored for this work, that he had built housing, and helped people during the floods. He also said that he opened a cooperative in Turkey and brought in cars from China under a cooperation agreement. He added that after leaving his job as a marketer at the "Amanat Home" Consumer Cooperative, he decided to build a system for the people. All the shareholders supported him.

THE VICTIMS

One of the many victims, J.E., testified in court that on May 29, 2022, she invested 5,265,000 tenge in the cooperative. This was money she had received from selling her private house in a village. She was told that if she recruited five more investors, they could provide her with a house or a plot of land on which she could build a home.

However, after that, they disappeared. They did not reply to messages. Having waited until 2024, she was unaware that a criminal case had been opened against the defendant. On January 22, 2024, she filed an application for the return of her funds. In August 2024, she received 500 thousand tenge back. After that, she filed a civil lawsuit in court for the remaining 4,765,000 tenge.

By the court's verdict, K. Shüken was found guilty of committing criminal offenses and sentenced to eight years of imprisonment, with confiscation of property, and was disqualified from holding leadership positions in financial organizations and organizations involved in attracting funds for a period of seven years. His business associate, M. Üretbek, was also found guilty and sentenced to one year of imprisonment.

WHY ARE FINANCIAL PYRAMIDS SO RESILIENT?

Every time we see yet another collapsed pyramid, the question arises: why, despite high-profile exposés, criminal cases, and warnings, do people continue to walk into this trap? Why do the lessons learned by some investors not serve as a warning to others?

As the example of "Amanat Drive" shows, the life cycle of any financial pyramid follows one rigid logic: it survives only as long as the influx of money from new investors covers the obligations to the old ones. The scheme is always the same and is built on creating an illusion of success. The first investors are indeed paid the promised returns – and these initial payouts become the primary advertising tool and the engine of the fraud.

Having made a profit, a person reinvests, and word-of-mouth spreads. Friends and relatives learn about the project. Telegram and WhatsApp chats, lavish presentations, all fuel the hype. The investors' money, as in the "Amanat Drive" case, goes toward luxury cars, real estate, and dividends for the organizers. Participants are told: come yourself, bring others along, and you'll get a percentage of their contributions. The pyramid looks convincing from the outside: money comes in, payouts are made, offices are operating, and the number of positive reviews is growing.

It all ends in collapse. When the influx of new participants slows down, the organizers impose restrictions on withdrawals: first they cite technical failures, then they demand additional payments for "taxes" or "insurance fees." Soon, payments stop, offices close, and accounts vanish.

It would be an oversimplification to think that only financially illiterate or overly trusting people fall into the pyramid trap. Anyone can become a victim – the organizers skillfully exploit the peculiarities of human psychology. Emotions and cleverly constructed traps are at play. People are willing to believe a friend or colleague who has already "earned" money and sincerely recommends the project. Such trust lowers their defensive mechanisms. And how can one resist when the pyramid's chats are full of photos of expensive purchases? Natural human emotions kick in – the fear of "missing out," the example of a successful neighbor, greed, and the hope of a quick solution to financial problems. Those with high debt or low incomes are particularly vulnerable. The pyramid sells them hope of escaping a difficult situation. The organizers also apply pressure – "join today, or tomorrow it will be too late..."

Society experiences the effect of "ludomania," where the thirst for easy money and the thrill completely overwhelm a person's reason.

The resilience of pyramids probably also lies in their remarkable ability to adapt, as organizers come up with modern schemes such as cooperatives, "investment clubs," network marketing, "psychology and personal growth" training courses, or cryptocurrency projects. Tracking the activities of these "projects" is becoming increasingly difficult because they hide in Telegram and other messengers. People with large networks of acquaintances help to promote and professionally disseminate these pyramids, purposefully recruiting new participants and ensuring a flow of money through the same word-of-mouth principle. And these "helpers" often remain unpunished.

In this regard, the "Amanat Drive" case can be viewed as yet another predictable episode in the unending saga of financial pyramids. They are resilient because they are fueled by the indomitable human hope for a miracle.

Assem SAKENOVA