PONZI SCHEME
The Banning of Unregulated Deposit Schemes Bill, 2019 was introduced in Lok Sabha by the Minister of Finance, Ms Nirmala Sitharaman, in July 19, 2019. The Bill provides for a mechanism to ban unregulated deposit schemes and protect the interests of depositors. It also seeks to amend three laws, i.e., the Reserve Bank of India Act, 1934, the Securities and Exchange Board of India Act, 1992 and the Multi-State Co-operative Societies Act, 2002.
- A ponzi scheme is an investment scam that promises high returns with low risk to lure investors
- People running illicit deposit taking schemes can face jail term as well as stiff penalty
The Bill was passed by Lok Sabha and Rajya Sabha.
BACKGROUND OF NEWS REPORTED
Hemant Kumar Sinha was arrested on June 19, 2021, from Howrah and later produced before a special Prevention of Money Laundering Act (PMLA) court in Jharkhand’s capital Ranchi that sent him to judicial custody till June 29, 202. Hemant is accused in a case against M.S.S. Ayurvedic Healthcare Trust and others, registered on the basis of the FIRs instituted by the Jharkhand police. The accused persons collected ₹3,000 from each individual investor on the false promise of returning four times the amount within three months. They would issue four post-dated cheques of ₹2,300 each and four coupons worth ₹700 each for “Ayurvedic” medicines and treatment at M.S.S & Health Care Ayurvedic Trust to gain the investors’ confidence.
The ED had attached assets worth ₹2.28 crore in the case. Among those charge-sheeted in the case are Rakesh and Mukesh Kumar Poddar, who was arrested in June last year from their hideouts in Varanasi and Muzaffarpur. The probe found that “proceeds of crime” of Rs 10 crore was “siphoned off” by the trust. An amount of Rs 2.28 crore that was kept in bank accounts was also attached by the ED in the past during this investigation, it said.
