City becoming capital of financial frauds

Despite apparently unbelievable claim made by Wasankar and others, why do so many people invest their money in such schemes ?

By Dheeraj Fartode

Nagpur is fast becoming a hub for floating fraudulent financial schemes and swindlers who dupe gullible investors and then simply vanish into thin air leaving thousands of people in a lurch. More importantly, even if the promoters of such schemes are arrested, the money is never recovered as this financial wizards always create third party interests over all the movable and immovable properties owned by them. Mostly the properties are sold to investors themselves and like notorious Zambre couple, same property was sold to many people leading to a bitter legal dispute among themselves. 

From last one decade, Pramod Agrawal of Mahadeo Land Developers, Jayant and Varsha Zambre of J S Financial Services, Sameer Joshi of Shree Surya, Raviraj group and now Wasankar Wealth Management Group, the script is more or less same. Lure of high returns, flashy promotions, impressing initial investors by showering them with gifts and promised returns, the script is more or less same in every case.  In every case, hundreds of crores have been swallowed by scamsters without leaving any money trail. 

Despite apparently unbelievable claim made by Wasankar and others, why do so many people invest their money in such schemes ? According to experts, the smooth operations by such financial wizkids rarely evoke suspicion as they are able to market their schemes so effectively and infact honour the commitment during initial phase. The beneficiaries become brand ambassadors and often promote such schemes and person within his family and friends. This effective publicity and seemingly legitimate nature of the operations then create a mass hysteria and people repose faith in these investment Guru’s hoping that he will deliver and multiply their money in record time. 

Lethargy of investigating machinery and regulatory bodies to crack the whip before things go out of hands, is another reason, as to why such schemes run for fairly long period. A basic check about valid permissions from the SEBI or RBI to collect money or invest in stock market, could have prevented most of the scams right in the initial phase. But lure of fast money, financial illiteracy and apathy by regulators also helped the scamsters in amassing huge money and once the bubble pricked, the whole thing came crashing down. 

Though Wasankar Group was in news for all the wrong reasons since last few months and it came to fore that even basic statutory norms are being brazenly violated, the regulating agencies did precious little, giving lot of chance to the group to either park the collected money or tweak the documents to dilute their liability. 

The track-record of authorities in auctioning the properties of scamsters is quite dismal. Under MPID the properties can be swiftly attached, trial can be conducted in special MPID court and ill-gotten money transferred to any third party can also be recovered. But very often, the fraudsters are able to stall the proceedings due to very complex nature of operations. After some time, the scamsters walk out of jail and resume their fraudulent activities by floating another company and yet another guaranteed high return in very short span type scheme to attract innocent investors.