Recently India had been rocked by a massive financial fraud known as "SpeakAsia". The company started almost two years ago and claim to be a "survey company" where participants just need to join, get monthly e-zine, and then take surveys to make money. However, casual examination of its compensation package revealed to be a thinly disguised pyramid scheme that relies on recruiting new members, who also subscribe to the program. The more you recruit, the more you "earn".
What is interesting about the phenomenon is the fervent defense by the "believers" of SpeakAsia, who shows all signs of being a brainwashed cult member, who can only recite "SpeakAsia is Great, death of all enemies of SpeakAsia" or its variants. Some even called upon death of the government as it is the only thing standing between them and prosperity under SpeakAsia.
Is there some thing to learn from this mess? Is there some deep-seated vulnerability of Indians to scams?
The Cult of SpeakAsia
In April and May 2011 TV Station did a massive expose on the scam, and lid started to came off the scam, which by then claimed two million members in and around India, even though the company is supposedly based in Singapore. Multiple agencies in India started investigating, and accounts were frozen, then unfrozen, then frozen again. COO was then arrested for financial irregularities and forgery. (
See details )
What remains constant is massive amount of "popular support" by SpeakAsia members, who sprouted statements such as
india poor. Do u know why. coz some people like this word. Who r they. Who fight against saol to get down. They are bad man of india. Die badman of india. if u die than we can earn. We can rich we want to hear india is rich.
SAOL = Speak Asia Online
Basically, the only thing standing between them and prosperity through this scam is the government, so the government must go.
The calmer ones blame the government for freezing the assets of SpeakAsia so they lose their money:
But what about the people who have already put in thousands of rupees into this, because of the govt. taking action, the current investors are also not getting their money back!! is that not wrong ? shouldn’t the govt protect the investors’ interest ?
SpeakAsia definitely did not help the situation by releasing a video portraying all challengers as the devil(s) incarnate (red cape and devil face).
(See screen caps of videos and the actual comments at
http://behindmlm.com/companies/speak-asia-online/speak-asia-lose-the-plot-bollywood-meets-mlm/
and
http://behindmlm.com/companies/speak-asia-online/speak-asia-online-coo-tarak-bajpai-arrested-in-mumbai/comment-page-1/#comment-28420 )
Did all these people (let's say, HALF of the panelists, or 1 million) got brainwashed into trusting this SpeakAsia scam more than the government? Or is there some deep sense of distrust of the government that remained untapped until this fraud exposed it and exploited it?
Pyramid Scheme and Power of Reality Inversion
Pyramid schemes, when gotten large enough, can actually topple governments.
Government of Albania was destroyed in 1997-98 by pyramid schemes and over 2000 people died in the chaotic aftermath. A series of pyramid schemes ensnared 2/3rd of population,
according to IMF report, and it took several years for Albania's economy to recover.
In Colombia, a major
Ponzi scheme ran by DMG Group (which also was used to
launder money from drug trafficking) collapsed in 2008, and in a rare cooperation between nations, the head of the scheme,
David Murcia Guzman, was extradited to the US, convicted of money laundering, and will serve 8-year sentence here, THEN remanded back to Colombia to serve ANOTHER 30 years sentence. The scam involved up to two BILLION dollars, and severely damaged the credibility of the Uribe government when it was revealed that two of President Uribe's sons were good friends of the head perp. Riots broke out in several cities and mobs appeared to ransack (or try to) DMG offices. Police had to use riot gas to disperse the crowds.
What's interesting is some of these people claim that David Murcia Guzman was doing the country a favor... by passing on some of the wealth to the poor.
But there was a twist to this Icarus-like story: many of the small investors in D.M.G. saw Mr. Murcia not as a swindler but as their savior and protested his capture in almost a dozen cities. They claim the government’s intervention in D.M.G., not the nature of its activities, caused the loss of their savings. A hunger strike by his most die-hard supporters, who want his release and the reopening of D.M.G., persisted well into January in the colonial heart of Bogotá.
... Supporters chanted “Crea en Dios y en David Murcia” (“Believe in God and in David Murcia”).
( link to NY Times Article here )
What is it about pyramid schemes that can lead people to see evil as good, and see villain as hero? The only thing to compare it to is a cult, and not merely a cult, but a
DESTRUCTIVE CULT.
Pyramid Scheme as a Cult
Virtually every nation have laws against operating pyramid schemes, because the losers vastly outnumber the winners. European Union has laws under "consumer protection directive", and is a common set of laws across all
European Union Members. In the US, the laws are slightly fragmented, as some is regulated by SEC, some by FTC, and some by individual states.
Indeed, such a problem is in India, where multiple agencies realized they don't seem to have laws to enforce on a company which is not physically present in India. While India does have a "Prize Chits and Money Circulation Fraud Law (anti-)" there is no National Agency to enforce this law. Instead, enforcement must be initiated by individual province. The National
Reserve Bank of India, as well as Criminal Investigative Division (CID) and Economic Offenses Wing (EOW), of various provincial governments finally responded recently with arrests and freezing of accounts, but it is estimated that over 100 million dollars have already left India for accounts in Singapore.
And it is amazing how much support this scheme still has among the "Speak Asians", as they refer to themselves (actually, that's a company term, as one of its marketing campaigns is "I am a Speak Asian"). Do they exhibit any OTHER signs of cult membership?
These are the signs from CultClinic.com
- Thinking in black and white terms -- YES
- Using a new language/cultic jargon -- YES
- Saying goodbye to all old friends and only seeing people affiliated with, or not critical of the cult -- PROBABLY YES
- Creating distance from family, especially during holidays and family events -- UNKNOWN
- Euphoric, yet simultaneously tired and worn -- PROBABLY YES
- Humorless -- UNKNOWN
- A change in diet and sleep patterns -- UNKNOWN
- Low on money -- YES
- Poor grades -- UNKNOWN
- A dismissal of their life prior to involvement with the group as "all bad" -- UNKNOWN, PROBABLY YES
- A change in goals, priorities, and life plan -- YES
- Return to child-like behavior -- UNKNOWN
- Dogmatic adherence to new beliefs/ideas, with the inability, or lack of interest to logically assess these new beliefs -- YES
- Secrecy -- UNKNOWN
Wow, that's a lot of yes signs for something that wasn't supposed to be a cult at all.
Vulnerability to a Cult (of Money)
It is interesting that such a cult of money is often formed in the poorer areas of the world. Colombia, Albania, Indonesia, India... all have seen bouts of pyramid schemes where many are cheated of money, because they see the "potential" of such schemes, but not its illegality.
What do pyramid schemes offer? "Instant riches", enough to change the life of a typical family in those areas.
They don't care if it's illegal or not. They just want the chance, if they don't have to directly cheat, hurt, kill, or steal to get it. If you just TELL these people it's illegal pyramid scheme, they won't believe it. They can self-justify themselves into seeing it as "it's okay, it's not THAT illegal." Esp. if they are taught to see it as "introduce that other party to the opportunity so THAT person can also be rich like you."
It is also worth noting that these countries have rather low opinion of their governments in general. So words of the government are not always trusted by the people. After the DMG fiasco, 77% of the people in the area thinks things are going badly, and they blame the government more than DMG.
Add some mind-control techniques, and you got yourself something that acts like a cult, but is not a cult per se. There is no "leader" and there is no "dogma" (other than "_____ is great, join us.")
Conclusion
Pyramid schemes are illegal, as it leaves damage both financial and psychic. Members are basically brainwashed into believing in money and the scheme, and the conversion is subtle yet unmistakable.
It is important for all to be aware of such schemes, and alert authorities at first sign of trouble. The earlier you can get to the scheme, the less victims it will have.
