Hopes dim for Rs 500-cr online fraud victims

Hopes dim for Rs 500-cr online fraud victims

50,000 gullible investors may lose half their money, senior cops involved

The Criminal Investigation Department (CID) probing into the online fraud spread across various districts of Karnataka and neighbouring States feel investors will not get their entire investment even if all the accused are arrested and their immovable property is confiscated.

The CID estimates that nearly 50,000 people been defrauded by the multi-level marketing (MLM) and money growth scheme (MGS) and says many police officers are involved in the fraud.

The online schemes of luring people into investing in bogus schemes began in March 2006 in Belgaum and the fraud came to light only in December 2008. By the time by police began registering cases against 40 accused running a dozen companies, the fraudsters had shut shop and vanished.

A team of 10 police officers headed by Lokesh Kumar, SP of CID, is investigating the scam. Vijay Bellad of Pune first launched investment attracting scheme through his swisscash.com, in Belgaum. He had people invest huge sums in MGS and MLM. Investors got returns initially, but later the payments dried out.

More schemes

Similar web-based fraud schemes were launched by 11 others, and all were into luring the investors, eventually to cheat them.

The people of Belgaum, Bijapur, Bagalkot, Uttara Kannada, Bangalore, Kolhapur, Miraj, Sholapur, Tamil Nadu, Goa and other places had invested in thousands, hoping for good returns either in cash or kind. The accused, including Vijay Bellad, are absconding. The police manhunt in various districts and States has been futile.
D V Guruprasad, Director-General of Police, CID, said that under the Chit Funds & Prize Money Act of the Centre, running schemes such as MLM was an offence. “Our investigation has revealed that some police officers including DySPs, have colluded with the accused. When the investors in 2009 lodged a complaint with the police, cases were not booked. Instead, some police officers mediated between the accused and the investors,” he said.

The police registered cases only when superior officers turned the heat on. A sub-inspector has been suspended and at least six police officers will face action for their involvement, the DGP said.

Computers of some companies had been confiscated. The police appeared to have returned the hard disks of some computers.

The DGP said his department had collected electronic data which had thrown light on the scam. Bank accounts of 45 people involved in the fraud had been frozen, along with immovable property. Charge-sheets would be filed soon in two cases.
Can the investors hope of getting at least a part of their investment?

 “Going by the present status of investigation, I can say the investors are going to lose at least 50 per cent of their investment,” Guruprasad said.