LBL Investment Scheme in Tanzania Faces Legal Action

Tanzania's LBL Investment Scheme Faces Scrutiny, Expert Warns of Risks

Dar es Salaam, February 26, 2025 – Amid rising interest in online investment schemes, an increasing number of individuals have found themselves trapped in fraudulent ventures. The case of Leo Beneath London (LBL) has emerged as a cautionary tale for those lured into promises of fast returns through digital platforms.

According to the Bank of Tanzania (BoT), LBL has not sought any formal approvals nor been granted a license to operate in the country. Despite this, many people across the nation have invested substantial amounts in the scheme, hoping for lucrative returns.

Economist Professor Haji Semboja addressed the issue in a statement on Wednesday, highlighting the fundamental role of education and awareness in preventing such scams. "The primary reason people fall victim to fraud is a lack of understanding about these services. As technology advances rapidly, it becomes harder to distinguish between legitimate and illegitimate opportunities," he said. "The best prevention is to avoid engaging with these schemes altogether."

This statement follows the recent arrests of several LBL officials by Tanzanian police on charges of operating without a proper license. The BoT's governor, Emmanuel Tutuba, confirmed on February 24, 2025, that legal actions are underway against the company’s officers.

Despite the mounting legal pressure, many of the investors, who had placed their hopes and money in LBL, express frustration. Some individuals, like Aron Kivuyo from Arusha, invested over 2 million Tanzanian shillings with the expectation of daily returns. "Each of us contributed Sh540,000, expecting a daily profit of Sh18,000 by watching 15 videos sent to us. In just 10 workdays, we had each earned Sh180,000," Kivuyo said. "We thought the company was legitimate, but when the payouts stopped, we realized something was wrong."

Kivuyo and his family were later informed that they would need to pay a 50% tax on their investment in order to retrieve their funds. "We received messages from LBL claiming that the Bank of Tanzania demanded taxes on our investments. They said we needed to pay 50% in taxes to get our money back," Kivuyo explained.

Other investors, like Jane Mahiga from the Coast region, also find themselves in a similar predicament. Mahiga, who invested Sh50,000, was promised daily returns of Sh3,500 by watching 10 videos. She has since been instructed to pay the same 50% tax before receiving her refund.

The situation has left many questioning the future of their investments, while others argue that the closure of LBL has taken away a vital income stream. Shafii Shafii, a student from Dar es Salaam, explained how LBL provided a much-needed source of income for him: "I joined with Sh50,000 and was earning Sh3,500 every day. After a month, I had already made back my investment and was receiving payments from the company. For those of us without formal jobs, this was like a salary."

Professor Semboja further reflected on the broader issue of online pyramid schemes, which have flourished alongside advancements in technology. He pointed out that, like other fraudulent schemes, the model is based on initial payouts to attract new investors, which eventually collapses as the number of participants grows. "This is the same pattern we've seen in the past. Initially, you get paid, you recruit others, and then when the system is saturated, everyone loses," he said.

The economist emphasized that the rapid development of technology is a double-edged sword. "While technology provides many opportunities, it also opens the door for fraudulent schemes. Identifying legitimate businesses takes time, and unfortunately, many people end up falling victim," he added.

As the investigation continues, authorities are urging the public to be cautious of online investment platforms that are not licensed or regulated by the relevant financial authorities.