Shopper's club card pumped in drug business

Owner charged with money laundering, bribery

By ASSOCIATED PRESS | Tuesday, December 2, 2008

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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 even 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 month, 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 some of the world's craftiest swindlers. The collapse of one such scheme last month sparked deadly riots by duped investors in more than a dozen southern Colombian towns.

Those riots triggered Mr. 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.

"Where does the money come from? Believe me, I don't know," said housewife Lucia Lizca, 38, whose prepaid 5 million pesos ($2,100) DMG card is now worthless. "But look, that cake maker showed himself to be smarter than a president. I don't know how he cooked it up, but good or bad, he gave a lot of hope to people who have nothing."

The gangly, ponytailed Mr. Murcia was arrested last month in Panama, where he kept a yacht and a fleet of exotic cars. He and six other DMG officials - including his mother, his wife and his brother-in-law - face charges of money laundering, bribery and other crimes related to their rapidly expanding financial empire.

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