The Enforcement Directorate (ED) has arrested a gang of five in connection with a scam that saw them convince people to invest in fake stocks for high returns, resulting in the investors losing their money.
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Some of the victims were a Noida businessman who lost ₹9.09 crore, a Faridabad woman ( ₹7.59 crore) and a doctor from Punjab's Bathinda ( ₹5.93 crore), according to the central agency, reported NDTV.
The scamsters would first post ads on social media platforms such as Facebook, Instagram and X (formerly Twitter), ED officials said, adding that after posting ads, the fraudsters would try to lure in people by promising ‘ridiculously high returns.’
To convince a potential victim to invest, the apps contained names of popular stocks, futures, options, and others instruments for investment.
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“To build further trust, the victim might initially be shown to have got good returns, but in fact these are just numbers shown on these fake apps. As people invest more funds, they realise gradually that they are unable to withdraw their funds. Then, when they try to withdraw the invested amount, the scammers ask them to pay statutory taxes, brokerage fees, etc. However, these are nothing but ways to extract even more money,” an ED official was quoted as saying.
{{/usCountry}}“To build further trust, the victim might initially be shown to have got good returns, but in fact these are just numbers shown on these fake apps. As people invest more funds, they realise gradually that they are unable to withdraw their funds. Then, when they try to withdraw the invested amount, the scammers ask them to pay statutory taxes, brokerage fees, etc. However, these are nothing but ways to extract even more money,” an ED official was quoted as saying.
{{/usCountry}}“Once the fraudsters believe that they have extracted as much money as possible, they cut off all communication and disappear,” he further stated.
Meanwhile, in addition to the arrests, the ED conducted searches at multiple locations, recovering more than ₹25 crore worth of proceeds of crime.
The five arrested accused have been sent to the agency's custody for six days.