Uttar Pradesh: 1.5 Cr Ponzi Scheme Busted by Delhi Police in Muradabad
The Delhi Police’s Economic Offences Wing (EOW) arrested two people for alleged involvement in fraud and cheating. The two are accused of launching a Ponzi scheme in order to defraud investors under the guise of investing in dairy projects through the entity Pratistha Bazaar Pvt. Ltd.
According to the EOW, the accused defrauded 44 people to the tune of Rs 1.5 crore, and more victims may come forward. Furthermore, the entity was not registered as a non-banking financial company (NBFC) with the Reserve Bank of India (RBI).
The accused have been identified as 47-year-old Rajeev Kumar Sharma of Ram Ganga Vihar in Moradabad, Uttar Pradesh, and 30-year-old Kundan Sharma of Muradabad’s Nand Colony.
The pair were apprehended, and relevant sections of the Money Circulation Schemes (Banning) Act, as well as the Reserve Bank of India Act, were invoked.
The EOW initiated its action following 14 complaints that were registered with allegations against Pratistha Bazaar Pvt. Ltd.
As per the complaint, the accused launched a Ponzi scheme wherein investors were allured to add or invest a certain amount on the basis of false assurances to entice gullible investors.
According to the authorities, the majority of the funds were invested in cash, and no agreement was reached in this regard other than issuing cash receipts to investors.
Initially, the complainants received some returns in instalments in accordance with business plans, but payment was later discontinued.
When the complainants approached the company, they discovered that the company office was closed and that the funds had been used for their benefit.
“The total number of complainants in the case has now increased to 44, and the amount of fraud has been increased to Rs 1,51,38,000,” according to the EOW.
What is a Ponzi scheme?
Ponzi schemes are typically based on deceptive investment management services. Investors contribute money to a company that promises them higher returns than others. Also, if those investors want their money back, it is paid out with funds contributed by new investors.
The person in charge of organising this type of fraud controls the entire operation; they simply transfer funds from one customer to another and do not engage in any real investment conditioning.
Is it Legal to Run a Ponzi scheme?
Ponzi schemes are illegal because they do not invest the funds provided by the investors. They collect funds from new investors and distribute it to their original investors.
In reality, they simply transfer money from one client to another; they make no investments. Moreover, they charge a fee for the services they provide.
Why is it Called Ponzi Scheme?
The Ponzi scheme can be traced all the way back to 1919. Charles Ponzi inspired the Ponzi scheme. He was well-known for using deception to persuade people to invest their money. Charles Ponzi is best known for launching the first Ponzi scheme.
The postal service in the United States of America had developed transnational reply tickets at the time. These tickets permitted the transfer of pre-purchase postage and the attachment of the same to correspondence. In their response, the receiver would change the pasteboard for precedence prints.
Because of the constant fluctuation in stamp prices, prints are expensive in many countries.Ponzi had arranged for agents in other countries to purchase low-cost tickets and deliver them to him. He also changed them to advanced value prints. These prints were also profitably sold.
Wisdom Ganga is a Blogging Site that Aims to Make People Aware of Online Scam and other Digital Knowledge. Scam Topics are very sensitive issues that have taken the shape of Crime. The majority of people are not aware of such things. Please help us to make people aware of Scam and Cyber Crime by sharing this knowledge and article with others. Also Help Us by following us on Instgram, Facebook and Twitter.
Our team at Wisdomganga is constantly working to recognize all the possible scams and is focused on making everyone aware of them. If you find this article useful, you can now order a cup of coffee for our team as a token of appreciation.