by Dr GIRISH BHASKAR
kaumudiSingapore.com
Bernard Madoff was not a household name until his arrest by police in Canada in connection with a massive investor fraud case. Later Madoff was rearrested in New York when his two sons reported his fraudulent investment methods to the police. After preliminary investigation, authorities have concluded investors lost about $50 billion. As the details of the fraud became known hundreds of investors were bilked by Madoff whom they trusted as Uncle Bernie. He is charged with one count of securities fraud.
Madoff ran a giant Ponzi scheme which lasted more than two decades. Ponzi scheme is nothing new to Americans. Ponzi is an Italian who first devised the scheme. In a ponzi scheme returns for the existing investors are paid by new investors like robbing Peter to pay Paul. Madoff was able to consistently generate 12 to 14 % returns year after year on the investment. As the word passed around about Madoff’s financial genius, more and more investors vied to participate in his “safe” investment. Madoff created an aura of invincibility around him. Madoff carefully chose his clients. He would reject potential investors without assigning any reason.
How Madoff was able to pull off such a huge fraud without eliciting suspicion from his faithful clients for many years has befuddled the investors. Madoff was a reserved and elusive person. Brought up in Queens, New York, Madoff did not finish law school. He made his fortune as a stock trader in the early seventies. Whenever an investor suspected Madoff operation could be a Ponzi scheme, he would return the money as soon as requested. What is remarkable is the investigative agency Security and Exchange Commission had looked into his books over the years and found nothing unusual. Madoff was one step ahead of the sleuths.
The investor community had nothing to worry about the Madoff investment strategy. His credentials were impeccable. Madoff was the Chairman of the famous NASDAQ stock exchange in 1990, 91 and 93 and held a seat on a government advisory panel on stock market regulations. He cultivated a large circle of wealthy friends through his business and country club affiliations. Those who were wealthy knew who Madoff was. His clients included rich individuals, small investors (minimum required was $100,000), Yeshiva University, New York Law School, International Olympic Committee, Tufts University and many Jewish charities.
A disproportionate number of Madoff clients turned out to be from the Jewish community. Well known names like movie director Stephen Spielberg, Frank Lautenberg and Elie Wiesel have lost heavily. So many Jewish charities which helped wide ranging causes have lost most of the money invested. Many organization throughout the country depended on the annual donations from these Jewish charities. Some had to close down. Then there were individual investors who put in from half a million to 5 million dollars with Madoff. The last group has lost all their hard earned money and retirement savings and now faces the prospects of starting all over again.
Madoff’s financial operations were not limited to the United States of America. Banks in U.K, France, Spain, Switzerland, Italy, Austria, Japan and Singapore were affected. French financier Villehuchet, 65 years old, committed suicide in New York on Dec 3rd. His firm Access International Advisors had lost 1.5 billion dollars. Some will go into depression while others will have sleepless nights and nightmares. All the Madoff investors will need psychiatric counseling to help them cope with the financial crisis. Some people were wise enough not to invest all their savings with Madoff. They are the only winners in this unfolding tragic saga.
Ultimately Madoff’s Ponzi scheme went undetected because of the human tendency to trust a fellow human being. That trust will be further secured when all the people in the group belongs to the same community. The Jewish community is a close knit group. A fellow Jew can well relate to their common ethos. It is that basic trust that Madoff violated and betrayed. Herein lies a cautionary tale of unpredictability in human nature.
If an investment appears too good to be true, it probably is. Return on investment of 12% year after year even in a bear market should raise suspicion. The adage “Do not invest all your eggs in one bssket “especially if you have no other source of income holds true. Retirement savings should always be invested in stable funds. Those who depend on financial planners should know their credentials and investment strategy. In the Madoff case some investors got sucked in, even though their money was placed in other reputable funds. This was done without the investor’s knowledge. As long as there is money to be invested, there will be a crook somewhere waiting to bilk the client. As long as the lure for money remains a flaw in human character, one has to be cognizant of the potential fraud. Often it is the greed and trust that pave the way for fraudulent activities. Treat money always with respect and prudence.
Showing posts with label Fraud. Show all posts
Showing posts with label Fraud. Show all posts
28 December, 2008
17 June, 2008
Why do we become slaves to god-men?
I first saw Nataraja Guru in my childhood. After earning a Ph.D from the Sorbonne, he was working as the headmaster of a high school at Nedunganda, near Varkala, at the time. He had not taken to sanyasa. Many years later I met him for the last time at New Delhi when he arrived there on his way back to Kerala from a European tour. That was when I saw him in saffron clothes for the first time. When I mentioned this, he said, “Had to do it.” I was eager to know what prompted him to make that remark. Even before I could ask, he explained the circumstances in which he started wearing saffron clothes. To maintain the ownership to the Gurukul’s property it was necessary to establish that he had given up worldly life and become a sanyasin. Courts have made observations on how to decide whether or not one was a sanyasin. One of them was that the sanyasin was a habitual wearer of saffron.
Nataraja Guru said Sree Narayana Guru, who used to wear white clothes, switched to saffron in his last days to come within the judicial definition of sanyasin. He was in possession of much property donated by devotees. As such, the switch to saffron was good precaution. He also left a will making it clear that ownership of all the property would vest in the Sree Narayana Dharma Sangham. That, however, did not prevent the Sree Narayana Dharma Paripalana Yogam, which, too, was founded by him, from raising a dispute in court. Biographers have recorded that the Maharaja of Travancore, recognizing the Guru’s spiritual attainments, issued a proclamation exempting him from having to appear in court. But the institutions he created are constantly involved in litigation. The affairs of the Dharma Sangham are now under the Supreme Court’s observation.
Sree Narayana Guru and Nataraja Guru took the sanyasin’s robes to prevent alienation of property gifted to them as spiritual leaders. Those who occupy media space today put on the sanyasin’s robes to amass wealth. The game was exposed when Kerala Sabdam weekly reported that Santosh Madhavan, wanted by Interpol in connection with a case of fraud in the United Arab Emirates was living as a sanyasin in Kerala. Television channels, following up the report that Santosh Madhavan, who had cheated a Dubai business woman of AED 400,000, was masquerading as Amrita Chaitanya, confused him with another Santosh Madhavan, wanted by the Central Bureau of Investigation in connection with a case of arms smuggling. In a bid to take advantage of the confusion, Amrit Chaitanya appeared before TV cameras at a secret location and declared that he was not the one the police were looking for in the arms smuggling case. He also claimed there was no case pending against him anywhere. He even appeared personally before a high-ranking police officer to give his side of the story. The TV appearance had a contrary effect. The Dubai-based Malayali asserted that the man in the TV visuals was the one who had cheated her.
Fake sanyasins need to be exposed. Such exposure must be welcomed, regardless of who does it. But the hunt of sanyasins going on in Kerala now cannot be seen in that light. For, those who are pursuing fake sanyasins are fake hunters. A close scrutiny will reveal that there are political motives behind the hunt.
As Amrita Chaitanya attracted the charge of rape of minor girls, apart from financial irregularities, doubts arose about the conduct of the police, which had let him go without even questioning. A Bharatiya Janata Party leader alleged that Amrita Chaitanya had links with Home Minister Kodiyeri Balakrishnan’s son, who is in a Gulf country. When Bhadran alias Himaval Bhadrananda, sitting in a police station, holding a gun to his forehead, waxed eloquent about ‘Balettan’, both the police and the minister invited ridicule. The minister’s son threatened to take legal action against the BJP leader for levelling charges against him without adducing any evidence. The minister himself asked media persons helplessly what he could do if someone called him brother. It was after these incidents showed up the establishment in a bad light the police and the Democratic Youth Federation of India launched the hunt for fake saints. The Home Minister said action would be taken against those who took the law into their own hands but nothing was done in this respect. The Chief Minister said DYFI need not do the job of the police. DYFI is under the control of the CPI (M). In the party, the decisive voice is the secretary’s, not the Chief Minister’s. The party secretary did not utter a word which gave any hint of displeasure at the DYFI action.
The CPI (M) was not alone in acting with political motives. The sanyasins are a group on which the BJP has relied since long to carry forward its Hindutva agenda. As the police and CPI (M) youths started exposing fake sanyasins, the BJP mounted resistance. As part of the effort, its youth wing, the Bharatiya Yuva Morcha, started looking for fake elements in the Christian and Muslim communities. Although this raised the possibility of communal polarization, no such thing happened. The CPI (M) added non-Hindu frauds to its hit list and the BJP added sanyasins with Marxist links to its. The Youth Congress, too, organized demonstrations against pro-Marxist frauds. When Aryadan Shaukat proposed the name of the Thangal of Panakkad for inclusion in the list of dubious saints, the Chief Minister seconded it. But the party secretary did not take it up. Youth brigades of all parties joined the hunt for sanyasins, but the police vent its spleen more on Youth Congress men than on the rest, betraying political bias. By providing a common ground to both the factions in the party, the hunt boosted the efforts to contain sectarianism in the CPI (M).
In the modern period, Kerala has produced several spiritual leaders like Vidyadhiraja Chattampi Swamikal, Sree Narayana Guru, Nataraja Guru, Nityachaitanya Yati and Swami Ranganathananda. What drew people towards them were their scholarship, simple lifestyle and keen interest in the welfare of the society. Many great saints had invited scorn early in their lives. Eventually they gained recognition by leading exemplary lives and rendering selfless service. The lifestyles of most of the people make it clear that they are a different breed.
The entry of fake saints must be viewed in the context of the changes that have taken place in the thinking of the society. Fifty or one hundred years ago, money was not widely recognized as a measure of success in life. The belief that even if one made money through shameful ways the money will wipe out the shame had not yet gained ground. Teachers could teach children lines like “Why do you need money if you have skills? Why keep ghee also when there is butter?” with full faith. And the students could imbibe the lesson without difficulty. You will have to give the term ‘skills’ a different meaning from what the poet meant to persuade today’s kids to accept those lines.
Ours is a society full of people seeking means to make quick money. Those who feel confident in their studies fulfil their hopes by becoming engineers and doctors. Parents who have the money translate their dreams into reality by buying not only college seats but, possibly, also degrees and jobs for their children. For a long time, the school system has been allowing students to go unhindered till the 10th standard. After that came the big examination in which nearly half the students, numbering about 250,000, were eliminated. After ten years of schooling, many of them were unfit to do manual labour. Education had alienated them from physical work, but it had not qualified them for white-collar jobs. When the education reforms now under way are completed, students will be able to go up to the 12th standard without hindrance. They may be able to avoid failure in the examination even at that point. There is, however, no reason to believe that those who pass Class XII under the new system will have a better future than those who failed Class X under the old system.
The government, the media and the youth organizations who are engaged in the hunt for fake sanyasins have provided little information about the social and educational background of those whom they have uncovered. It should cause no surprise if a scrutiny reveals that most of them are victims of the education system. How long did they study? Did they pass? Or did they fail? These are not really relevant questions. The only relevant question is: did education equip them to make an honest living? Sanyasa is but one of several areas where youths cheated by the education system find work that does not demand hard labour. They sneak into other fields too -- from gangs to politics.
Today Kerala offers tremendous scope for spiritual trade. Temples, which only people from the immediate neighbourhood visited 50 years ago, are now attracting devotees from far and wide. Family shrines have grown into regional institutions, and regional institutions have grown into national institutions. Churches and mosques have grown in numbers and as swell as size. According to Dr James Vadakkumchery, who was criminologist in the police department, there are fewer than 100 fake sanyasins in the State. Considering the possibilities of the market, this cannot be considered a large number.
Just as there are good people and bad people among sanyasins, there are good people and bad people among those who fall in their net. Those looking for solace belong to the former category. Those seeking material gains belong to the latter category. As life’s struggle intensifies, the number of people needing solace goes up. Not only losers in the struggle, but even those who succeed often come under severe stress. A good proportion of those who seek the help psychiatrists are family members of emigrants to the Gulf States.
If those who are looking for short-cuts end up in the company of fake sanyasins, it can be seen as a natural process like birds of the same feather flocking together. It is not easy to prevent that. The law has to take care of such people. But civil society must consider how it can prevent good people from falling into the hands of fake sanyasins. By raising a simple question, one can easily identify the fake ones: why do sanyasins need women and money? If there is a mechanism to take care of the needs of those wanting solace in a scientific manner and public comes to place trust in it, we may be able to prevent people from going to fake sanyasins.
An editorial which a CPI (M) publication carried under the heading “False sanyasins and false gods” brings to mind the figure of an ostrich standing with its head firmly planted in the sand. It says, “New god-men and goddesses are being born daily in the laze and inertia of progressive Kerala. The social mind alienated from political and cultural awareness is the most convenient place where gods can rest.” Who led Kerala into a state of laziness and inertia? How did Kerala’s social mind which unfailingly puts the CPI (M) in power in every alternate election get alienated from political and cultural awareness? There can be only one answer to these questions: as the political gods and prophets in whom they reposed faith are failing, the people are turning to the old gods again. Their minds are now so conditioned that they are ready to accept even false gods and prophets.
Based on article published by Mathrubhumi weekly in edition dated June 15, 2008
Nataraja Guru said Sree Narayana Guru, who used to wear white clothes, switched to saffron in his last days to come within the judicial definition of sanyasin. He was in possession of much property donated by devotees. As such, the switch to saffron was good precaution. He also left a will making it clear that ownership of all the property would vest in the Sree Narayana Dharma Sangham. That, however, did not prevent the Sree Narayana Dharma Paripalana Yogam, which, too, was founded by him, from raising a dispute in court. Biographers have recorded that the Maharaja of Travancore, recognizing the Guru’s spiritual attainments, issued a proclamation exempting him from having to appear in court. But the institutions he created are constantly involved in litigation. The affairs of the Dharma Sangham are now under the Supreme Court’s observation.
Sree Narayana Guru and Nataraja Guru took the sanyasin’s robes to prevent alienation of property gifted to them as spiritual leaders. Those who occupy media space today put on the sanyasin’s robes to amass wealth. The game was exposed when Kerala Sabdam weekly reported that Santosh Madhavan, wanted by Interpol in connection with a case of fraud in the United Arab Emirates was living as a sanyasin in Kerala. Television channels, following up the report that Santosh Madhavan, who had cheated a Dubai business woman of AED 400,000, was masquerading as Amrita Chaitanya, confused him with another Santosh Madhavan, wanted by the Central Bureau of Investigation in connection with a case of arms smuggling. In a bid to take advantage of the confusion, Amrit Chaitanya appeared before TV cameras at a secret location and declared that he was not the one the police were looking for in the arms smuggling case. He also claimed there was no case pending against him anywhere. He even appeared personally before a high-ranking police officer to give his side of the story. The TV appearance had a contrary effect. The Dubai-based Malayali asserted that the man in the TV visuals was the one who had cheated her.
Fake sanyasins need to be exposed. Such exposure must be welcomed, regardless of who does it. But the hunt of sanyasins going on in Kerala now cannot be seen in that light. For, those who are pursuing fake sanyasins are fake hunters. A close scrutiny will reveal that there are political motives behind the hunt.
As Amrita Chaitanya attracted the charge of rape of minor girls, apart from financial irregularities, doubts arose about the conduct of the police, which had let him go without even questioning. A Bharatiya Janata Party leader alleged that Amrita Chaitanya had links with Home Minister Kodiyeri Balakrishnan’s son, who is in a Gulf country. When Bhadran alias Himaval Bhadrananda, sitting in a police station, holding a gun to his forehead, waxed eloquent about ‘Balettan’, both the police and the minister invited ridicule. The minister’s son threatened to take legal action against the BJP leader for levelling charges against him without adducing any evidence. The minister himself asked media persons helplessly what he could do if someone called him brother. It was after these incidents showed up the establishment in a bad light the police and the Democratic Youth Federation of India launched the hunt for fake saints. The Home Minister said action would be taken against those who took the law into their own hands but nothing was done in this respect. The Chief Minister said DYFI need not do the job of the police. DYFI is under the control of the CPI (M). In the party, the decisive voice is the secretary’s, not the Chief Minister’s. The party secretary did not utter a word which gave any hint of displeasure at the DYFI action.
The CPI (M) was not alone in acting with political motives. The sanyasins are a group on which the BJP has relied since long to carry forward its Hindutva agenda. As the police and CPI (M) youths started exposing fake sanyasins, the BJP mounted resistance. As part of the effort, its youth wing, the Bharatiya Yuva Morcha, started looking for fake elements in the Christian and Muslim communities. Although this raised the possibility of communal polarization, no such thing happened. The CPI (M) added non-Hindu frauds to its hit list and the BJP added sanyasins with Marxist links to its. The Youth Congress, too, organized demonstrations against pro-Marxist frauds. When Aryadan Shaukat proposed the name of the Thangal of Panakkad for inclusion in the list of dubious saints, the Chief Minister seconded it. But the party secretary did not take it up. Youth brigades of all parties joined the hunt for sanyasins, but the police vent its spleen more on Youth Congress men than on the rest, betraying political bias. By providing a common ground to both the factions in the party, the hunt boosted the efforts to contain sectarianism in the CPI (M).
In the modern period, Kerala has produced several spiritual leaders like Vidyadhiraja Chattampi Swamikal, Sree Narayana Guru, Nataraja Guru, Nityachaitanya Yati and Swami Ranganathananda. What drew people towards them were their scholarship, simple lifestyle and keen interest in the welfare of the society. Many great saints had invited scorn early in their lives. Eventually they gained recognition by leading exemplary lives and rendering selfless service. The lifestyles of most of the people make it clear that they are a different breed.
The entry of fake saints must be viewed in the context of the changes that have taken place in the thinking of the society. Fifty or one hundred years ago, money was not widely recognized as a measure of success in life. The belief that even if one made money through shameful ways the money will wipe out the shame had not yet gained ground. Teachers could teach children lines like “Why do you need money if you have skills? Why keep ghee also when there is butter?” with full faith. And the students could imbibe the lesson without difficulty. You will have to give the term ‘skills’ a different meaning from what the poet meant to persuade today’s kids to accept those lines.
Ours is a society full of people seeking means to make quick money. Those who feel confident in their studies fulfil their hopes by becoming engineers and doctors. Parents who have the money translate their dreams into reality by buying not only college seats but, possibly, also degrees and jobs for their children. For a long time, the school system has been allowing students to go unhindered till the 10th standard. After that came the big examination in which nearly half the students, numbering about 250,000, were eliminated. After ten years of schooling, many of them were unfit to do manual labour. Education had alienated them from physical work, but it had not qualified them for white-collar jobs. When the education reforms now under way are completed, students will be able to go up to the 12th standard without hindrance. They may be able to avoid failure in the examination even at that point. There is, however, no reason to believe that those who pass Class XII under the new system will have a better future than those who failed Class X under the old system.
The government, the media and the youth organizations who are engaged in the hunt for fake sanyasins have provided little information about the social and educational background of those whom they have uncovered. It should cause no surprise if a scrutiny reveals that most of them are victims of the education system. How long did they study? Did they pass? Or did they fail? These are not really relevant questions. The only relevant question is: did education equip them to make an honest living? Sanyasa is but one of several areas where youths cheated by the education system find work that does not demand hard labour. They sneak into other fields too -- from gangs to politics.
Today Kerala offers tremendous scope for spiritual trade. Temples, which only people from the immediate neighbourhood visited 50 years ago, are now attracting devotees from far and wide. Family shrines have grown into regional institutions, and regional institutions have grown into national institutions. Churches and mosques have grown in numbers and as swell as size. According to Dr James Vadakkumchery, who was criminologist in the police department, there are fewer than 100 fake sanyasins in the State. Considering the possibilities of the market, this cannot be considered a large number.
Just as there are good people and bad people among sanyasins, there are good people and bad people among those who fall in their net. Those looking for solace belong to the former category. Those seeking material gains belong to the latter category. As life’s struggle intensifies, the number of people needing solace goes up. Not only losers in the struggle, but even those who succeed often come under severe stress. A good proportion of those who seek the help psychiatrists are family members of emigrants to the Gulf States.
If those who are looking for short-cuts end up in the company of fake sanyasins, it can be seen as a natural process like birds of the same feather flocking together. It is not easy to prevent that. The law has to take care of such people. But civil society must consider how it can prevent good people from falling into the hands of fake sanyasins. By raising a simple question, one can easily identify the fake ones: why do sanyasins need women and money? If there is a mechanism to take care of the needs of those wanting solace in a scientific manner and public comes to place trust in it, we may be able to prevent people from going to fake sanyasins.
An editorial which a CPI (M) publication carried under the heading “False sanyasins and false gods” brings to mind the figure of an ostrich standing with its head firmly planted in the sand. It says, “New god-men and goddesses are being born daily in the laze and inertia of progressive Kerala. The social mind alienated from political and cultural awareness is the most convenient place where gods can rest.” Who led Kerala into a state of laziness and inertia? How did Kerala’s social mind which unfailingly puts the CPI (M) in power in every alternate election get alienated from political and cultural awareness? There can be only one answer to these questions: as the political gods and prophets in whom they reposed faith are failing, the people are turning to the old gods again. Their minds are now so conditioned that they are ready to accept even false gods and prophets.
Based on article published by Mathrubhumi weekly in edition dated June 15, 2008
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