Authorities in Alabama have arrested a young Indian man for committing a Ponzi scam worth $400,000. Pathyam Patel of Gandhinagar, Gujarat, has been arrested for guaranteeing massive returns after starting to sell securities.

Authorities in Alabama have arrested a young Indian man for committing a Ponzi scam worth $400,000. Pathyam Patel of Gandhinagar, Gujarat, has been arrested for guaranteeing massive returns after starting to sell securities. However, he used the money only for personal expenses and never invested in securities. The Alabama Securities Commission (ASC) confirmed that they arrested Patel in Alabama on March 6. He violated at least nine counts of securities law violations, the Times of India newspaper reported. ASC stated, "The indictment alleges that Patel sold more than $4,00,000 in investment contracts to at least six investors. Patel represented that he was associated with Infinity Wealth Management, an investment advisory firm, which he claimed was registered with the US Securities and Exchange Commission." Patel promised investors to earn massive profits by investing their money, guaranteeing that there would be no loss of their principal amount. Patel also asked for additional payments to maintain their investments. ALSO READ | India firmly supports Philippines sovereignty: Jaishankar in wake of South China Sea incidents "Patel did not invest the funds as communicated to the investors. Instead, he used them for gambling on sporting events, personal expenses and paying other investors. Patel had no ability to guarantee that the investors would not lose their principal (amount)," ASC added. The authorities also revealed that while running the scam, Patel was not even registered with the ASC to sell securities in Alabama. Moreover, the investment contracts which Patel sold were not ASC-registered. He was neither a registered investment advisor nor a broker-dealer. Investor.gov describes the Ponzi scheme as "an investment fraud that pays existing investors with funds collected from new investors." In a Ponzi scheme, organisers often promise to invest your funds and generate high returns with little or no risk. However, they do not invest any money. They use it to pay those who invested earlier and keep some portion for their expense. (With inputs from agencies)

Alabama authorities arrest Indian man over Ponzi scheme fraud worth $400,000

A Thailand criminal court on Wednesday sentenced a couple to 12,640 years’ jail term each for duping people online in a Ponzi scheme under the guise of a savings plan, as per Straits Times.&nbsp;

The online crimes were committed by Wantanee Tippaveth and her husband Methi Chinpha in 2019 when&nbsp;the couple conned people online. However, it was just not the duo who ran this big scam to leach money off people.&nbsp;During the hearing of the trial, the couple confessed to their crimes and said that there were seven other people along with them who played a part to run the scam.&nbsp;

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The couple invited people on the social media platform Facebook between March and October 2019. They would urge people online to make investments in a savings scheme. To make it look appealing to people, they would promise that the investments will bring&nbsp;them 93 per cent returns.&nbsp;

To make it look real and to convince people of the 'veracity' of the fraud ponzi scheme, Wantanee would often posted online videos wherein she would show off her gold jewellery in a jewellery shop.&nbsp;

She would claim that she owned the shop. However, the jewellery turned out to be fake. In reality, it was not even a shop. It was a counter which the couple set up beside the room which is styled as an office space.&nbsp;

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The court held the couple guilty of scamming millions of dollars from more than 2,000 people in the Ponzi scheme, an investment fraud that pays existing investors with funds collected from new investors.&nbsp;

One of the ways how the couple was able to fool people online is how they portrayed themselves online. Their posts were all curated in a manner that would make them appear to be super-rich people with lavish lifestyles. But everything was fake.&nbsp;

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It was not an ordinary scam as about 2,533 people joined the so-called savings scheme making them the victim.&nbsp;The people who joined the Ponzi scheme ended up making huge investments of about 1.3 billion baht (S$51.3 million).

<h2>Total jail for 20 years</h2>

The jail term of 12,640 years was commuted to 5,056 years by Thailand’s Criminal Court. The decision was taken by the court because Wantanee Tippaveth and her husband, Methi Chinpha, confessed to their crimes.

Now, both husband and wife are expected to be in prison for just two decades. It is because of the law in Thailand which puts a bar on the total jail time to 20 years each.

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A Thailand criminal court on Wednesday sentenced a couple to 12,640 years’ jail term each for duping people online in a Ponzi scheme under the guise of a savings plan, as per Straits Times.

A Thailand criminal court on Wednesday sentenced a couple to 12,640 years’ jail term each for duping people online in a Ponzi scheme under the guise of a savings plan, as per Straits Times. The online crimes were committed by Wantanee Tippaveth and her husband Methi Chinpha in 2019 when the couple conned people online. However, it was just not the duo who ran this big scam to leach money off people. During the hearing of the trial, the couple confessed to their crimes and said that there were seven other people along with them who played a part to run the scam. Also Read | EXCLUSIVE: Jaishankar flags need for adherence, respect for 'constitution of the oceans' UNCLOS The couple invited people on the social media platform Facebook between March and October 2019. They would urge people online to make investments in a savings scheme. To make it look appealing to people, they would promise that the investments will bring them 93 per cent returns. To make it look real and to convince people of the 'veracity' of the fraud ponzi scheme, Wantanee would often posted online videos wherein she would show off her gold jewellery in a jewellery shop. She would claim that she owned the shop. However, the jewellery turned out to be fake. In reality, it was not even a shop. It was a counter which the couple set up beside the room which is styled as an office space. Also Read | Portuguese parliament legalises euthanasia for people over 18 The court held the couple guilty of scamming millions of dollars from more than 2,000 people in the Ponzi scheme, an investment fraud that pays existing investors with funds collected from new investors. One of the ways how the couple was able to fool people online is how they portrayed themselves online. Their posts were all curated in a manner that would make them appear to be super-rich people with lavish lifestyles. But everything was fake. Watch | Exclusive: Talking Tennis with Stefanos Tsitsipas | Sports News × It was not an ordinary scam as about 2,533 people joined the so-called savings scheme making them the victim. The people who joined the Ponzi scheme ended up making huge investments of about 1.3 billion baht (S$51.3 million). Total jail for 20 years The jail term of 12,640 years was commuted to 5,056 years by Thailand’s Criminal Court. The decision was taken by the court because Wantanee Tippaveth and her husband, Methi Chinpha, confessed to their crimes. Now, both husband and wife are expected to be in prison for just two decades. It is because of the law in Thailand which puts a bar on the total jail time to 20 years each. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. ×

Thailand court sentences couple to over 12,000 years in jail for Ponzi scam

The deputy governor of the Reserve Bank of India (RBI) has equated cryptocurrencies with Ponzi schemes. In a speech, T Rabi Shankar, the Deputy Governor even opined that 'banning' cryptocurrencies was the most sensible option for India.&nbsp;

"We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may be even be worse," T. Rabi Sankar said.

"All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India."

India's central bank chief last week delivered a stark warning against investing in cryptocurrencies, saying they lacked the underlying value of even a tulip - in a reference to a speculative bubble that gripped the Netherlands in the 17th century.

Indian Finance Minister Nirmala Sitharaman, earlier this month, presented Union Budget 2022. In this year's budget, the Indian government has announced its decision of taxing gains from cryptocurrency investments at a steep rate of 30 per cent. However, full legality of cryptocurrencies that are not issued by the government is still in question.

India is also going to launch digital rupee. Sitharaman said on Monday that discussions with regard to central bank-backed digital currency have been going on with the Reserve Bank and a decision will be taken after due deliberations.

She said the discussions with the RBI regarding the CBDC (Central Bank Digital Currency) were going on prior to the Budget announcement, and they are continuing.

RBI Governor Shaktikanta Das added that like several other issues, this particular issue is internally under discussion between the RBI and the government.

"Whatever points we have we discuss with the government," he added.

CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. They are not money and certainly not currency.

(With inputs from agencies)

The deputy governor of the Reserve Bank of India (RBI) has equated cryptocurrencies with Ponzi schemes. In a speech, T Rabi Shankar, the Deputy Governor even opined that 'banning' cryptocurrencies was the most sensible option for India.

The deputy governor of the Reserve Bank of India (RBI) has equated cryptocurrencies with Ponzi schemes. In a speech, T Rabi Shankar, the Deputy Governor even opined that 'banning' cryptocurrencies was the most sensible option for India. "We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may be even be worse," T. Rabi Sankar said. "All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India." India's central bank chief last week delivered a stark warning against investing in cryptocurrencies, saying they lacked the underlying value of even a tulip - in a reference to a speculative bubble that gripped the Netherlands in the 17th century. Indian Finance Minister Nirmala Sitharaman, earlier this month, presented Union Budget 2022. In this year's budget, the Indian government has announced its decision of taxing gains from cryptocurrency investments at a steep rate of 30 per cent. However, full legality of cryptocurrencies that are not issued by the government is still in question. India is also going to launch digital rupee. Sitharaman said on Monday that discussions with regard to central bank-backed digital currency have been going on with the Reserve Bank and a decision will be taken after due deliberations. She said the discussions with the RBI regarding the CBDC (Central Bank Digital Currency) were going on prior to the Budget announcement, and they are continuing. RBI Governor Shaktikanta Das added that like several other issues, this particular issue is internally under discussion between the RBI and the government. "Whatever points we have we discuss with the government," he added. CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrency that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. They are not money and certainly not currency. (With inputs from agencies)

Reserve Bank of India deputy governor equates crypto with Ponzi schemes

Ballari mining baron Janardhan Reddy has been sent to judicial custody until November 24, news agency ANI reported.&nbsp;

Janardhan Reddy was <a href="http://www.wionews.com/india-news/ballari-mining-baron-janardhan-reddy-arrested-in-bengaluru-in-connection-with-ponzi-scheme-176639">arrested by Bengaluru Central Crime Branch</a>, in connection with Ambident Group alleged bribery case, earlier on Sunday.&nbsp;

Additional CP Crime Branch, Alok Kumar, stated that the arrest has been made on the basis of "credible evidence and witnesses' statements".&nbsp;

"We will produce him before the magistrate. We are going to recover the money and give it to the investors," Kumar added.&nbsp;

The Central Crime Branch also arrested Ali Khan, Reddy's close aide.&nbsp;

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Janardhan Reddy who was arrested by Bengaluru Central Crime Branch, in connection with Ambident Group alleged bribery case has been sent to judicial custody till November 24. <a href="https://t.co/YrIBxCQWfJ">pic.twitter.com/YrIBxCQWfJ</a>
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Reddy was arrested in connection with the alleged Ambident ponzi scheme.&nbsp;

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Today Janardhan Reddy was produced before the Judge &amp; the Court was pleased to accept our bail application on record. Judge has granted time till tomorrow to file objection on the main bail application &amp; the application will be taken tomorrow: Janardhan Reddy's Lawyer. <a href="https://twitter.com/hashtag/Karnataka?src=hash&amp;ref_src=twsrc%5Etfw">#Karnataka</a> <a href="https://t.co/MpKxUaJyQ2">pic.twitter.com/MpKxUaJyQ2</a>
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Syed Ahmed Fareed, the owner of Ambident, had claimed he had paid Rs 18 crore to be let off when the ponzi scheme came to light. Fareed said Reddy, who had been a minister in the then BS Yeddyurappa government, had asked for the money during a meeting at a hotel.&nbsp;

Fareed said the money had been paid; that it had been routed to Reddy's aide.&nbsp;

(With inputs from agencies)&nbsp;

Ballari mining baron Janardhan Reddy has been sent to judicial custody until November 24, news agency ANI reported. Janardhan Reddy was arrested by Bengaluru Central Crime Branch, in connection with Ambident Group alleged bribery case, earlier on Sunday.

Ballari mining baron Janardhan Reddy has been sent to judicial custody until November 24, news agency ANI reported. Janardhan Reddy was arrested by Bengaluru Central Crime Branch, in connection with Ambident Group alleged bribery case, earlier on Sunday. Additional CP Crime Branch, Alok Kumar, stated that the arrest has been made on the basis of "credible evidence and witnesses' statements". "We will produce him before the magistrate. We are going to recover the money and give it to the investors," Kumar added. The Central Crime Branch also arrested Ali Khan, Reddy's close aide. Janardhan Reddy who was arrested by Bengaluru Central Crime Branch, in connection with Ambident Group alleged bribery case has been sent to judicial custody till November 24. pic.twitter.com/YrIBxCQWfJ — ANI (@ANI) November 11, 2018 × Reddy was arrested in connection with the alleged Ambident ponzi scheme. Today Janardhan Reddy was produced before the Judge & the Court was pleased to accept our bail application on record. Judge has granted time till tomorrow to file objection on the main bail application & the application will be taken tomorrow: Janardhan Reddy's Lawyer. #Karnataka pic.twitter.com/MpKxUaJyQ2 — ANI (@ANI) November 11, 2018 × Syed Ahmed Fareed, the owner of Ambident, had claimed he had paid Rs 18 crore to be let off when the ponzi scheme came to light. Fareed said Reddy, who had been a minister in the then BS Yeddyurappa government, had asked for the money during a meeting at a hotel. Fareed said the money had been paid; that it had been routed to Reddy's aide. (With inputs from agencies)

Ponzi scheme case: Ballari mining baron Janardhan Reddy sent to judicial custody till November 24

Just a day after the Bharatiya Janata Party lost out its Bellary bastion to the Congress in the parliamentary bypoll, there came more bad news. Mining baron and former minister Gali Janardhana Reddy's name has surfaced in a Ponzi scam in Karnataka, amounting to a whopping Rs 600 crores.

While there is no evidence of Reddy being directly involved in the scam, preliminary investigations have indicated that Janardhana Reddy might have been given Rs 18 crores in gold by the owner of the fraudulent company, to influence the Enforcement Directorate probe into the scam.&nbsp;

What is the ponzi scheme all about?&nbsp;

Ambidant Marketing Private Ltd was started by Fareed and his son in December 2016. The chain-link investment fraud scheme by Ambidant promised 30-40% returns to its investors.

In order to build faith, the company initially delivered the returns that it promised. However, things started unravelling by April 2017, when investors in large numbers approached the Bengaluru city police and also staged protests.

The Central Crime Branch team headed by Alok Kumar, Additional Commissioner of Police that initiated investigations, found that nearly 15,000 investors were duped to the tune of Rs 600 crore.

In January this year, when the police team raided Ambidant, it found that Fareed had transferred as much as Rs 18 crore to one Ramesh Kothari, a jeweller from Bengaluru. This money was then converted to 57kgs of gold bullion and handed over to another jeweller by the name Ramesh in Ballari.

When Ramesh (Ballari) was questioned about the same, he told the police that the gold was handed over to Ali Khan, a close aide of Janardhana Reddy.&nbsp;

While Janardhana Reddy and Ali Khan remain inaccessible, CCB teams have raided the former minister's homes in Bengaluru and Ballari. At least four teams of the Central Crime Branch are on the lookout for Reddy and Khan, who have moved a Telangana court seeking anticipatory bail.

Reddy's troubled past&nbsp;

Gali Janardhana Reddy, once the invincible mining baron of iron-rich Bellary, was arrested in September 2011 for his involvement in the infamous mining scam of Karnataka. Reddy was then the Tourism, Youth and Infrastructure minister of Karnataka.

In an extensive report filed by the then Lokayukta Justice Santhosh Hegde, Reddy was accused of illegal mining, tampering with state borders and forest laws and also laundering money through international tax havens among other offences.

After three years in jail, Reddy was granted bail in January 2015 by the Supreme Court on the condition that he will not enter Ballari. Despite the restrictions, Reddy campaigned for several BJP candidates during the 2018 State Assembly elections.&nbsp;

In an exclusive conversation to WION, Former Lokayukta Justice Santosh Hegde, said that the latest development shows that Reddy was still wielding considerable influence, despite being out on bail.

"Whether he has done it or not he has given information to the other side he can control the ED and close the case for Rs 20 crore. It indicates that he's still powerful, isn't it? Obviously he has a clout through the administration and his words are still believed in the market. Certainly, I think it is a very good ground&nbsp;for cancellation of bail because one of the basic conditions is that you should not indulge in unlawful activities when you're on bail. I'm sure whoever is the concerned should file an application for cancellation of bail."&nbsp;says Justice Hegde.&nbsp;

Political implications of Reddy's troubles

Soon after the mining scam erupted under the BS Yeddyurappa administration in 2011, the Bharatiya Janata Party had distanced itself from Gali Janardhana Reddy. The sacking of Reddy brothers soon after the arrest, even led to their close aide B Sriramulu forming a separate political outfit.

The disintegration of the state BJP (Yeddyurappa forming KJP, Sriramulu forming BSR Congress) led to the terrible electoral failure of the party in 2013 assembly elections.&nbsp;

Having learnt its lessons, we could see more of the Reddy factor to 2018 Assembly elections. Though Supreme Court did not permit the mining baron to campaign in Ballari, he was seen actively partaking in processions in Chitradurga and Bengaluru.

In April, Reddy also shared the&nbsp;stage with BJP state president BS Yeddyurappa, Madhya Pradesh Chief Minister Shivraj Singh Chouhan and B Sriramulu. So what will the BJP do now, especially since its position has further been weakened in Ballari by the bypoll defeat?&nbsp;

"Janardhana Reddy was never in the forefront of BJP politics. He was always doing things from the back. He has always been frowned upon by the central leadership of the party. This gives an opportunity to the central leadership of the BJP to sideline the state leadership, as they have been waiting for an opportunity to do that. This allows the central leadership to micromanage the state in the BJP. It is difficult for them to replace Yeddyurappa at this stage, but in the next few months he will be sidelined and all critical decisions will happen from the national level", says Sandeep Shastri, Political Analyst. &nbsp;

The importance of Ballari &nbsp;

Ballari is a crucial constituency for the Bharati Janata Party as it formed the backbone of the state funding for electoral campaigns. The Reddy's once again getting into legal mess will only further force the central leadership to distance themselves from the powerful mining baron. The recent failure on part of the Reddy brothers to muster majority during floor test and the assembly elections have broken the cash-rich backbone.&nbsp;

In the past, 1999 had seen the district get national attention when Sonia Gandhi was pitted against Sushma Swaraj. Gandhi had won the election by a slender margin of 53,000. However, BJP won every consecutive election thereafter (until 2018), sealing the region as a saffron party bastion.

Just a day after the Bharatiya Janata Party lost out its Bellary bastion to the Congress in the parliamentary bypoll, there came more bad news. Mining baron and former minister Gali Janardhana Reddy's name has surfaced in a Ponzi scam in Karnataka, amounting to a whopping Rs 600 crores.

Just a day after the Bharatiya Janata Party lost out its Bellary bastion to the Congress in the parliamentary bypoll, there came more bad news. Mining baron and former minister Gali Janardhana Reddy's name has surfaced in a Ponzi scam in Karnataka, amounting to a whopping Rs 600 crores. While there is no evidence of Reddy being directly involved in the scam, preliminary investigations have indicated that Janardhana Reddy might have been given Rs 18 crores in gold by the owner of the fraudulent company, to influence the Enforcement Directorate probe into the scam. What is the ponzi scheme all about? Ambidant Marketing Private Ltd was started by Fareed and his son in December 2016. The chain-link investment fraud scheme by Ambidant promised 30-40% returns to its investors. In order to build faith, the company initially delivered the returns that it promised. However, things started unravelling by April 2017, when investors in large numbers approached the Bengaluru city police and also staged protests. The Central Crime Branch team headed by Alok Kumar, Additional Commissioner of Police that initiated investigations, found that nearly 15,000 investors were duped to the tune of Rs 600 crore. In January this year, when the police team raided Ambidant, it found that Fareed had transferred as much as Rs 18 crore to one Ramesh Kothari, a jeweller from Bengaluru. This money was then converted to 57kgs of gold bullion and handed over to another jeweller by the name Ramesh in Ballari. When Ramesh (Ballari) was questioned about the same, he told the police that the gold was handed over to Ali Khan, a close aide of Janardhana Reddy. While Janardhana Reddy and Ali Khan remain inaccessible, CCB teams have raided the former minister's homes in Bengaluru and Ballari. At least four teams of the Central Crime Branch are on the lookout for Reddy and Khan, who have moved a Telangana court seeking anticipatory bail. Reddy's troubled past Gali Janardhana Reddy, once the invincible mining baron of iron-rich Bellary, was arrested in September 2011 for his involvement in the infamous mining scam of Karnataka. Reddy was then the Tourism, Youth and Infrastructure minister of Karnataka. In an extensive report filed by the then Lokayukta Justice Santhosh Hegde, Reddy was accused of illegal mining, tampering with state borders and forest laws and also laundering money through international tax havens among other offences. After three years in jail, Reddy was granted bail in January 2015 by the Supreme Court on the condition that he will not enter Ballari. Despite the restrictions, Reddy campaigned for several BJP candidates during the 2018 State Assembly elections. In an exclusive conversation to WION, Former Lokayukta Justice Santosh Hegde, said that the latest development shows that Reddy was still wielding considerable influence, despite being out on bail. "Whether he has done it or not he has given information to the other side he can control the ED and close the case for Rs 20 crore. It indicates that he's still powerful, isn't it? Obviously he has a clout through the administration and his words are still believed in the market. Certainly, I think it is a very good ground for cancellation of bail because one of the basic conditions is that you should not indulge in unlawful activities when you're on bail. I'm sure whoever is the concerned should file an application for cancellation of bail." says Justice Hegde. Political implications of Reddy's troubles Soon after the mining scam erupted under the BS Yeddyurappa administration in 2011, the Bharatiya Janata Party had distanced itself from Gali Janardhana Reddy. The sacking of Reddy brothers soon after the arrest, even led to their close aide B Sriramulu forming a separate political outfit. The disintegration of the state BJP (Yeddyurappa forming KJP, Sriramulu forming BSR Congress) led to the terrible electoral failure of the party in 2013 assembly elections. Having learnt its lessons, we could see more of the Reddy factor to 2018 Assembly elections. Though Supreme Court did not permit the mining baron to campaign in Ballari, he was seen actively partaking in processions in Chitradurga and Bengaluru. In April, Reddy also shared the stage with BJP state president BS Yeddyurappa, Madhya Pradesh Chief Minister Shivraj Singh Chouhan and B Sriramulu. So what will the BJP do now, especially since its position has further been weakened in Ballari by the bypoll defeat? "Janardhana Reddy was never in the forefront of BJP politics. He was always doing things from the back. He has always been frowned upon by the central leadership of the party. This gives an opportunity to the central leadership of the BJP to sideline the state leadership, as they have been waiting for an opportunity to do that. This allows the central leadership to micromanage the state in the BJP. It is difficult for them to replace Yeddyurappa at this stage, but in the next few months he will be sidelined and all critical decisions will happen from the national level", says Sandeep Shastri, Political Analyst. The importance of Ballari Ballari is a crucial constituency for the Bharati Janata Party as it formed the backbone of the state funding for electoral campaigns. The Reddy's once again getting into legal mess will only further force the central leadership to distance themselves from the powerful mining baron. The recent failure on part of the Reddy brothers to muster majority during floor test and the assembly elections have broken the cash-rich backbone. In the past, 1999 had seen the district get national attention when Sonia Gandhi was pitted against Sushma Swaraj. Gandhi had won the election by a slender margin of 53,000. However, BJP won every consecutive election thereafter (until 2018), sealing the region as a saffron party bastion.

Karnataka Ponzi scam: Central Crime Branch sees 'Red'dy

The Enforcement Directorate(ED) today searched the premises of its ex-Deputy Director and others in connection with the money laundering probe in a Rs 600 crore alleged ponzi scam case.

The ED officials said the house of its former officer Gurnam Singh, advocate Puneet Sharma and an another person in Chandigarh and Mohali are being raided since Thursday morning, under provisions of the Prevention of the Money Laundering Act (PMLA).

Singh has been the investigating officer of the said Ponzi case and was relieved from the central probe agency by the Enforcement Directorate (ED) headquarter in Delhi last year in January.

Officials claimed that the ex-Deputy Director of the ED&#39;s Chandigarh zone was allegedly taking bribes, to the tune of about 4-6 crore, in purported connivance with Sharma in this case.

The raids have been launched to gather more evidence in this context, they said. ED Director Karnal Singh had issued stern directives in the agency that instances of corruption in the organisation will be prosecuted even if it is their own staffers.

The agency had conducted multiple searches in this case last year and it had also arrested the absconding agent of the alleged chit fund firm under scanner-- Kamal K Bakshi-- under the anti-money laundering law.

The case, the ED had said, pertains to thousands of investors who were &quot;systematically lured and cheated to the tune of more than Rs 600 crore by floating Ponzi or pyramid schemes assuring exorbitant returns&quot;.

It had said that the alleged &quot;mastermind&quot; of the scheme is a Malaysian identified as Mugundhan Gangam who floated two firms -- Ms Unipay 2U Marketing Private Limited and Unigateway2U Trading Private Limited -- in India.

Describing the modus operandi of the alleged cheating in this case, the agency said the early investors of the Ponzi schemes floated by the firm were paid exorbitant returns in order to win over their confidence.

&quot;When thousands of people across the country invested crores of rupees in the said Ponzi schemes, the companies stopped the payouts or monthly returns (since October, 2010) and gradually syphoned off crores of rupees of investors,&quot; it had said.

&quot;The company manipulated by using a web of bank accounts and layering of money through a plethora of such accounts,&quot; the ED alleged.

The agency had registered a criminal FIR in the case, based on an earlier complaint of other central investigative agencies.

The ED officials said the house of its former officer Gurnam Singh, advocate Puneet Sharma and an another person in Chandigarh and Mohali are being raided since morning.

The Enforcement Directorate(ED) today searched the premises of its ex-Deputy Director and others in connection with the money laundering probe in a Rs 600 crore alleged ponzi scam case. The ED officials said the house of its former officer Gurnam Singh, advocate Puneet Sharma and an another person in Chandigarh and Mohali are being raided since Thursday morning, under provisions of the Prevention of the Money Laundering Act (PMLA). Singh has been the investigating officer of the said Ponzi case and was relieved from the central probe agency by the Enforcement Directorate (ED) headquarter in Delhi last year in January. Officials claimed that the ex-Deputy Director of the ED's Chandigarh zone was allegedly taking bribes, to the tune of about 4-6 crore, in purported connivance with Sharma in this case. The raids have been launched to gather more evidence in this context, they said. ED Director Karnal Singh had issued stern directives in the agency that instances of corruption in the organisation will be prosecuted even if it is their own staffers. The agency had conducted multiple searches in this case last year and it had also arrested the absconding agent of the alleged chit fund firm under scanner-- Kamal K Bakshi-- under the anti-money laundering law. The case, the ED had said, pertains to thousands of investors who were "systematically lured and cheated to the tune of more than Rs 600 crore by floating Ponzi or pyramid schemes assuring exorbitant returns". It had said that the alleged "mastermind" of the scheme is a Malaysian identified as Mugundhan Gangam who floated two firms -- Ms Unipay 2U Marketing Private Limited and Unigateway2U Trading Private Limited -- in India. Describing the modus operandi of the alleged cheating in this case, the agency said the early investors of the Ponzi schemes floated by the firm were paid exorbitant returns in order to win over their confidence. "When thousands of people across the country invested crores of rupees in the said Ponzi schemes, the companies stopped the payouts or monthly returns (since October, 2010) and gradually syphoned off crores of rupees of investors," it had said. "The company manipulated by using a web of bank accounts and layering of money through a plethora of such accounts," the ED alleged. The agency had registered a criminal FIR in the case, based on an earlier complaint of other central investigative agencies.

Enforcement Directorate searches premises of ex-deputy director

Recently, 60 economists, including Abhijit Banerjee, Debraj Ray and Jean Dreze, wrote to Arun Jaitley, asking him to increase government spending on old age pensions and maternity entitlements.

&nbsp;

These economists have fallen prey to the fallacy of &ldquo;good intentions&rdquo;. The great economist Milton Friedman rightly said that it is a mistake to judge policies and programmes by their intentions rather than their results. The move advocated by these economists is intended to help pregnant women, newborn children and elderly people. It will end up hurting all three groups, and more.

&nbsp;

This is very counter-intuitive. After all, giving senior citizens or pregnant women more money should make them better off. But there is a concept in economics, called the Law of Unintended Consequences. Government meddles in the economy with the intention of solving a problem, but ends up making the problem worse or creating another problem.

&nbsp;

The US and European countries have large amounts of government spending on the kind of welfare schemes that our economists are requesting from Arun Jaitley. Let us see whether these schemes helped people in America and Europe or hurt them.

&nbsp;

&nbsp;Social Security

&nbsp;

In the US, people are forced to pay towards a government programme called Social Security. They pay a part of their salaries during their working years and receive a pension from the government when they retire. Similar schemes are found throughout Europe. This sounds very appealing, until one realises that these are just giant Ponzi schemes.

&nbsp;

Governments tax the current working population to pay pensions for the current ageing population. As long as there are fewer old people claiming pensions and lots of young people paying taxes, the scheme works wonderfully. When there are more old people claiming pensions and fewer and fewer young people paying taxes to fund those, the Ponzi scheme collapses. By 2090, the US government will be facing a $32 trillion shortfall in Social Security funding, which is almost twice the size of the US economy and little less than 10 times the tax revenue collected today.&nbsp;

&nbsp;

India might have a large (and growing) youth population now, but these youths will grow old. The birth rate will keep falling, as it has been for a long time. If the government starts paying pensions for everyone in India, we would face a similar economic disaster in the future, where too many old people will be claiming pensions, with too few young people paying taxes to fund them. Just look at what is happening in Europe.

&nbsp;

The Ponzi welfare state is the reason why Greece, Spain, Italy and other European governments are in such debt crises because they have predominantly aging populations and cannot extort sufficient taxes to fund their populist measures. To sustain their Ponzi schemes, European governments have had to provide financial incentives for people to have more children. This brings us to the next point.

&nbsp;

Maternity Benefits

&nbsp;

In the introduction to the letter, economist Jean Dreze wrote that the government should provide maternity benefits to all pregnant women, so they can have nutritious food and focus on raising children.&nbsp;

&nbsp;

Dreze wrote:

&ldquo;A fair amount of recent research in economics brings out the lifelong value of adequate care in early childhood. That, in turn, depends a great deal on mothers&#39; access to health, nutrition, rest, resources and power. This is the main reason why the National Food Security Act 2013 provides for maternity entitlements of Rs.6,000 per child for all pregnant women, except those already covered in the formal sector.&rdquo;

&nbsp;

Such assistance is also provided in the US. What were its effects?&nbsp;

It broke up the family structure. In 1960, 73% of children in the US lived in two-parent families, and only 5% were born out of wedlock. In 1964, the government launched a slew of welfare schemes, including assistance in obtaining food. Today, less than half of all children in the US live in intact families. African-Americans, who are mostly poor, have it worse. Nearly three-quarters of black children are raised by a single parent.

&nbsp;

The economics behind this is very simple. Because government subsidises child rearing in America, women don&rsquo;t wait to get jobs or marry someone who does, before having children. They have more children, and earlier, than they would have without government assistance.

&nbsp;

The real problem here is that women who can&rsquo;t even take care of themselves are given incentives to have children, whom they are not equipped to raise. Children raised in such troubled environments are more likely to turn to crime as they grow up.

&nbsp;

The Pradhan Mantri Matru Vandana Yojna (PMMVY), Narendra Modi&rsquo;s new maternity benefit scheme, is just another dirty populist measure. But it has a saving grace. It will give benefits only to the first child. Jean Dreze sees this as a bad thing. He believes that taxpayers should pay the expenses of any number of children a woman might choose to have, but can&rsquo;t afford to raise on her own. That would be even worse, since more children would be raised by parents who can&rsquo;t raise them properly.

&nbsp;

Experiences from the western world have clearly shown that while governments provided social security and maternity benefits with the best of intentions, they created far bigger problems in the process. The economists who have written to Arun Jaitley advocating similar policies would have been wise to look at the results of these policies, rather than their intentions.

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).

Experiences from the western world have clearly shown that while governments provided social security and maternity benefits with the best of intentions, they created far bigger problems in the process.

Recently, 60 economists, including Abhijit Banerjee, Debraj Ray and Jean Dreze, wrote to Arun Jaitley, asking him to increase government spending on old age pensions and maternity entitlements. These economists have fallen prey to the fallacy of “good intentions”. The great economist Milton Friedman rightly said that it is a mistake to judge policies and programmes by their intentions rather than their results. The move advocated by these economists is intended to help pregnant women, newborn children and elderly people. It will end up hurting all three groups, and more. This is very counter-intuitive. After all, giving senior citizens or pregnant women more money should make them better off. But there is a concept in economics, called the Law of Unintended Consequences. Government meddles in the economy with the intention of solving a problem, but ends up making the problem worse or creating another problem. The US and European countries have large amounts of government spending on the kind of welfare schemes that our economists are requesting from Arun Jaitley. Let us see whether these schemes helped people in America and Europe or hurt them. Social Security In the US, people are forced to pay towards a government programme called Social Security. They pay a part of their salaries during their working years and receive a pension from the government when they retire. Similar schemes are found throughout Europe. This sounds very appealing, until one realises that these are just giant Ponzi schemes. Governments tax the current working population to pay pensions for the current ageing population. As long as there are fewer old people claiming pensions and lots of young people paying taxes, the scheme works wonderfully. When there are more old people claiming pensions and fewer and fewer young people paying taxes to fund those, the Ponzi scheme collapses. By 2090, the US government will be facing a $32 trillion shortfall in Social Security funding, which is almost twice the size of the US economy and little less than 10 times the tax revenue collected today. India might have a large (and growing) youth population now, but these youths will grow old. The birth rate will keep falling, as it has been for a long time. If the government starts paying pensions for everyone in India, we would face a similar economic disaster in the future, where too many old people will be claiming pensions, with too few young people paying taxes to fund them. Just look at what is happening in Europe. The Ponzi welfare state is the reason why Greece, Spain, Italy and other European governments are in such debt crises because they have predominantly aging populations and cannot extort sufficient taxes to fund their populist measures. To sustain their Ponzi schemes, European governments have had to provide financial incentives for people to have more children. This brings us to the next point. Maternity Benefits In the introduction to the letter, economist Jean Dreze wrote that the government should provide maternity benefits to all pregnant women, so they can have nutritious food and focus on raising children. Dreze wrote: “A fair amount of recent research in economics brings out the lifelong value of adequate care in early childhood. That, in turn, depends a great deal on mothers' access to health, nutrition, rest, resources and power. This is the main reason why the National Food Security Act 2013 provides for maternity entitlements of Rs.6,000 per child for all pregnant women, except those already covered in the formal sector.” Such assistance is also provided in the US. What were its effects? It broke up the family structure. In 1960, 73% of children in the US lived in two-parent families, and only 5% were born out of wedlock. In 1964, the government launched a slew of welfare schemes, including assistance in obtaining food. Today, less than half of all children in the US live in intact families. African-Americans, who are mostly poor, have it worse. Nearly three-quarters of black children are raised by a single parent. The economics behind this is very simple. Because government subsidises child rearing in America, women don’t wait to get jobs or marry someone who does, before having children. They have more children, and earlier, than they would have without government assistance. The real problem here is that women who can’t even take care of themselves are given incentives to have children, whom they are not equipped to raise. Children raised in such troubled environments are more likely to turn to crime as they grow up. The Pradhan Mantri Matru Vandana Yojna (PMMVY), Narendra Modi’s new maternity benefit scheme, is just another dirty populist measure. But it has a saving grace. It will give benefits only to the first child. Jean Dreze sees this as a bad thing. He believes that taxpayers should pay the expenses of any number of children a woman might choose to have, but can’t afford to raise on her own. That would be even worse, since more children would be raised by parents who can’t raise them properly. Experiences from the western world have clearly shown that while governments provided social security and maternity benefits with the best of intentions, they created far bigger problems in the process. The economists who have written to Arun Jaitley advocating similar policies would have been wise to look at the results of these policies, rather than their intentions. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).

Opinion: Maternity benefits and pension, are these good for us?

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