The European Kings Club (EKC) was a large-scale

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...

operated from 1991 to 1994 in Switzerland, Germany and Austria by the German nationals Damara and Harald Bertges and Hans Günther Spachtholz. The EKC promised investors profit rates of 70% after buying "letters" for 1,400

Swiss francs The Swiss franc is the currency and legal tender of Switzerland and Liechtenstein. It is also legal tender in the Italian exclave of Campione d'Italia which is surrounded by Swiss territory. The Swiss National Bank (SNB) issues banknotes and the f ...

each. In total, victims bought some two billion

Deutsche Mark The Deutsche Mark (; English: ''German mark''), abbreviated "DM" or "D-Mark" (), was the official currency of West Germany from 1948 until 1990 and later the unified Germany from 1990 until the adoption of the euro in 2002. In English, it was ...

worth of EKC letters. Participation was particularly widespread in central Switzerland, where the scheme's operators successfully exploited popular mistrust in the banking system. In the cantons of

Uri Uri may refer to: Places * Canton of Uri, a canton in Switzerland * Úri, a village and commune in Hungary * Uri, Iran, a village in East Azerbaijan Province * Uri, Jammu and Kashmir, a town in India * Uri (island), an island off Malakula Islan ...

and

Glarus , neighboring_municipalities= Glarus Nord, Glarus Süd, Muotathal (SZ), Innerthal (SZ) , twintowns= Wiesbaden-Biebrich (Germany) } Glarus (; gsw, Glaris; french: Glaris; it, Glarona; rm, Glaruna) is the capital of the canton of Glarus in S ...

, about one in ten citizens bought EKC letters. The scheme collapsed in the autumn of 1994 when authorities in Germany and Switzerland arrested the EKC leadership and managed to seize about 500 million marks of the money paid by the EKC's victims. The collapse of the EKC led to public unrest in the heavily affected parts of Switzerland, where many participants, refusing to believe that they had fallen prey to a Ponzi scheme, organized public demonstrations in support of the EKC leadership, and prosecutors received death threats. Damara Bertges, the EKC's leader, was convicted in 1997 by a German court to 8 years imprisonment for fraud and participation in a criminal organization, and was set free on probation after serving five years. Her husband Harald and their accomplice Spachtholz, as well as another associate, were each convicted to four and a half years of imprisonment.

References

{{reflist Pyramid and Ponzi schemes 1991 establishments in Europe 1994 disestablishments