Ponzi schemes and Pyramids ensnare foolish devotees
by Ananda das
ISKCON Victoria, B.C.
Posted December 9, 2002

Recently I was shown an appeal, apparently sent to many other devotees as well, to participate in a dubious financial scheme. Using phrases like "a dream come true for devotees", "a way to make large amounts of money while working from home", "time sensitive window of opportunity", etc., etc., the letter tried to frame in terms of urgency an appeal to devotees to become involved in an alleged "Billion Dollar internet company."

Although the letter made reference to the possibility of using the promised income stream in the service of Sri Krsna, the letter was obviously only a crude modification of a letter originally designed by materialists to appeal to naked greed for more cash. The get-rich-quick program referred to in the letter, in extremely nebulous terms, is claimed already to be operating in 165 countries, but the author of the program is so certain of its utter lack of genuine appeal that no concrete details can be given in the breathless e-mail, only an exhortation to call a certain number to listen to a high-pressure sales pitch. The fraudulent organization, entitled "Get Moving Today," offers nothing more than some worthless reports and a bulk e-mailing program, and its whole raison-d'Ítre is to lure other participants into the scheme in order to lure still more participants -- it is a recipe for certain disaster.

One devotee friend correctly diagnosed the egregiousness of the letter and its only slightly cloaked appeal to greed: "Another scam . . . ?" he wrote. "They never give up -- the internet mall, the gifting club, etc. The concept of 'right livelihood' has no reality to some people."

Another devotee wrote that she personally liked the devotee who had sent the get-rich-quick letter, but felt "very uncomfortable" about it. "It sounds like a scheme and I don't want to contribute to anyone getting hurt," she added.

A third devotee pointed out that the letter is only 'spam' -- mass unsolicited e-mail, as he had received identical or near-identical appeals from multiple addresses, indicating that it the scheme is already far advanced, and that the relatively small "time sensitive window of opportunity" alluded to in the letter [to get in on the ground floor and cheat others before they catch on, and so many people have enrolled that it will be nearly impossible to enroll additional 'suckers'] has already passed.

These devotees are absolutely correct in their assessment of schemes of this sort. Someone should do up a canonical list of all the schemes ever invented that various devotees became involved with, for which they lost the friendship and trust of other devotees whom they lured into the scheme on the promise of rapid wealth.

I would add:

One scam in which I was invited to participate last year involved an illegal multi-level pyramid in which you had to buy a position in a hierarchical grid and then enroll 16 other people to get your money back. Each of those 16 victims would then themselves have suffered a net loss until they managed to enroll a total of 256 people in order to recoup their losses. That operation was shut down in short order by the RCMP, but not before many of my devotee friends succumbed to the blandishments of one of the earlier victims of the con game, who was frantically trying to cover her own heavy losses. Any system that depends on an exponential process of signing up other people but which offers no actual product or which has the product described as vaguely as in our prabhu's forwarded letter is, prima facie, a cheating gimmick.

The problem is analogous to a famous Sufi story about a man who served a king well and asked to be paid in an unusual way. He asked the king for one grain of rice for the first square of a chessboard, two for the second, four for the third, eight for the fourth, etc. The stupid king, who knew nothing about mathematical exponentiation, had no idea that his granary would be entirely emptied and his kingdom bankrupted long before he could satisfy his obligation. Like the fraudulent chain letters we all see regularly, Ponzi schemes which depend on paying off initial speculators with the income of later investors are doomed to collapse, because after 24 cycles of doubling the number of participants, there will need to be more people involved in the scheme than live in either Canada or California, for example. After 32 cycles, more people will be required to participate than there are human beings on earth. (Most actual systems require a participant to sign up more than two other people to recoup his or her "investment", so the pyramid will in fact collapse much more quickly. A devotee who forwards such a cheating letter may be personally honest, yet simultaneously a fool who has been cheated into a marketing scheme by others. Such a devotee becomes like Aesop's fox which lost its tail, and now must encourage the other foxes to cut off their own tails as well. Those who enroll will be cheated by their sponsor, even though the sponsor, being himself or herself a victim of the scam, may not be aware that the entire process is a web of deceit in which he or she is already ensnared.

There is really no system to "get rich quick". Getting rich quick may be sometimes justified by sincere devotees in their own minds as increasing the opulence of temple Deities, repaying the temple mortgage, or supporting congregational development, but it is simply CHEATING.

It is another aspect of the disease that motivated some temple leaders into signing contracts for large parcels of land with hidden balloon payments at the end. The idea was that the number of Krishna devotees was projected to increase unlimitedly and the larger devotee base would surely be able to pay off the inflated final payment after years of artificially lowered payments. The sad reality was hundreds of peon-devotees struggling for years to collect laksmi, while temple-leader devotees lived in temporary opulence, only to see the whole house of cards collapse and the land and building improvements repossessed by the seller, with nothing to show for all the years of hard labour.

The schemes of scoundrels and the presumably well-meant plans of temple leaders who knew nothing of sound fiscal management are aspects of greed and are variations of gambling -- a vice that all aspirant devotees are urged assiduously to avoid.

"Gambling of all description, even speculative business enterprise, is considered to be degrading, and when gambling is encouraged in the state, there is a complete disappearance of truthfulness." -- Srimad-Bhagavatam 1.17.38

The problem of greed -- though dressed up in a pious desire to help one's temple or an urgently felt need to help one's family -- is endemic in ISKCON, and it is traceable to the scorn for higher education which is even today, in some temples, deliberately inculcated into devotees from a tender age. If devotees were taught, instead, the importance of either getting a university education or apprenticing to learn a useful trade, the economic problem that bewilders the majority of ISKCON householders would be solved. Devotees who had useful paid employment would be in a position to care for their families, and would have sufficient left over that they could realistically tithe to their local ISKCON temple, instead of lamenting their inability to do either, and eagerly biting the baited hook of the next cheater who came along.


  1. The Circle of Gold Fraud was exposed as a fraud in the Louisville (Kentucky) Courier-Journal, Nov. 29, 1978 in Mervin Aubespin's article, "Bigger stakes all that's new in the latest chain letter." p. 1, col. 6. The article explained that the pyramid scheme had surfaced in Louisville, Bowling Green and San Francisco. James W. Winegar, Cincinnati postal inspector: "Mostly, our biggest problems have been with the pyramid schemes which promise people that they can make large sums of money at home in their spare time doing almost nothing. These people send off money only to receive a pamphlet telling them they have to send more money and get others involved."

  2. PDI was an apparently well-meant attempt to distribute sanctified foodstuffs more widely through a licensing deal with Paramount Studios for the rights to name a food product "Bionic Bits" as a product tie-in with a then-popular television series. Everything went off the rails on this one -- instead of devotees preparing the actual prasadam, it was to be manufactured on an assembly line by non-devotees; the licencing fees demanded by Paramount were exorbitant; the factory start-up costs were enormous; to pay the bills the devotee manager borrowed money from loan sharks, etc., etc. This product could only have succeeded had the managing devotees been willing to start small, to forego stupid marketing tie-ins with non-devotees, and to produce the product in temple kitchens until the profits could finance a larger commercial kitchen. This was another project doomed by greed for instant results.