The Civil Division of the High court has ordered Smart Protus Magara to refund more than $135,000 (about Shs 500 million) to two Tanzanian nationals after finding him personally liable for money they lost in the collapsed D9 Investment Club Ponzi scheme.In a judgment delivered by justice Bernard Namanya, the court found that Magara failed to account for funds deposited into his personal Equity bank account by Goodluck Francis Kway and George Kessy, despite claiming the money had been used to purchase electronic currency, commonly referred to as e-money.The dispute arose from investments made in the now-defunct D9 Investment Club, an online Ponzi scheme that collapsed after attracting hundreds of investors in Uganda and other countries with promises of unusually high returns.According to court records, Kway and Kessy met Magara in Kampala, where he introduced them to the scheme and represented that investors would earn returns of $400 for every $1,000 invested.Acting on those representations, Kway deposited $58,098, while Kessy deposited $79,945, bringing the total amount paid into Magara’s personal account to $138,043.The two investors told the court that they neither received the promised returns nor recovered their principal investment. They said repeated demands for a refund, including a formal notice of intention to sue, went unanswered, prompting them to file the case.In his defence, Magara denied being the owner or promoter of D9 Investment Club, describing himself as an ordinary member of an online platform registered outside Uganda.He argued that participation in the platform was voluntary and that the money deposited into his account was payment for e-money rather than an investment entrusted to him.Magara further maintained that he transferred the e-money to the plaintiffs’ online accounts and that the collapse of the D9 platform in 2017 was beyond his control. He added that he, too, suffered financial losses when the scheme collapsed.However, Justice Namanya found that explanation unsupported by evidence. The judge noted that Magara failed to produce transaction records from the D9 platform, account statements showing corresponding e-money transfers, or any other documentation demonstrating that the plaintiffs had received value for the money deposited into his account.The court also rejected Magara’s reliance on the official receiver process that followed the collapse of D9, observing that there was no evidence that Kway and Kessy had been verified as creditors or compensated through that process.Justice Namanya concluded that the plaintiffs had proved, on a balance of probabilities, that they deposited $135,016 into Magara’s personal bank account and that he failed to account for, refund or otherwise apply the money for their benefit.The court consequently held Magara personally liable and ordered him to refund the money. In addition to the principal sum, the court ordered Magara to pay interest at 20 per cent per annum from 2022 until payment in full, as well as the costs of the suit.The D9 Investment Club was among several Ponzi schemes that left thousands of investors in Uganda and across the region counting heavy losses after promising exceptionally high returns before eventually collapsing.Ponzi schemes typically lure investors by paying early participants with funds contributed by new investors rather than genuine profits, before collapsing when fresh deposits are no longer sufficient to sustain the payouts.The post Court orders Magara to refund $135,000 lost in D9 Ponzi scheme appeared first on The Observer Media Ltd.