By Andrew Heavens
Reuters
Sunday, May 2, 2010; 5:53 AM

KHARTOUM (Reuters) - Sudanese security services opened fire as they confronted hundreds of protesters demonstrating against a collapsed investment scheme in the strife-torn Darfur region on Sunday, protesters and locals said.

Aid workers and U.N. officials confirmed hearing automatic gunfire after a group of up to 1,000 people was seen moving toward the center of the capital of North Darfur state El Fasher on Sunday morning.

U.N. officials and locals told Reuters last week investors had complained about losing large amounts of money in a Ponzi scheme -- a pyramid model where money is illegally paid from one investor to the other and presented as profit.

"The shooting is still going on ... It is heavy shooting," said one aid worker, speaking on condition of anonymity.

"We don't know if it is police shooting, or civilians, or the Arab militias in town. They lost a lot of money and are very unhappy," said the aid worker, speaking to Reuters from their El Fasher compound by phone.

Darfur's UNAMID peacekeeping force told staff to limit movements and locals told Reuters most shops were shut.

No one was immediately available for comment from El Fasher's police or local government.

Sudanese police started shooting after protesters walked into the city center to hand over a letter to North Darfur's governor asking for the return of their money, a spokesman for the investors told Reuters.

"They used guns against the protest ... They shot some people," said Dirar Abdullah Dirar, saying he was from the League of the Victims of the El Mawasir Market. Mawasir is a local term for water pipe, slang for a dishonest business deal.

One El Fasher resident, speaking on condition of anonymity, said injured people had been taken to a hospital in the city. It was not possible to confirm reports of casualties independently.

Locals told Reuters two men set up a business in El Fasher around 10 months ago, taking in cash and other goods and promising returns of more than 50 percent after a month.

Early investors, who received certificates for their goods, did receive payments, said one investor. But the business closed down in the run up to last month's national elections.

Police arrested two men accused of setting up the investment operation, the secretary general of North Darfur's government, Ali Mohammed Ibrahim, told Reuters last week.

"We noted this morning that there was some movement of people -- the number is estimated at less than 1,000 -- apparently intending to demonstrate about the collapse of the financial market ... We have also noted some sporadic shooting in the air, " said UNAMID communications chief Kemal Saiki.

Saiki could not confirm reports of clashes or casualties.

El Fasher, and Darfur's other major cities, have become thriving commercial centres during the remote western region's seven-year conflict, boosted by foreign cash brought in by aid workers and peacekeepers and accelerating urbanization.

Mostly non-Arab rebels took up arms against Sudan's government in 2003, accusing it of neglecting the region.

Khartoum armed mostly Arab militias to crush the uprising, unleashing a wave of violence that Washington and some activists call genocide -- a charge Khartoum rejects.

(Reporting by Andrew Heavens; editing by Philippa Fletcher)