Suspect arrested in alleged Colombia pyramid scheme

BOGOTA, Colombia (CNN) -- The head of a Colombian company accused of defrauding millions of investors has been arrested in Panama, officials announced Thursday.

David Murcia Guzman, president of a company called DMG, was arrested Wednesday night and immediately deported to Cartagena, Colombia, under the direction of Colombia's police chief, Gen. Oscar Naranjo, authorities said.

Murcia's lawyers, citing security concerns, have asked that he be held at a military facility.

Two of seven DMG principals sought by authorities also were arrested Wednesday, officials in Bogota said.

Thousands of defrauded investors are supposed to start getting their money back Thursday under a government plan. But other investors are planning a march in support of Murcia and DMG. There have been several such marches in various cities since last week.

On Monday, the Colombian government declared a state of emergency, allowing officials to take over businesses that have used pyramid schemes to steal millions of dollars from 3 million investors.

The government immediately took over 60 DMG branches and shut the company's doors. Officials hope to liquidate some of the company's assets to repay defrauded investors.

The emergency decree also stiffened jail time and fines for anyone found guilty of fraud.

The government says the businesses defrauded the public by claiming to offer a sure investment.

Speaking about the emergency measures Monday, Interior Minister Fabio Valencia decried "the Mafia-like mentality" of those "who want to obtain easy money."

"I want to reiterate to all Colombians that these measures -- precautionary and administrative -- that this emergency has dictated are only and exclusively to benefit and protect the well-being of Colombians, who incurred this in a practice that we should abolish -- all Colombians -- that is the belief that fast riches should be an element of our society," Valencia said in a televised statement.

Public outcry and unrest over the fraud led to three deaths last week, including one investor's suicide.

Officials say the pyramid schemes raked in at least $200 million from 3 million people this year. In the past five years, authorities believe, the businesses took in $1 billion.

All About Colombia • Corporate Fraud