Indian regulators have issued an alert to residents warning of a Ponzi scheme that promises lucrative returns in echange for investing in a goat-rearing venture. Citizens of the Jammu and Kashmir province, the northermost state in India, were advised to steer clear of the Sheep Husbandry Department, which is advertising 2% monthly returns from an investment in goat-rearing farms. Ironically, the scheme comes just months after investors were warned of a similar scam also seeking investors for goat-rearing farms.
According to the Securities and Exchange Board of India ("SEBI"), Sheep Husbandry Department ("SHD") has solicited investments from the public basd on claims that its goat-rearing farms could double investors' money in 3-4 years by offering 2% monthly returns. SEBI has opened an investigation, with details about the number of affected investors or estimated losses unavailable.
SEBI warned investors about a similar scheme in November 2012, opening an investigation into the Beetal Livestock & Farm (P) Ltd ("Beetal"). Beetal took out advertisements in local newspapers to solicit potential investors, who were told that they also could double their money in several years by offering consistent monthly returns. For example, with an initial investment of several thousand rupees, an investor would purchase a goat. Investors were told that an average goat had four kids per year, which offered the possibility of exponential returns through subsequent births by those offspring in later years. The masterminds of Beetal did not cooperate with investigators, and are suspected to be on the lam.
Surprisingly, such schemes are not uncommon in India, where unconventional investments such as livestock or farm animals have been the subject of similar schemes. For example, a Ponzi scheme centered around raising emus recently collapsed, with thousands of investors facing up to $50 million in losses. There, a company known as Susi Emu Farms ("Susi") promised investors a steady stream of income in return for raising an Emu chick. After two years, investors were given the chance to "exchange" their two-year old Emu for another Emu chick. A VIP program soon followed, in which investors could receive a similar return while Susi took on the obligation of raising the emu. Word quickly spread of the dependability of the promised returns, and an advertising campaign headlined by popular Indian film stars quickly made Susi a household name. The operation soon spread throughout India, gaining thousands of investors. When the scheme collapsed, total losses were estimated to be as high as $50 million.