Indian Ponzi Scheme Raised At Least $335 Million From Investors

Indian Ponzi Scheme Raised At Least $335 Million From Investors

 As Indian authorities continue to piece together the massive Saradha Ponzi scheme suspected of swindling thousands of investors out of their life savings, a new report has estimated that the scheme raised at least $335 million from investors.  The Saradha Ponzi scheme, as it is known, was exposed earlier this year after Indian authorities detained Sudipta Sen, who headed the Saradha Group conglomerate.  Besides a heavy financial toll, the scheme's aftermath has also seen at least ten people commit suicide, including investors and employees associated with the scheme.  

The Saradha Group operated a series of companies that dabbled in real estate, motor vehicles, and even bio gas.  Investors were solicited to make varying short-term investments that promised above-average returns.  One company, Saradha Realty, offered investors the ability to invest for a varying range of time, with the option to receive an allotment of land or a refund at the maturity of that investment along with the promised interest.  Depending on the amount invested, each investor was promised returns ranging from 12% to 24%.

The Saradha Group focused on attracting investors through numerous mediums, including a heavy presence in television and print media.  The editor and chief executive of the Saradha Group's media business also had significant ties to one of the leading Indian political parties, which also served to lend an air of legitimacy to the venture. In addition, an extensive network of agents was also used to solicit investors in return for commissions. Based on these efforts, it is believed that over $3 billion was raised from a large amount of investors - many of which were poor investors who entrusted their savings to the scheme. 

Since Sen's arrest, the Indian government has taken several measures, including the establishment of a fund to compensate Saradha investors.  When it became apparent that the fund would not be enough to compensate all of the investors, the government moved forward with commissioning the sale of Saradha Group assets, including properties throughout India and at least seventy-three automobiles.  

For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.

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