Ponzi scam probe: ED searches 15 locations in Nagpur, Mumbai; seizes jewellery, cash worth ₹6.72 cr
During the searches, the agency has seized unaccounted jewellery worth ₹5.51 crore and cash worth ₹1.21 crore. The ED suspects that the Ponzi scheme operators laundered large amounts of money.
Mumbai The Enforcement Directorate (ED) recently conducted searches and surveys at 15 locations in Mumbai and Nagpur in connection with a major investment fraud in which the accused ran Ponzi schemes and duped many investors out of hundreds of crores.
During the searches, the agency has seized unaccounted jewellery worth ₹5.51 crore and cash worth ₹1.21 crore. The ED suspects that the Ponzi scheme operators laundered large amounts of money.
ED officials said on Monday that they conducted the search and survey operations at 15 locations in Nagpur and Mumbai on March 3 in the investment scam headed by Pankaj Mehadia. Searches were done at the residences and offices of Mehadia, Lokesh Jain, and Karthik Jain - the purported main accused in the scam. The searches were also extended to the offices and residential premises of the main beneficiaries.
ED’s money laundering probe in the scam is based on the predicate offence registered at Sitabuldi Police Station in Nagpur, against Mehadia, Lokesh, Kartik, Balmukund Lalchand Keyal, and Premlata Nandlal Mehadia for allegedly committing fraud and causing loss to investors in the crores of rupees.
An investigation into the money laundering aspect of the scam has revealed that Pankaj, along with accomplices, were running a Ponzi scheme and luring various investors by promising to give a 12% assured profit after deducting TDS on the investments made from the years 2004 to 2017.
“Throughout the period of 2005 to 2016, with the malafide intention of cheating and siphoning off the investors’ money, the accused persons ran the Ponzi scheme, giving assured returns to win over the investors and thus luring the investors to invest in larger amounts in the associated firms or companies and ultimately did not return the money,” ED said in a statement.
To divert the money and give the transactions a tinge of legitimacy, transactions worth more than ₹150 crore have been affected in the bank accounts, and it is suspected that most of these transactions are not backed by genuine business deals and are accommodation entries, the agency added.
Accommodation entries are routing the unaccounted income back to the books of account disguised as loan or share capital to evade tax. The method is to bring the unaccounted money back to the business without paying any tax on it.
Besides seizing unaccounted gold and diamond jewellery worth ₹5.51 crore and cash worth approximately ₹1.21 crore, the central agency has also seized digital devices and various incriminating documents, etc. during the searches.