An Indonesian man has been arrested and charged with fraud in connection with a suspected Ponzi scheme that promised exponential returns purportedly derived from the sale of advertisements on the back of tissue paper packets. Kamal Tarachand, of North Jarkarta, Indonesia, was arrested after several dozen victims - including some Indonesian celebrities hired to promote the scheme - came forward to authorities. Authorities are actively investigating the scheme and are also considering filing money laundering charges.
Beginning sometime in 2013, Tarachand began recruiting victims with the promise of huge returns from the sale of advertisements on the back of tissue paper packets manufactured by his company. Potential victims were provided with samples of the tissue paper packets featuring advertisements for restaurants and cosmetic companies. The promised returns were staggering. According to authorities, Tarachand promised that for every $75 invested in the tissue paper business, victims would receive a daily return of $3 to $15 - an annualized return of up to 6,000%. Tarachand hired well-known Indonesian celebrities to promote his business and lend an air of legitimacy, including a soap opera actress and an actor. Some victims were also lured with the prospect of free advertisements in exchange for an investment. It is speculated that the scheme may have attracted thousands of investors across Indonesia.
But authorities allege that Tarachand was running a classic Ponzi scheme by using new investor funds to pay returns to existing investors. One lawyer for some of Tarachand's victims has stated that the tissue paper business never went into production. Authorities raided the tissue paper business earlier this week, and have also confiscated some of Tarachand's assets while they continue their investigation.