Several instances of friends turning enemies over money lost in the illegal Ponzi schemes have been reported from the city.
Several instances of friends turning enemies over money lost in the illegal Ponzi schemes have been reported from the city.
According to the US’ Federal Bureau of Investigation, a Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.”
New members are mostly introduced to the money-chain by friends or acquaintances. And if they lose money in the scheme, such friends turn foes within no time.
A senior police officer said he knew about at least five cases of friends turning bitter enemies after losing money in the Ponzi schemes. In some cases, the enmity reached such a point that they end up in police stations.
“After people get to know that they have been cheated, they get into fights with friends who introduced them to such schemes. I remember such a case which was registered in the Nandini Layout police station a couple of years ago,” assistant commissioner of police (crime branch) BN Nyamagouda said, adding that a case of abetment to cheating could be slapped on those who persuade others to join such schemes.
A member, who had invested money in the chain, would be persuading his or her friends to join the scheme for the commission or rewards offered to them. Most rackets running the scheme in the city have been offering foreign tours, among others, as bait to their members to add more persons to the chain.
“Initially things will be smooth, and both the new member as well as the person who had introduced him or her to the chain would be happy. But fissures appear in their relationship after a few years once they get to know that they have been cheated,” he said.
Nyamagouda said the person who had introduced his friend to the scheme would be helpless once he realises the forgery. However, the person who had been persuaded to join the scheme would take none of the excuses, but demand money, saying the other person had conned him into becoming a member.
“When the argument between them turns ugly, they go to the police station and lodge complaints against each other,” the officer said.
Nyamagouda said the city currently had at least 50 Ponzi schemes, run without the necessary permission from departments concerned or the Reserve Bank of India.
Such firms recruit known people, and function out of rented space. The offices have proper signboards and brochures. They normally forge documents to make the firm look genuine.
Nyamagouda said such firms gave the promised commission at the beginning, but disappeared with the money after meeting their target.
‘Ponzi scheme’ was coined based on Italian Charles Ponzi’s swindling of money from credulous investors who put their money to buy discounted postal reply coupons.
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