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JACMEL, Haiti - Nicolas Greffin lost his life savings and property to a cooperative banking scheme that has left him and untold thousands across Haiti in despair.

Without notice, government-endorsed cooperative banks are folding, raising questions about the high interest they paid and allegations they were used to launder drug money.

Their demise has brought new desperation and provoked violent protests in a country mired in poverty and a 2-year-old political impasse that has blocked international aid.

"I lost everything, for six days of illusion," Greffin said, with tears in his eyes.

Caught up in a wave of enthusiasm that began last year, the 54-year old veterinarian's assistant sold two small houses and a plot of land, withdrew his savings from the bank and deposited the lot ? 222,400 gourdes (dlrs 8,900) ? in two of the 10 cooperatives in Jacmel, a seaside tourist town in southern Haiti.

That was May 25. On June 1, many co-ops shut down and the owners vanished with the depositors' savings.

Greffin blames President Jean-Bertrand Aristide because, "He encouraged us to join the cooperative movement and never warned us these banks were not part of it."

Members of legitimate cooperatives, which have existed in Haiti since 1937, pool their resources and invest in farming, fishing, groceries, housing.

As the cooperative banks began operating last year, government advertisements began appearing endorsing the cooperative movement, and officials including Aristide did the same. Though they never tied the movement to the banks, the timing led people to believe their government was endorsing the banks.

Aristide, who some Haitians consider the savior who delivered them from the dictatorship of the Duvalier family, appeared to be endorsing another form of salvation.

"Haiti can only succeed through the cooperative movement," Henriot Petiotte, director of the state National Cooperative Council, said in an interview July 2 on Radio Metropole.

But he also said that "if it's true the president encouraged people to join the cooperative movement," Aristide "referred to traditional cooperatives ? not 'new wave' ones."

The co-op banks offered up to 15 percent monthly interest on term accounts, compared to commercial banks' 2 to 7 percent annual interest. The commercial banks held deposits totaling about 25 billion gourdes (dlrs 1 billion) while the cooperative banks, economists estimate, gathered 2-3.75 billion gourdes (dlrs 80-150 million).

In December, commercial bank customers began moving savings to cooperatives in alarming numbers.

In January, Sogebank, Haiti's largest bank, returned deposits to a dozen or so cooperatives. An economist who spoke on condition of anonymity said correspondent U.S. banks expressed fears the cooperatives were depositing drug money in Sogebank.

Depositing money with legitimate banks could have "washed" the money for drug dealers.

It is no coincidence, economists and analysts say, that the cooperatives shifted into high gear in mid-2001, shortly after passage of a law requiring banks to notify authorities of deposits exceeding dlrs 10,000. The law didn't apply to the co-ops.

Haitians became fearful. Doubt waxed and confidence waned; the number of new investors shrank. Old investors tried to withdraw money too late.

Dozens of co-ops have closed since April, provoking sometimes violent demonstrations.

In Jacmel, more than 5,000 of the 150,000 people had invested in the co-ops. But since one wage earner supports about 10 people in Haiti, some 50,000 people ? a third of the population ? are directly affected.

Jackson Alexandre, a 29-year old accountant, transferred his savings of 187,650 gourdes (dlrs 7,500) to three co-ops. Now he is penniless and out of work. His boss was forced into bankruptcy because of his own co-op investment.

"What happened to Jacmel was worse than a hurricane," Alexandre said.

Mystery still shrouds their ability to pay such high interest rates.

"Do new deposits pay interest on old deposits?" former Planning Minister Marc Bazin asked, alluding to pyramid schemes that, in countries like Albania, led to disaster as money owed to initial investors exceeded funds deposited by those who followed.

In February, Haiti had about 300 co-op banks, with about 185,000 members. It's unclear how many remain.

In Jacmel, only two are left. One, called Coeurs Unis, or United Hearts, has purchased fleets of taxis and buses, gas stations, schools, and real estate since it opened in October.

In May it bought a 28-room beach hotel outside Jacmel for a reported dlrs 3.4 million. With its 40 employees and low room-occupancy rate, it's doubtful the Mirage Hotel is a money-making proposition.

But it is located on a newly tarred 30-kilometer (18-mile) road nicknamed Cocaine Alley. It lies along beaches where boats from Colombia often drop bundles of drugs.

This month, Coeurs Unis lowered its monthly interest rate from 12 to 5 percent.

Days earlier, Aristide announced that "There is no crisis of the cooperative movement" and pledged "the state will abandon nobody who deposited money in a cooperative and was victimized."

But it's doubtful the cash-strapped government can reimburse victims by October, as it has promised.