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Magic Cheese Hoax
Thousands defrauded by pyramid selling scam in Chile and Peru
Marcelo Mackinnon (pelarco)     Print Article 
Published 2006-07-21 10:09 (KST)   
On July 17, Chilean police arrested Victor Mella and Fernando Jara, two Chileans who had acted as agents for a firm called Fermex.

Mella and Jara were accused of taking part in a massive pyramidal fraud that duped 6,000 Chileans and 21,000 Peruvians. On July 20 it was reported that the police had confiscated approximately US$4 million from a Fermex bank account, but many of the victims fear that they will never recover their investment.

The story began four years ago in Peru, where a French woman identified as Gilberte van Erpe (a.k.a. Madame Gil) set up a firm named Labomax. The fraud consisted in selling people packs of "Yo Flex," a powder that, she claimed, would ferment milk into a special cheese.

Giselle said that this "Magic Cheese" was the latest fashion in France, where women used it as a skin cosmetic, and which in Africa was used as a food supplement.

Always accompanying Madame Gil was an African man known as the "Doctor," who acted as an international adviser.

The fraud was discovered in Peru, when the couple had accumulated US$70 million, but Madame Gil and the Doctor escaped from that country, only to appear two years ago in Chile, where they formed Fermex and continued the scam.

In Chile, a pack of Yo Flex sold for US$500, but chemical analysis determined that the powder was a dairy ferment worth only US$4. Mella and Jara told victims that Yo Flex should be mixed with milk and that the cheese should be returned to Fermex, which would export it to France and Africa. The agents promised the people that they would double their money in three months.

Initially, Fermex did pay victims profits, but this was a ploy to convince more to invest their money. Soon, many were investing sums ranging from US$5,000 to US$40,000. Many would sell their cars or property or get bank loans to buy the packs of Yo Flex.

One of the areas hardest hit was Coltauco, a rural town of 17,000 located 100 km (63 miles) south of Santiago, the Chilean capital. This March, 200 citizens attended a dinner in honor of Madame Gil, who was described by the owner of the restaurant as a "tall blonde woman, who wore expensive dresses and jewelry and who spoke with a strong French accent."

According to a local newspaper, Las Ultimas Noticias, she appears in a video saying to the townspeople, "We must work together, we are all part of a chain, and I am nobody without your help."

It seems this year Giselle and the Doctor had decided they'd profited enough in Chile and traveled to Brazil on March 12. Chilean justice has issued an arrest warrant through Interpol.

It's possible that the worst is still to come. Many more victims may appear, since Fermex had branches in 17 Chilean cities.

©2006 OhmyNews
Other articles by reporter Marcelo Mackinnon

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