Rs 400-cr fraud: Cops clueless about number of victims as accused destroyed docs

Khasnis brothers had offered high rates of interest, failed to return deposits

The Khasnis brothers — Harsha Khasnis, Sanjeev Khasnis and Shrikant Khasnis — prime suspects in a Rs 400-crore scam involving Harsha Entertainment Pvt Ltd (HEPL) based in Kalghatgi in Dharwad district, reportedly destroyed books of accounts to evade a possible search by income tax sleuths.

According to the CID, they destroyed the papers at their farmhouse after I-T sleuths from Hubballi slapped a notice on them based on a suspicious transfer of Rs 20 lakh from two nationalised banks, weeks before the police registered cases against them.

The suspects did not respond to the I-T notice. They feared sleuths might search their house and seize documents, cash and jewels which would reveal their fraud, said a senior police officer involved in the investigation.

According to the statement of a public prosecutor from Kalghatgi, one of the victims, over 80% of the victims are government employees. “We have obtained statements of 2,400 victims. We are finding it difficult to ascertain the exact number of victims as certain documents have been destroyed,” he said.

The trio suffered losses after demonetisation. They tried to return around Rs 25 lakh to investors through demonetised Rs 500 and Rs 1,000 notes. However, some depositors refused to accept deomonetised notes. The suspects promised to repay the money, but went back on their word, said the police.

The scam started when Manjunath Ullagaddi, a local businessman, offered investors a high rate of interest. He had promised to double the investments in a short span of time. The trio then competed with Ullagaddi and offered interest between Rs 9 and 12 for Rs 100 per month. However, Ullagaddi lured investors by offering more.

The Khasnis brothers then offered one bike for Rs 25 lakh investment and one expensive car for Rs 1 crore investment. They distributed 16 cars and 45 bikes as gifts, added the police. The police registered two cases against Ullagaddi, too.

The trio wound up the company on April 11, 2017, and vanished with investors’ money. The police picked them up from a hotel in Mathura in Uttar Pradesh.

Cases were registered against them under IPC sections 120 (b) (criminal conspiracy), 406 and 408 (criminal breach of trust), 420 (cheating) and Section 9 of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, (Fraudulent Default by Financial Establishment), 2004.

The Khasnis brothers were small-time moneylenders in 2005. The business grew rapidly and they started taking deposits from the public promising that money would be invested in the stock market and film production.