Why are the middlemen getting away?

Recently, I saw a shocking video in which a Mumbai-based marketing person sells his scheme to a crowd of agents and prospective investors. What he said gave me a fresh perspective into the entire investment schemes business. He said, "Till a few years ago, whenever such schemes were floated, people used to check who the promoter is, what does the company do, etc. Aaj kal public sudhar gaya. Public poochhta hai kitna mahina chalega? (People are more aware. They ask how many months the scheme will run?)"

"Kam se kam chhe mahine chalega (At least six months)."

"Teen mahine chala toh kaafi hain (Enough if it runs for three months)."

In many of these investment schemes, which operate on the multi-level format, the investor himself is an agent. The idea is to bring in as many new people as possible, recover your money, and some return if possible, and exit before the scheme shuts shop. The earlier you enter, the better. Thus, a good number clearly know the mechanics of these schemes and enter willingly. The newcomer is often the one who carries the can. And, when the next scheme launches, the newcomer, now enlightened, jumps in with a vengeance to bring in new fools.

It is very clear that there are a set of network marketers based in Mumbai and many of the Ponzi centres. Though they often position themselves as agents and marketing personnel, they are the real brains behind a number of such illegal investment schemes.

They plan the marketing campaign of these schemes and execute these through the networks they have built over the years. They all are well aware that it is a Ponzi scheme and will implode one day and are in a hurry to get in, ride the initial spurt and get out. The promoters and official owners of the companies are often just masks over the faces of these crocodiles. When one mask becomes useless, they throw it off and get a new one. I also suspect these middlemen even facilitate the shutting down by filing complaints and engineering runs on a particular scheme.

Sudipta Sen also names two such "money-market" experts who had assisted him in floating and spreading Saradha across Bengal and Odisha. Regulators and policy makers in the area have to attack these middlemen. They often get away pointing fingers at the ignorance of the investors and cunning of the promoters. Their crocodile tears should not be taken at face value.

It appears to me that the agents and other people in the middle are the real kingpins of the Ponzi business. They take the fattest cut, too. Regulators have stayed away from touching any of these middlemen, probably put off by the sheer numbers. Local police also often take them to be victims.

They are not, by any stretch of imagination. If not for anything else, the middlemen have to pay a price for selling an illegal product. In fact, police should look for and hunt down the marketing personnel and speakers who are selling these schemes in seminars and other fancy events organised all over the country. They need to be taught the meaning of the word "accountability".