COLOMBIA:PIRAMIDE FINANCIERA

Colombia seeks 'scam boss' arrest

Protests in several Colombian cities left at least two people dead

Colombian authorities have asked Panama to arrest and extradite a man suspected of running a pyramid finance scheme that collapsed last week.

Prosecutors said they had evidence the company, DMG, was a front for money-laundering. The firm denies wrongdoing.

DMG's main shareholder, David Murcia, fled to Panama when the scheme failed, prompting deadly widespread protests by investors who had lost money.

DMG had promised investors returns of up to 150% a month on their deposits.

It was among several finance firms whose sudden closure prompted violent protests in a number of Colombian cities, in which at least two people died.

International warrants

Colombian prosecutors have ordered the arrest of seven DMG bosses and the authorities are investigating possible links between the firm and Colombia's multibillion-dollar cocaine trade.

"They founded and promoted the business with illicit resources," said Mario Iguaran, Colombia's attorney general.

Many people put their life savings in the investment schemes

A lawyer for DMG denied the allegations and said the company's managers were ready to cooperate with the investigation.

On Monday, Colombia's government announced four emergency decrees and declared a state of "social emergency" under which police could seize money from firms accused of illicit activities to reimburse investors.

Police sealed the offices of most of the 240 pyramid schemes they had tracked down, which between them had collected well over $200m, correspondents say.

International arrest warrants were issued for the heads of the pyramid schemes, but many are believed to have fled the country, taking hundreds of millions of dollars with them.

Colombia's President Alvaro Uribe has vowed to help poor investors recover their money after many of them lost their life savings.

He said police had already seized some $40m (£27m) held by pyramid schemes and that some of the finance companies had begun returning money to investors.

The emergency decrees set out new procedures to intervene in financial firms operating without authority and to seize their funds