News of people losing their money in fraudulent deposit schemes comes with disconcerting regularity. Saradha, Rose Valley, PACL, etc are scams in which thousands of investors have lost their lives’ savings. Another that came to light recently was a deposit scheme run by Bengaluru-based I Monetary Advisory (IMA).
The making of a Ponzi scheme
Ponzi schemes, such as those run by IMA (and some time earlier, by Hyderabad-based Heera Group) are becoming more sophisticated. These groups had some initial capital and hence set up several businesses. IMA had jewellery stores, a real estate company and a pharmacy business. It had several large office buildings within Bengaluru. People came to perceive the group as one running legitimate businesses. When it