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Ponzi Scheme originated in the US in the early 20th Century Wherein public were defrauded of millions of dollars by a swindler named Chalres Ponzi. The sponsors of various fraudulent financial schemes in Pakistan have employed/are employing the Ponzi technique that adopts the following methods in various combinations:
· Offer unusually high rates of return with slogans like doubling money in a short period. These rates are abnormally higher than the return on investment being offered by genuine, established and recognized investment companies.
· Use money of new investors as and ongoing process for paying the old investors to also create a confidence level.
· Use a cover up legitimate business to provide explanation to investigators including media. The return on legal business in minuscule as compared to pay-offs.
· The sponsors are usually bankrupt themselves while living luxurious life styles and use exceptional convincing power to defraud the ‘hypnotized’ victims.
A public Service Message by the awareness and Prevention Division, National Accountability Bureau