Spoiled greens

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Sometimes it's OK to not eat your greens
Sometimes it’s better to not eat your greens

SICAD has just been rolled out as a panacea for foreign currency scarcity in Venezuela. But if descriptions of the bureaucratic mess involved in obtaining dollars at auction are any indication, chances are SICAD won’t even begin to cover demand. Which is a crying shame because the alternative – the very illegal black market – is getting riskier and riskier, to the point that its most visible icon recently devolved into an outright salad-themed Ponzi scheme.

Ever since the Illícitos Cambiarios Law was approved in 2010, buying, selling, and even mentioning the price of black market dollars in Venezuela has become a crime punishable by up to 7 years in prison. The answer to this legal gag on all things dollar-related was a flourishing black market, which has spawned its own little sub-culture, jargon (Lechuga Americana, Lechuga Europea, Lechugas en hojas frescas, Lechugas Amazónicas), code-words (1000 a 25. Transfer. Norte. Inbox me.), and a host of anonymous Twitter accounts that helpfully quoted daily reference prices, which, as we established, is illegal.

Among these selfless guiding voices, LechugaVerde.com quickly became the go-to online reference for anyone wishing to consult exchange rates.

Not content with its celebrity status as the black-market Yoda, LechugaVerde.com eventually got in on the action, transacting dollars directly. Except that, for some reason, dollars sold through LechugaVerde.com always came at bargain prices, with buyers ecstatic at what great deals they’d found.

Said customers were assured that their leafy greens would be deposited in a bank account no later than four weeks from the time of purchase, a promise that was initially fulfilled. What produce shoppers didn’t  know is that their money was being scammed out of other unsuspecting salad-lovers. The waiting periods between purchases and deposits increased from weeks to months. Eventually, the Ponzi scheme became unsustainable and LechugaVerde.com imploded in a slimy, green mess.

As of March 8, the website, Facebook page, and Twitter accounts have all been taken down, and all that is left of LechugaVerde are mounting numbers of fraud complaints on the twittersphere from angry, lettuce-less victims.

The saddest part is that LechugaVerde and its crooks will probably never be brought to justice. Scammed folks will most likely never see their money back, since what the victims were doing (consulting dollar prices online) is itself a crime.

It’s sort of how you could never take your drug dealer to court for selling you sub-par weed. As the old saying goes, if you outlaw currency trading, only outlaws will trade currency.

1 COMMENT

  1. It never ceases to amaze me how naive people can be. Seriously you are willing to give strangers your hard earned bolivars to unknown people you found online and wait 4 weeks to get the dollars? You would think that a country that sufferes the Banco latino debacle would have learned the meaning of ” too good to be true”

    • I agree that people who fell for this were naïve. But at the same time is the time of crazy/desperate measure that many people from the middle class falls from while trying to protect the little cash in bs. they manage to save. I mean is crazy to have fallen for this scheme, but it´s almost as crazy to put the money in a savings accounts.

    • Y a los Estafadores de Lechuga Verde, que son unos de los primeros que leen nuestras publicaciones les recordamos: En su estafa, no hay inocentes y ya lo saben y ya lo están sintiendo. El índice delictivo y el hampa común es muy alto y deben tener cuidado tanto ustedes como Todos Sus Familiares y Todos Sus Allegados.

      Gangland!

      • Oh if you’re talking about the show Gangland, they could do an entire season in Venezuela with the Hampa, the military mafias, the pranes, etc. They have of stuff for like, 12 episodes (If they don’t get assaulted while shooting in Petare, of course)

  2. I guess most people who fell for the scam where buying dollars so they paid bs into bs bank accounts which ought to be easily traceable , the scam I expect yielded Bs not US$ to the scammers except to the extent they used those Bs to buy dollars from the very few who where willing to part from them . Ordinary folks are defenseless from inflation so all they can do is buy whatever they can as quickly as they can fueling irrrational consumption and high prices . Our economy’s operation is increasingly chaotic . Now Ramirez announces that it will make available the same 41 billion USD it made available in 2008 to cover import needs which have now risen as the government spends more and more monopoly money !! way to go Giordani. !!

    • yes, they just got a bunch of bolivars, but when you walk off with what you claimed were $130 million worth of bolivars, even if you change at the official rate you get $25 million or more, which ain’t bad for a few months’ work.

  3. Are you sure it was a pure ponzi scheme? My view is that somehow Lechugaverde was ridding SITME. Its hard to define a pure Ponzi scheme when some people got dollars at the beginning. I believe that when SITME started to cut back, the game Lechugaverde was playing ceased to be profitable, then it might turn in to a Ponzi scheme. I seriously doubt that somebody will start a ponzi scheme just to get bolivars. They are very easy to track because besides Cúcuta they are only worth anything in Vzla. Having said so, no sympathy for those that got scammed. Todos los días sale un pendejo a la calle…

    • “Todos los dias sale un pendejo a la calle”.
      I read this blog daily, I find most of the post and comments insightful but I have to say it is ultimately telling of how disconnected some of the people in here are with the reality of our country after reading these comments. You make it sound like the impact of the Ponzi scheme only concerned middle class people trying to dollarize savings from Los Palos Grandes.
      Do you have any trace or idea of how many people were scammed while trying to bring dollars to the country just to import diabetes medication (to quote a recent article) or any essential goods or plainly to make a living? These were not just pendejos who couldnt wait to get ahold precious lechugas verde to sleep better at night.
      It is always easy to call people names (pendejo, fascista, golpista…), when you only contempt yourself with your (limited) vision of reality.

      • Well, you got it wrong. First I believe that “pendejos” a probably uniformly distributed across all Caracas. No need to make reference to any specific neighborhood. Second, you make it sound that this people had no options but to buy from Lechugaverde at a big discount. Everybody in Vzla, at least knows somebody that knows somebody that do currency exchange. If they decided to go for Lechugaverde, a faceless operator, was because the big discount that was offered (Greed). Usually, in Internet when you find the price of a good extremely scarce at a big discount, is a scam. So Virginia, I feel no sympathy from those that thought they were “eating it” buying from this people. That has nothing to do with me being disconnected with reality. The world is full of true victims for me to shed a tear for those that brought this to them.

        • I’m not talking just about Lechugaverde, many people has been scammed because of vicious (and illegal) black market dynamics. At the end of the day, no matter how many reliable contacts you may have or if the rate was discounted or fair, the exchange in the black market is a grim affair. Loads of pendejos, smart, corrupt and/or hardworking people have been ripped off of lots of money.
          I am not asking you to shed tears for the many victims of the world or of this scam in particular, but to understand that we’re not getting out of this hole we’re in by calling people names or assuming we’re so self-righteous as to possess the one and only version of the truth.

          • Virginia, the only “truth” here is that unfortunately this is Venezuela. I have been scammed once or twice, the latter was some supposedly “comisario” that found my stolen truck. I deposited some money to get it back. He called me with the number of my case and all the information. At the end no money and no truck. I did go to the CICPC to denounce, and to the bank so the account were the money was deposited got the required attention. I have played the “pendejo” role too, but the difference is that I am not winning because some faceless crook took my money. I was stupid enough to give him my money. I should have been more careful. I got robbed twice with the same asset. Sorry, still no tears for those, never better said, “lechuguinos”. Don’t take it personal.

    • Fran, the fact that some people got dollars at the beginning doesn’t rule it out from being a Ponzi scheme, actually that’s the way that they work; those that go through it in the early stage enjoy the benefits, thus further helping to spread the word and trust. Anyway, what is pure nowadays?

      • Alfred, you are right in the basics. The point is that you are not considering SITME going off business. My cut is that these guys started riding SITME. Probably they got contacts in several banks so they request got the necessary attention. Remember they were buying at 5,3 Bs. The difference here is that this people were making the orders with others money. That does not make it a ponzi scheme. When SITME started falling apart of course this “business” might have turn into something else. To me that is the more reasonable explanation. The real lure was that they were offering dollars at discount not that they were actually delivering. People took the risk and you see the results.

    • all ponzi schemes offer something of value, and at first come through. doesn’t matter if it’s a 10% return in 6 months or as in this case an effective 10% return in weeks, in a different currency. this is the very definition of a ponzi.

  4. There are still reputable financial institutions trading at the parallel rate very discreetly with complex transactions that are available for corporates and wealthy individuals only. The government has a vendetta against these companies, sure, but what they are doing isn’t strictly speaking illegal. Otherwise, large multi-nationals wouldn’t engage in these trades. Therefore, I wouldn’t be so quick to call all parallel-market traders outlaws. Some of them are blatant crooks, I agree, but many have devoted their working careers to legally bypassing exchange controls.

    • Basically the same thing as a financial carry in the US (or other places). Is it income revenue? Yes. Is it taxed as income? No – Capgains. Is this legal? Yup. Which is why the wealthy in finance have relatively low tax rates when all is said and done (i.e. Buffet, Romney, etc.).

      Funny thing about capitalism is that it forces extremely interesting innovation in protecting capital. The more capital you have, the more inspired the innovations tend to become. I’m sure Cort/Kurt/yoyo/GAC would agree with me.

  5. Does anyone know when Lechuga Verde started offering dollars? I had been using the site as a reference for black market exchange rate for a number of months, but i didn’t realize this business of actually offering exchanges at favorable rates…when did that start?

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