Ponzi scheme is a type of money laundering where perpetrators channel the money of the newer clients and pay outstanding interest to the old. It was named after an Italian man named Charles Ponzi who used this scheme to swindle money from a lot of people. This type of scheme was prevalent and gaining momentum in Nepal, through business such as Gold Quest and Unity Life International. "Nepali government has finally imposed a ban on network marketing business, ending a long-running marketing scam of Unity Life International (ULI) that cheated hundreds of thousands of Nepalis for years. (Online, 2010)” These type of scheme lure unsuspecting investors with the greed of huge profit within a small time frame but what they are actually doing is paying them off with the cash inflow of newer clients that the older ones themselves have convinced to join. These are usually family/relative members and friends who loose at the end.
Nepalies have lost a lot under this scheme. The one who go into the business profited but the latter ones lost to this miserably. "Over the past four years ago, the government had banned Multi-Level-Marketing companies selling goods on the basis of pyramid networks after the multi-billion scam and millions of Nepalis have been cheated by multi-level-marketing companies. (Nhisutu, 2017)”
It is only right that these perpetrators have financial obligation to the investors. According to the national daily paper, The Himalayan Times, "Patan High Court has acquitted 12 people including seven board members of Unity Life International who had been convicted by Lalitpur District Court in a fraud case. The lower court had imposed a fine of Rs 1.6 crores on each of the defendants. (Service, 2017)” The convicted people of the United Life International have been fined by the court.
A law has been passed in Nepal mandating that the network business or Ponzi Scheme to be illegal. IF found to be using this scheme the it will be deemed illegal and prosecuted by law to the highest degree. "Crackdown on ULI was launched after the Supreme Court observed on May 23, 2010, that banking, insurance and cooperative businesses carried out by the controversial ULI were illegal. Following the court order, an arrest warrant was issued against ULI promoters and others associated with them. (SERVICE, 2015)”
References
Nhisutu, R. (2017, August 17). Networking Business ‘DIRECT SALES’ Bill passed in Nepal . Retrieved from Linkedin: linkedin.com/pulse/networking-busi...
Ponzi scheme is a type of money laundering where perpetrators channel the money of the newer clients and pay outstanding interest to the old. It was named after an Italian man named Charles Ponzi who used this scheme to swindle money from a lot of people. This type of scheme was prevalent and gaining momentum in Nepal, through business such as Gold Quest and Unity Life International. "Nepali government has finally imposed a ban on network marketing business, ending a long-running marketing scam of Unity Life International (ULI) that cheated hundreds of thousands of Nepalis for years. (Online, 2010)” These type of scheme lure unsuspecting investors with the greed of huge profit within a small time frame but what they are actually doing is paying them off with the cash inflow of newer clients that the older ones themselves have convinced to join. These are usually family/relative members and friends who loose at the end.
Nepalies have lost a lot under this scheme. The one who go into the business profited but the latter ones lost to this miserably. "Over the past four years ago, the government had banned Multi-Level-Marketing companies selling goods on the basis of pyramid networks after the multi-billion scam and millions of Nepalis have been cheated by multi-level-marketing companies. (Nhisutu, 2017)”
It is only right that these perpetrators have financial obligation to the investors. According to the national daily paper, The Himalayan Times, "Patan High Court has acquitted 12 people including seven board members of Unity Life International who had been convicted by Lalitpur District Court in a fraud case. The lower court had imposed a fine of Rs 1.6 crores on each of the defendants. (Service, 2017)” The convicted people of the United Life International have been fined by the court.
A law has been passed in Nepal mandating that the network business or Ponzi Scheme to be illegal. IF found to be using this scheme the it will be deemed illegal and prosecuted by law to the highest degree. "Crackdown on ULI was launched after the Supreme Court observed on May 23, 2010, that banking, insurance and cooperative businesses carried out by the controversial ULI were illegal. Following the court order, an arrest warrant was issued against ULI promoters and others associated with them. (SERVICE, 2015)”
References
Nhisutu, R. (2017, August 17). Networking Business ‘DIRECT SALES’ Bill passed in Nepal . Retrieved from Linkedin: linkedin.com/pulse/networking-busi...
Online, P. D. (2010, May 24). Nepali gov’t bans pyramid-style business. Peoples Daily Online . Retrieved from en.people.cn/90001/90778/90858/908...
SERVICE, H. N. (2015, August 1). Unity Life International MD, director nabbed. The Himalayan Times .
Service, H. N. (2017, November 18). 12 convicts in Unity scam case acquitted. The Himalayan Times .