Sunday, 2 November 2014

Ponzi schemer jailed for cheating US residents of $22 mn

Washington (IANS): If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer, jailed in the US for robbing his own people.
Vincent Singh, a Ponzi schemer, has been sentenced to 15 years and eight months in federal jail for preying on the members of his own ethnic Indian Fijian community in the Sacramento region.
In sentencing Singh, US District Judge Morrison C. England Jr. said his crimes were "the worst of their kind that I've seen in 12 years as a federal judge", reported Friday.
According to court papers, over a period of three years, Singh cheated 190 people of Indian Fijian descent who are members of a small, tight-knit community in and around Sacramento, out of $22 million. Then he filed for bankruptcy protection.
Singh, the 46-year-old native of Fiji and former Elk Grove city resident, pleaded guilty in March to wire and bankruptcy fraud.
Assistant US Attorney Matthew Segal, a top white-collar prosecutor in the US Attorney's office, found it hard to describe to Judge England the devastation left in the wake of Singh's merciless quest to get every dime his victims possessed.
"He knew the situation of his victims," Segal said. "He had been in their homes. They served him meals. He knew what the effect was going to be. He didn't just take their money, he took their lives."
The crimes were considered affinity fraud, which refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly or professional groups.

Friday, 17 October 2014

Need to rein in Ponzi schemes

In what could be described as a welcome move, the Department of Financial Services of the Union Ministry of Finance has decided to clamp down on Ponzi schemes which are thriving throughout the country in the name of selling products and services. With several people fleeced by them filing criminal cases against these companies, the Union Ministry of Finance has woken up and taken stock of the situation. It augurs well for the Modi administration to get tough with the illegal money circulation schemes or Ponzi schemes by bringing in the toughest of norms to rein in the money circulation schemes and pyramid marketing businesses. The new norms, it appears, would include a detailed definition of ‘money circulation schemes’ to cover all money-pooling activities with a corpus of less than Rs 100 crore as well as those not covered under the collective investment schemes regulated by the SEBI. As the SEBI can only deal with illicit money-pooling activities with a turnover of Rs 100 crore or more, the ponzi operators are running at times multiple small schemes rather than a single big one. This has to be taken under consideration before framing of new rules to rein in all the ponzi schemes.
However, one has to wait and see the outcome of these proposals. In relation to the amendments to the PCMCSB Act, the draft proposals would be first discussed by various ministries concerned before they are placed before the Union Cabinet for approval. It would be better if the draft legislation is forwarded to the consumer organisations for their views as larger issues are involved. Since the Consumer Affairs Ministry has to decide whether to seek a separate legislation to cover the direct selling companies, these companies may lobby hard for legislation in their favour. The Enforcement Directorate decided recently that Amway alone has siphoned out Rs 8,000 crore illegally out of India. Against this backdrop, the Consumer Affairs Ministry should thoroughly look into all angles of the issue before preparing guidelines for direct selling. The Kerala State government has already prepared some guidelines in this respect, and the Consumer Affairs Ministry could well study them. As SEBI chief U K Sinha rightly pointed out, some action is required in the area of multilevel marketing (MLM) and PCMCSB Act. It is high time all the loopholes are plugged. In a welcome move, the Central government is said to be contemplating heavy penalties and even imprisonment for the managements of companies or individuals running such type of illicit schemes. It has been estimated that people all over India have lost about Rs 3 lakh crore in the schemes illegally run by these fraudulent companies. It is desired that the Union Ministry Finance should take a right decision to completely banish such schemes in the larger interests of people.

The Editorial published in The Hans India newspaper on 18-10-2014

Wednesday, 15 October 2014

Govt turns down Amway's plea to amend PCMC Act

Plans to catch chit funds under Rs 100 cr that escape SEBI net

Aiming to tighten the noose on chit funds that have duped millions, the Centre proposes 
to crack down on all money collection schemes that would otherwise escape the market 
watchdog SEBI.
The Cabinet proposal plans to expand the definition of “money circulation scheme” in 
Prize Chits & Money Circulation Schemes (Banning) Act to include “unauthorised and 
unregulated collection schemes of corpus less than Rs 100 crore, which are excluded from 
the definition of ‘deemed collective investment scheme under SEBI Act.
A recent amendment in SEBI Act gives the market regulator powers to monitor all money-
pooling schemes involving Rs 100 crore or more and act against illegal ones through 
search and seizure, attachment orders and recovery proceedings. However, the high 
threshold would have meant that several small schemes slipped through the net.
Saradha-hit Government plans ordinance teeth for SEBI
Ponzi scheme—a fraudulent investment operation where an individual or organisation pays 
returns to its investors from capital from new investors, rather than from profit earned 
on existing investments — have been bursting on the national scene with great regularity. 
Rough estimates reveal that consumers have lost a staggering Rs 3 lakh crore by 
“investing” in or “buying products” from schemes floated by firms such as Saradha, Pearls 
Agrotech and Speak Asia.
Experts say over 30,000 registered chit funds in the country are regulated by state
registrars under the 1982 Chit Funds Act. But the Intelligence Bureau reported in 2012 
that “fresh” illegal financial activities of chit fund companies were cheating lower 
middle class and poor people, especially in rural and semi urban areas.
The proposed changes, prepared by Department of Financial Services (DFS), also drags in 
“pyramid marketing schemes” within the act with some safeguards to exclude selling of 
goods and services, but not those sales where there is no economic activity or addition 
of economic value save for creating a chain of new participants and distribution of 
economic benefits to the existing ones. The department has also turned down request of 
Indian Direct Selling Association (IDSA) – comprising biggies like Amway, Tupperware and 
Hindustan Unilever Network – to include direct selling schemes as an exempted category 
under Section 11 of the Act.
“Even when an exception clause is to be added to the Act to exclude the activities of 
certain direct selling companies, such provision is not desirable or acceptable, unless a 
very strong legal framework or registration, regulation and scheme of penalties for 
violation of the law on direct selling, is put in place,” says the Cabinet proposal.
“Therefore, till the time a law on direct selling is enacted and unless there is specific 
reference in that law on prohibition of money circulation and pyramid marketing, no 
exception may be created in the PCMCSB Act to exclude the direct selling activities,” 
says the DFS proposal.
However, it passes the onus of framing that law to the Ministry of Consumer Affairs. It 
suggests that the ministry examine the case for creating a new law on direct selling in 
consultation with other relevant ministries. Consumer Affairs, earlier this year, had
asked DFS to “provide clarity

Written by Amitav Ranjan | New Delhi | Posted: October 15, 2014 3:56 am

Sunday, 24 August 2014

Magnetic pillows to a Rs 50,000 cr empire: How PACL, Nirmal Singh Bhangoo made it big

There have been many Ponzi schemes in India's history and then there's Pearls Agrotech Corporation Ltd ( PACL), a conglomerate that has investments ranging from a hotel in Australia to educational institutes. The company has now been instructed by market regulator Sebi to return Rs 50,000 crore to investors within three months.
On its website, the group says it began with a clear road map in 1996: to develop real estate properties; and led by one-time dairy owner Nirmal Singh Bhangoo the company claims it was traditionally involved in the sale and purchase of agricultural land.  Some reports claim that the group initially started out as Gurwant Agrotech, a company selling magnetic pillows and similar products after which it adopted the name of PACL India in 1998.
Since then it has expanded its interests to start a tourism website, educational institutes, a news channel called P7, hotels in Goa and north India, and commercial and residential complexes in and around Delhi. It also owns the 296-room Sheraton Mirage Resort and Spa in Gold Coast, Australia which it bought for a whopping $62 million and reportedly spent $30 million to renovate. Its real estate arm in Australia is reportedly constructing 1,000 apartments in Brisbane and land lots in Melbourne.
But behind the expanse of a business conglomerate, the group faces accusations of being little more than a Ponzi scheme with Bhangoo accused of running a pyramid investment scheme that has allegedly duped around 5 crore investors of around Rs 50,000 crore.
Sebi had initiated action against PACL as far back as February 1998 when it told the group that it couldn't launch any new schemes or continue raising funds under existing ones. The regulator even issued a notice to it in November 1999 alleging that it was operating a pyramid investment scheme.
Little is known about Bhangoo.
Little is known about Bhangoo.
However, the company went to the Rajasthan and Punjab high courts claiming that it was involved in the business of sale and purchase of land and the matter finally landed up before the Supreme Court. The apex court passed an order on the matter in February 2013 asking Sebi to determine whether the group was running a ponzi scheme. However, the entire time the group continued to float new schemes and collect funds through existing schemes.
Defending the company against allegations, PACL CEO Jyoti Narayan had said that the company was a real estate company as it was the most profitable business.
"Therefore, this company does not come under the Sebi's, Irda's and RBI's terms and conditions. PACL is working under directorate of consumer affairs and PACL has also the membership of ficci. So, my friends don't worry about the your is totally safe," he had reportedly said, according to the PACL website.
The group has over 280 branches and had over 8 lakh commission agents who helped it raise money through instalment and cash down payment schemes under which investors were lured with the promise of an interest rate of 12.5 per cent on deposits, in addition to insurance and tax free returns, Daily Mailreport said.
The investors were promised that since the group invested in land their investments would multiply faster than other investments. The company even claimed that property consultants had valued their land at Rs 70,000 crore, despite the fact that some of it was desert land purchased along the India-Pakistan border in Rajasthan.
In February this year, the CBI filed an FIR against Bhangoo and seven others for allegedly raising money through a collective investment scheme with the promise of selling and developing agricultural land.
During searches carried out by the investigating agencies, CBI officials had claimed that they had recovered documents that showed benami properties worth crores in India and abroad. The CBI said that it had also found prima-facie evidence that one of the group's companies had raised money by issuing bogus land allotment letters.
In a detailed analysis of the group in India Today, Asit Jolly also points out that the group took a particularly keen interest in sporting events. The group sponsored the Kings XI Punjab squad in the fourth edition of the IPL and the India-West Indies series in the Caribbean in 2011, two years later it sponsored the Super Fight League fronted by Bollywood's Sanjay Dutt and Raj Kundra, and spent Rs 35 crore over four years on Punjab Deputy Chief Minister Sukhbir Badal's Kabaddi World Cup.
While PACL's former CEO, CEO Maj-Gen K.K. Bakshi (retd), reportedly quit just 10 days before the CBI raids began, little is known about Bhangoo's whereabouts and future plans remain as murky as his operations so far.
While reports claim the group may be putting its hotel in Australia on the block for $170 million, PACL has already said that it will be appealing against Sebi's decision demanding that they return all the funds collected so far. And given how delayed litigation has served them so far, PACL may just have some more time left before it reaches the end of its line.

Friday, 8 August 2014

Ponzi scheme nips career of soldier

Greed to make fast buck through money circulation scheme led to his fall
·         Poddar enrolls members in Amway and
·         Starts online campaign to rope in members
·         Pakistan spy induces him with naked photos
  The menace of money circulation scheme has taken its toll on the career of a soldier, Patan Kumar Poddar, who was arrested on Wednesday on charges of enticing people to join a ponzi scheme and in the transaction was honey-trapped by a foreign spy.
Poddar joined a dubious company which has been running a ponzi scheme for the last few years and started enticing his colleagues to join the scheme to make a fast buck. He started posting the business proposals on his Facebook profile. Interestingly, Poddar is also a member of Amway India Enterprises.
His position in the Army attracted the foreign spy who introduced herself as Anushka Agarwal and started flirting with him online. She claimed that she was studying M Sc in Jhansi in Uttar Pradesh. She offered to utilise his services for an online survey offering a remuneration of Rs 10,000 to Rs 15,000 per month. She started paying amounts regularly in various accounts of Poddar.
The spy had gone ahead to entertain him and posted her naked pictures and he started giving her a lot of information regarding the movement of field and medium regiments on the Western border and photographs of missile units. She had even sent a link to be installed in his office computer with which she could access any classified information without his knowledge.
The AP High Court had rightly said on the writ petition filed by Amway India way back in 2007 that inducement for aggressive enrollment of new members to earn more and more commission was inherent in the scheme of Amway India.

Subedar confesses to passing on defence secrets 
* Info on top 40 Army officers and their movements in Rajastan shared with the Pakistani Facebook friend
* Army denies he was in EME
* Tight security in Army units in TS, Chennai
* Pakistani mole reported to have transferred Rs 70,000-80,000 to his bank account
 Naik Subedar Patan Kumar Poddar of Army’s EME unit in Secunderabad who was arrested by Central Crime Station on Wednesday reportedly told the police that he had passed on the information of about 40 top army officials and their movements in Rajasthan to his facebook friend Anushka Aggarwal.
In a quick move, the EME on Thursday in a statement said that they had nothing to do with Patan and that he was not in EME.
A top police officer who was investigating the case said that Anushka had introduced herself as a scholar for getting insights into the country’s security details. She sought details of missile storage and other army positions in the country. Patan had revealed details of regiments and artillery centres in Secunderabad.
The police are also investigating the espionage issue and verifying the email and Facebook accounts. Sources said that they had already decoded some of the information on which they could lay their hands on.
Speculations were rife during day that National Intelligence and Army Intelligence agencies had sought the custody of Patan but police said that they had not received any such requests. If they wish to get his custody they have to approach the Court. “It is our case and we shall handle this,” said an Assistant Commissioner of police.
Police denied that Rs 10 lakh was transferred by Anushka to the account of Patan. They claim that about Rs 70,000-80,000 was transferred to his SBI account in Kolkata.
It is said that following  Patan’s revelation of sensitive information to Anushka  the security at the Army units of Telangana and Chennai had been beefed up. All the important units were shuffling their personnel in the region, sources added.   

Monday, 14 July 2014

Glaze Trading India aka GALWAY takes unemployed youth for a ride

Glaze Trading India aka GALWAY takes unemployed youth for a ride
In what could be described as the copycat of Amway, Glaze Trading India aka GALWAY, started its cheating operations throughout the country. At least 10,000 youths from all over the two States of Telangana and Andhra Pradesh have already been cheated by this fraudulent company according to series of visuals telecast by TV6 Telugu news channel.
The news channel exposed the dubious ways of this company which has been inducing youths with job opportunity with a monthly salary of Rs. 50,000. However, they were asked to pay Rs. 8,000 for securing the job. After reaching their office in the state of Jharkhand, they were asked to enroll at least four members each to earn unlimited income. Then they realised that they were deceived.
The youths were asked to stay in a dungeon and they were hardly given any work though they were promised to undertake bar-coding, creating e-mail IDs and other works. Dejected, these youths returned to their places.
Aglance at its website, shows that it also sells products for homecare, personal care, biofertiliser among others. The products include G-PSEUDO+, G-DERMA+ both controls root diseases of plants , G-SEAPOWER, which contains seaweed to act as growth promoter. They also sell air-fresheners, toilet cleaner, floor cleaner among others.
Anyway the sense of humour of these fellows should be appreciated. They are openly claiming that it is ‘pseudo’ and selling it. Don’t ask what ‘derma’ has got to do with bio-fertilizer.
Behind all the product sales under direct selling mode, the real cheating is illegal money circulation scheme. This is how Amway has been inspiring many a crook to indulge in illegal money circulation schemes in the name of direct selling.

Tuesday, 8 July 2014

Why these two gentlemen remain behind bars?

Subrato Roy 
Since March 4, he has been behind bars

For the last nearly two months in jail