Masterminds Ulhas Prabhakar Khaire and Raksha J Urs alias Lokeshwar Dev Jain and Priyanka Dev Jain who perpetrated the Stock Guru scam really cannot be blamed for taking advantage of the naivety of their victims. Just a little smooth talk, a glittering show with a few celebrities, promises of a huge return is that it takes for people to open up their purse strings and hands over lots of money (Rs. 500 crores!) to perfectly unknown strangers with no background.
A fool and his money are lucky to have got together in the first place as Gordon Gekko said.
Lokeshwar Dev Jain and Priyanka Dev Jain implemented a childishly simple modus operandi. This is what they did:
(i) They set up an outfit called “Stock Guru” with an office in a prominent place in Delhi and other places;
(ii) The office was well done up and looked prosperous. The staff were selected after ensuring that they looked smart and spoke good Hindi & English. A skeptical person who walked into the office would be impressed by the way the office looked and the smart staff on duty;
(iii) Attractive terms were offered. The minimum investment was Rs. 10,000 and, obviously, there was no maximum. You were promised that your money would be doubled in 6 months;
(iv) If a skeptical investor asked how such high returns were possible, he was told that Stock Guru had employed expert and highly qualified stock traders who were able to buy and sell stocks on the stock markets and make huge returns;
(v) Agents were employed to canvass deposits. The agents were promised commission of upto 10 to 20% of the amounts collected depending on the quantum. Prospective investors were also contacted through Facebook;
(vi) Shows were organized where all prospective investors were invited. The shows had programmes by well known celebrities like Saloni of Comedy Circus fame. The celebrities were told to endorse Stock Guru during the show. Investors felt a sense of confidence that if such well known celebrities endorsed Stock Guru, then it must be an outfit of some substance.
The important thing in running a scam, which Lokeshwar Dev Jain and Priyanka Dev Jain understood very well, was that you had to appeal to the latent greed that is there in all of us while pacifying the skepticism that is also present.
The use of a glittering office, smartly dressed employees and endorsement by celebrities was all that was required to pacify the sense of skepticism that was present in the investors.
In a video recorded at a seminar in a luxury hotel in Vadodara, Lokeshwar Dev Jain can be seen at his persuasive best. He says that he has mastered certain stock market techniques which enables him to make a profit out of every trade no matter what the market conditions. He says that he took money from every source, including credit card advances, invested in the stock market and using his secret technique, became a millionaire. “I will do the same for you” Lokeshwar says with confidence.
After that, the only problem that Lokeshwar Dev Jain and Priyanka Dev Jain had was in regulating the mad rush of investors who thronged their offices with bundles of cash.
What led to the downfall of Stock Guru?
The indications are that Lokeshwar Dev Jain and Priyanka Dev Jain intended to play the Stock Guru scam a bit longer. They were completely taken by surprise when the Income-tax department raided their premises and confiscated all the cash and sealed the bank accounts.
As soon as news spread about the income-tax raid, nervous investors thronged Stock Guru’s offices demanding their money. This led to a run on Stock Guru and its collapse. Lokeshwar Dev Jain and Priyanka Dev Jain, fearing for their personal safety, absconded.
In a YouTube interview, Lokeshwar Dev Jain and Priyanka Dev Jain, in hiding somewhere, can be seen explaining to irate investors that the money will be paid back as soon as the Income-tax department releases the sealed bank accounts.
In the end, Lokeshwar Dev Jain and Priyanka Dev Jain did not really plan it well. They did not anticipate the Income-tax raid. If they had foreseen such an abrupt closure of the Stock Guru scam, they would have taken care to stash away the funds in a foreign country. They are masters of disguise. They would have created a new identity for themselves and flown away in the dead of night to an exotic foreign location where they could have spent the rest of their lives in sheer luxury.
So, I guess, the investors have the Income-tax department to thank for torpedoing Lokeshwar Dev Jain and Priyanka Dev Jain’s illicit scheme.
Anyway, now the struggle is about how to recover the money. A lot of money is in the custody of the Income-tax department. However, knowing the department, a huge demand for tax, interest and penalty will be raised against Lokeshwar Dev Jain and Priyanka Dev Jain and Stock Guru and all the seized funds will be adjusted against those demands.
Will the poor investors get anything at all? It will be a very, very long wait.