Ponzi scheme is not just a simple fraud but it is a fake earning system that runs on people’s money. In this, people are lured with high returns, fixed income every month and quick doubling of their money. In the beginning, people are also given money on time so that trust is maintained. Actually there is no strong business going on there. Money is given to the old people from the money taken from the new people.
This is why the entire system appears fine as long as new people keep joining. Gradually it turns into a big network, where more and more people are connected through agents, social media, mobile apps and referral systems. As soon as new money comes in, payments stop and the entire network begins to break down. In the last few years, many such big cases have come to light in India where thousands of crores of rupees were raised and lakhs of people were affected.
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How big is the net in India
Between 2019 and 2022, the Central Bureau of Investigation (CBI) had registered cases against 132 companies and institutions related to Ponzi schemes. During this period, the Enforcement Directorate (ED) had initiated 87 money laundering investigations. 1,540 complaints related to deposit schemes and non-receipt of money were also registered on the online complaint portal of the Reserve Bank of India (RBI). This shows that a large number of people have fallen into such a trap.
Many schemes are hooking people by calling themselves digital coin, forex trading, artificial intelligence or online investment platforms. People are shown increasing earnings on mobile screens so that trust remains and people keep investing more money.
Rose Valley became a great example
The name of Rose Valley Chitfund is also included in the biggest Ponzi cases reported in India. According to ED, the Rose Valley party had collected about Rs 17,520 crore from people of West Bengal, Odisha, Assam and other states. Investigation revealed that approximately Rs 6,666 crore was not returned to the people.
Lakhs of people were affected in this matter. By April 2026, ED had informed that the process of returning Rs 127.69 crore to about 1.73 lakh people would be completed. Rose Valley’s network had spread to villages and small towns. Agents used to assure people of high earnings and safe investments. With this belief, many people had even invested their savings of years in this.
Concern increased due to Falcon
In recent years, cases like Pearlvine and Falcon were also much discussed. In the year 2025, ED investigation revealed that a scheme named Pearlvine had raised about Rs 1,575 crore. According to investigation, about Rs 395 crore was not returned to the people. The company claimed that it had around 80 lakh members. Similarly, Falcon Invoice Discounting Platform was also accused of running a big network. According to the investigating agencies, this platform had raised about Rs 1,700 crore and people were promised returns ranging from 11 percent to 22 percent.
Challenge before investigating agencies
Investigative agencies say that now many schemes are connecting people by calling themselves foreign businesses, new technology or online investment platforms. In some cases, work was done without any government approval, while in many places there were allegations of money being diverted through different companies and accounts.
From outside these schemes appear very strong and reliable but from inside the whole system runs only on the money of new people. There is no strong business there which can generate continuous income. This is the reason that as soon as new money comes in, payments start stopping and the entire network starts breaking down.
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How to avoid such cases?
Experts say that people should be wary of promises of high returns and quick doubling of money. Before investing money in any scheme, it is important to check whether the company is registered with government agencies like Securities and Exchange Board of India (SEBI) or RBI. One should not trust just based on social media promotions, agents’ words or seeing screenshots of earnings because in many cases, big networks were built by winning people’s trust in this way.
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