BRING FRAUDSTERS TO JUSTICE

BRING FRAUDSTERS TO JUSTICE

By Murari Sharma

Hopefully I am not the only one who is shocked by the street protests staged by the promoters and members of the Unity pyramid scam demanding that the government allow Unity businesses to carry on — a clear case of a thief raising the loudest voice.

This speaks volumes about the ethical decay and moral bankruptcy in which our society has fallen into. The next thing could be rallies in support of pickpockets, thieves, robbers, and rapists demanding that they too be allowed to carry on with their crimes. Some might very well say, swindling people and picking people’s pockets, stealing wallets, robbing homes and raping women are not the same. You bet. But they are all horrible crimes and the government must not condone them.

Pyramid schemes – also known as Ponzi schemes — are nothing new. They have been around in an organized way at least for over a century. Most of these schemes work in the shadowy world of secrecy and greed and their operators are seldom caught. When they fall into the net, they pay a stiff price for their crime in wealthy countries.

There is no morally acceptable defense for pyramid schemes. The whole motive behind these schemes is to rob people of their money to enrich their bosses.  Others down the line, lured by greed and quick profit, join the bosses as smaller shareholders in the crime. Those who have defrauded people’s money should be brought to justice, as the United States has. Let me cite two examples.

Charles Ponzi (1882-1849), an Italian national, after whom Ponzi schemes are named, was one of the most notorious pyramid swindlers the world has ever known. Based in Massachusetts, Ponzi stole millions of dollars in the United States through his sham company -– Old Colony Foreign Exchange Company — promising to give investors 50 percent profit in 90 days. He rose from poverty to luxury quickly and, when he was caught, fell into penury and a series of long jail terms.

Bernie Madoff, an American stockbroker, too made headlines with his investment fraud. He made nearly one billion US dollars within a span of 10 years through his Ponzi scheme and has, after he was caught in 2008, been sentenced to 150 years – long 150 years — in prison for his crime. The prison sentence for Madoff makes it clear how seriously this crime is treated in the United States.

In Ponzi schemes, those at the top make tons of fraudulent money very quickly. But those at the bottom lose everything they contribute because all their money ends up in the pockets of higher ups in the pyramid as commission. What is amazing about these schemes is that even smart people fall prey due to their greed for easy and fast buck.

In the pre-Internet era, pyramid fraudsters used to rob their relatives and friends by convincing them one-to-one to buy into Ponzi schemes and expanded their circle from there. But now the Internet has infinitely widened the scope to reach out to millions of unsuspecting people with a click of a button and lure them into the trap by promising the sky. This electronic medium has also made it much more difficult to track the trail to pyramid bosses and bring them to justice. Thankfully the Unity and similar other schemes in Nepal are yet to go very high-tech and become immeasurably complex due to limited connectivity.

Unity promoters — Kashi Gurung and others — have stolen more than 6-9 billion rupees from the poor and not so poor Nepalis at home and abroad. After the government announced action, several Unity businesses have been shuttered and several of its officials have been arrested. However, Gurung and a few at the top remain at large. Reportedly, the same Kashi Gurung had robbed hundreds of thousands of people under a different Ponzi scheme in the past, but he was never arrested, charged or punished for his crime.

Without an iota of doubt, what Unity has done is outright and blatant fraud. It is a matter of national shame that, while fraudsters like Ponzi and Madoff were treated as criminals and faced long imprisonments, their counterparts in Nepal were hobnobbing with the country’s president, prime minister, the main opposition leader, and other big shots. They were promoting their illegal business with the support of Nepali leaders and diplomats. Even now they seem to be trying to pull the political strings to escape arrest and to avoid the closure of their businesses.

But Unity is not the only Ponzi scheme fleecing Nepali people of their scarce money. Newspapers have reported that there are half a dozen similar schemes afloat. Unfortunately I am yet to hear anything about the government taking action against other schemes and their bosses. Promoters of such scams should not be sitting in the living rooms of our political leaders, administrators and diplomats; neither should they be permitted to continue enjoying the luxuries they procured from their ill-gotten money.

The government should send these fraudsters to where they rightly belong -– dark rooms of high security jails for life.

As citizens, we too have civic responsibility and duty to act more responsibly for our protection. If we know of any scheme that is yet to come out, we should bring them from the shadow and press the government to take action against all such scams. At the same time, we should not fall prey to the glib talk and tall promises of cheats and swindlers. If something looks too good to be true, then most likely it is not.

What is more, we must not let the bosses of the Unity and other Ponzi schemes fool us into believing that we must defend their illegal activities to safeguard our interest. To do so will be tantamount to calling on the government to let such fraudsters continue robbing more people. Supporting these criminals will be a moral outrage akin to lending a helping hand to thieves, robbers and rapists to rob us and to violate the dignity of our mothers and sisters.

London

May 26, 2010

(Published in Republica of June 6, 2010)


 

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