How the investors were enticed

Mary (who was cheated in the argawood investment) told me that she was approached by a telemarketer. She attended a seminar. She made her own investigation before investing. There was another argawood company that showed profit for the investment.

I told her that this was their mode of operation. The promoter set up a company on a small scale and allowed the initial investors to make a profit. After that, they were able to attract many investors for their bigger scale operations. Even the initial investors who made a profit put more money into the later operations. The later investors got stuck with non yielding trees. 

This is similar to the land banking plots. The earlier investors were able to sell their plots for a small profit (probably to buyers who were connected with the promoters). They were excited and made bigger investments. They also get their friends to come in.

It is the same story with the gold investments. The earlier investors were paid an attractive return. They came back to make bigger investments. The pattern is the same for all of these types of "scams".