The Enforcement Directorate (ED) on Wednesday summoned South Indian actor Prakash Raj for questioning in connection with a ponzi scheme investigation. The actor is the brand ambassador of the jewellery firm Pranav Jewellers, which is being probed for allegedly running a ponzi scheme.
The ED had earlier conducted raids at the premises of Pranav Jewellers in Chennai and Tiruchirappalli and seized cash and gold worth over Rs 23 lakh. The agency has alleged that the firm was collecting money from investors by promising high returns and then diverting the funds to other purposes.
Prakash Raj is being summoned to ascertain his role in the scheme and whether he was aware of the fraudulent activities of the firm. The actor has been asked to appear before the ED on December 5.
What is a Ponzi Scheme:
A Ponzi scheme is a fraudulent investment operation where the operator pays returns to investors from their own money or from money paid by subsequent investors, rather than from profit earned through legitimate investment activities. Ponzi schemes are unsustainable and eventually collapse when the operator is unable to attract new investors or when a large number of investors demand to cash out their investments.
How to Spot a Ponzi Scheme:
There are a number of red flags that can help you spot a Ponzi scheme. These include:
- High returns with little or no risk.
- Complex or opaque investment structures.
- Difficulty withdrawing your money.
- Pressure to recruit new investors.
- Lack of transparency and accountability.
What to Do If You Think You've Been a Victim of a Ponzi Scheme:
If you think you may have been a victim of a Ponzi scheme, there are a few things you can do:
- Contact your local securities regulator.
- Report the scheme to the authorities.
- Gather as much evidence as possible, including investment documents and bank statements.
- Seek legal advice.
[image credits : opindia]
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