Monday 25 September 2023

La Nube: Get Rich Quick in Costa Rica!

The viral mechanism that is shared on WhatsApp and social networks is more than 100 years old and has changed its name over the decades, but it always fails

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23 September 2023 - At The Banks - Source: BCCR

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Rico’s TICO BULL – Welcome to La Nube (The Cloud): the trap behind the phrase ‘invest ¢10,000 and earn ¢80,000 easy and fast’. The scheme is more than 100 years old and has changed its name over the decades, but it always fails.

All it takes is ¢10,000 colones – a day’s wage – to get in on La Nube in Costa Rica

Good chance you have already received a WhatsApp message from a friend or family member in which you are promised to earn ¢80,000 colones easily and quickly with only ¢10,000.

It cannot be denied that at first the offer sounds ambitiously tempting. And, who does not want to earn extra money without complications?

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Or maybe you haven’t directly received such a message, but a family or friend has.

The message invites you to participate, telling you to stand by your smartphone at a particular time (later in the day) to get all the details of the invitation.

The invitaiton to La Nuve in Costa Rica is made by way of social media

The scheme is called La Nube – at least in Costa Rica. In another time it was known as a Ponzi scheme, a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors, named after Charles Ponzi, an Italian swindler and con artist in the U.S. and Canada.

The ‘complicated’ situation of Costa Rica becomes the perfect breeding ground for the meteoric rise of these tempting and sexy proposals that promise to fill your pockets with money in exchange for little effort.

The economy of Costa Rica has been in a continuous deceleration since August 2015, according to the data of the Monthly Index of Economic Activity (IMAE) of the Central Bank.

The country has had three consecutive quarters with double-digit unemployment rates (11.3% in the first quarter of the year) and the highest level of informality (46.1%) since the Continuous Employment Survey was applied (ECE), that is, since the third quarter of 2010.

What is La Nube?

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La Nube is nothing more than a Ponzi scheme or pyramid system in which those who are above the structure earn from the money provided by new investors.

It is a system in which people who put money do not invest in financial instruments or products because the nature of this pyramid causes the money of some investors (who are in the lowest levels) to be redistributed, upwards so that it reaches those that occupy the highest positions in the scheme.

The basic premise is to “rob Peter to pay Paul”. Initially, the operator pays high returns to attract investors and entice current investors to invest more money. When other investors begin to participate, a cascade effect begins. The schemer pays a “return” to initial investors from the investments of new participants, rather than from genuine profits.

The amount of the initial investment and payout change, depending on the economic conditions of the audience.

How does La Nube in Costa Rica (or anywhere else) work?

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La Nube s a pyramidal system formed by a structure of 15 people spread over four levels, typically requiring an initial investment and promise of above-average returns.

Level 4 of La Nube: Let’s start from the bottom up. Level four is made up of eight people who contributed ¢10,000 each to enter La Nube, with that money (which can be any other sum) the earnings are paid to the only person who occupies level one alone, ie, the head of the structure receives ¢80,000 colones and automatically leaves the pyramid.

Level 3: At level three there are four other people who helped put the eight members of level four.

Level 2: On the four people of level three there are two people on level two.

Level 1: Once the person from level one (who heads La Nube) receives the money, goes out, then the two members of level two go up and the pyramid is divided into two (one structure for each).

When this happens the new head of the structure should encourage its four members of level three to add two people each with the goal of filling the eight positions of level four, as these new members will provide the money to pay the profits to whom Lead the structure.

The cycle is repeated one, two, three, four and every possible time. Even if a person receives the gains at level one they can re-enter level four on that or any other structure. The faster the members of the pyramid add new members who contribute money, they will quickly climb the four levels and receive the promised gain.

Why is it a fraud?

These pyramids operate completely in the grey, so they do not sell any good or service, offer no support and are not regulated by anyone. In fact, the person who enters must deposit the initial ¢10,000 directly into the bank account of the person who is at the upper level.

La Nube as it is being called in Costa Rica targets an audience (mark) typically confused by the modern terms like the cloud and cryptocurrency. An audience being asked to invest what amounts to a day’s wage, with the promise of turning it into a week’s wages, with little or no effort.

Though new in Costa Rica, La Nube has already made its run in Latin America. Names like La Flor, El Mandala de la Abundancia, La Flor de la Abundancia or El Telar de la Abundancia are but a few.

But, no matter what name it is called, its origin comes from the first case ever recorded, in 1920, in the United States, when the Italian Carlo Ponzi raised a company that operated with this scheme until he was imprisoned for fraud.

The basic premise of a Ponzi scheme is to “rob Peter to pay Paul”. Initially, the operator pays high returns to attract investors and entice current investors to invest more money. When other investors begin to participate, a cascade effect begins. The schemer pays a “return” to initial investors from the investments of new participants, rather than from genuine profits.

The proven risk of the Ponzi is that when people start losing money and stop entering the pyramid, the operator who manages the scheme finds it difficult to pay what was promised to those who are at the lowest levels and then the structure collapses.


Often, high returns encourage investors to leave their money in the scheme, so that the operator does not actually have to pay very much to investors. The operator simply sends statements showing how much they have earned, which maintains the deception that the scheme is an investment with high returns. Investors within a Ponzi scheme may even face difficulties when trying to get their money out of the investment.

A wide variety of investment vehicles and strategies, typically legitimate, have become the basis of Ponzi schemes.

In Costa Rica, in the last couple of decades, two prominent Ponzi schemes came under the names “The Brothers” and “The Cuban”. Although not illegal, both offered high returns – up to 3% monthly – on their investment.

Millions of dollars were raised by these two operators, ‘The Brothers’ operating for more than 20 years. Both collapsed when new funds dried up, leaving thousands of investors with nothing by a promise. Hundreds of investors are now trying to save their investment in the most recent case of “Aldesa“.

I know I will get a lot of flack for calling these Ponzi schemes…but…If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a…

How to smell out a Ponzi

There a “red flags”. Many Ponzi schemes share similar characteristics. The warning signs include:

  • High investment returns with little or no risk.
  • Overly consistent returns.
  • Unregistered investments.
  • Unlicensed sellers.
  • Secretive or complex strategies.
  • Issues with paperwork.
  • Difficulty receiving payments.
  • Investors encouraged to “roll over” investments and sometimes promise even higher returns on the amount rolled over.

The end is almost, always, the same

If a Ponzi scheme is not stopped by authorities, it usually falls apart for one of the following reasons:

  • The operator vanishes, taking all the remaining investment money.
  • Since the scheme requires a continual stream of investments to fund higher returns, if the number of new investors slows down, the scheme collapses.
  • External market forces, such as a sharp decline in the economy may cause many investors to withdraw part or all of their funds.
  • Actual losses are extremely difficult to calculate.
  • The amounts that investors thought they had, were never attainable in the first place.

Pyramid vs Ponzi

A pyramid scheme is similar in some ways to a Ponzi scheme.

In a Ponzi scheme, the schemer acts as a “hub” for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly.

A Ponzi scheme claims to rely on some esoteric investment approach, and often attracts well-to-do investors, whereas pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.

A pyramid scheme typically collapses much faster because it requires exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by persuading most existing participants to reinvest their money, with a relatively small number of new participants.

Charles Ponzi

1920 photo of Charles Ponzi, the namesake of the scheme, while still working as a businessman in his office in Boston

Ponzi spent the last years of his life in poverty, working occasionally as a translator. He died in a charity hospital in Rio de Janeiro, the Hospital São Francisco de Assis of Federal University of Rio de Janeiro on January 18, 1949.



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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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