₹37.13 crore assets seized in ₹10,000 crore Ponzi scam

MUMBAI: The Enforcement Directorate (ED) has frozen and seized assets worth around ₹37

MUMBAI: The Enforcement Directorate (ED) has frozen and seized assets worth around ₹37.13 crore during searches in Mumbai and Bhopal in connection with an alleged ₹10,000-crore Ponzi scam run by a business group allegedly controlled by S Agrawal, the agency said on Tuesday. The group is accused of fraudulently collecting more than ₹10,000 crore from the public through a network of cooperative societies and investment schemes.

A few cooperative societies, including the Loni Urban Multi-State Credit and Thrift Co-operative Society (LUCC) and other affiliated societies, are under the ED’s scanner, officials said.

During searches conducted from Thursday to Sunday at multiple residential and business premises of accused persons and suspects associated with the business group, the ED seized suspicious documents and froze proceeds of crime worth around ₹30 crore. These included listed shares and securities, mutual fund instruments, insurance policies and bank balances.

The agency also seized ₹1.53 crore in cash, foreign currency worth ₹35 lakh, and gold jewellery and silver bullion valued at ₹5.25 crore.

The ED launched its money-laundering investigation following several cases registered by police in Uttar Pradesh, Madhya Pradesh and other states against LUCC and its affiliated cooperative societies. According to the cases, since 2009, the group had allegedly induced members of the public to invest in recurring deposit, fixed deposit and monthly-income schemes by promising extraordinarily high returns.

Investors were allegedly assured that their investments would triple within five years and were also offered gifts such as cars. The police cases alleged that the business group had no genuine business activity capable of generating such unrealistic returns. More than ₹10,000 crore was allegedly collected from the public through these schemes.

The investors were initially allegedly provided payouts, but most of the funds were subsequently siphoned off by the accused and their associates for personal aggrandizement and payment of market commissions to agents and associates, the ED said.

Funds collected from the public, predominantly in cash, were allegedly channelled by the group’s promoters into movable and immovable assets in India and abroad through shell firms.

The searches have now revealed an alleged network of around 50 shell entities controlled by certain operators identified by the ED. S Agrawal, described by the agency as the principal controller of the business group, is currently located abroad, officials said.

The ED had earlier issued two provisional attachment orders in the case and arrested a key functionary of the business group, RS Tiwari, on July 14. The agency has so far filed one charge sheet in the case.