The Economic Offences Wing (EOW) of the Delhi Police has arrested a 36-year-old former advocate for allegedly cheating around 200 people of nearly ₹100 crore through a Ponzi scheme that promised high returns on share market investments, officials said on Wednesday.
Sanjay, a resident of Geeta Colony, was arrested after multiple complaints were lodged against him and his associates for inducing people to invest in companies floated under the banner of 'Tradecop', police said in an official statement.
Sanjay and his partners launched investment schemes claiming they would offer 8 per cent fixed monthly returns. Of this, 4 per cent was to be given as interest, and another 4 per cent was to be repaid from the invested amount. Investors were promised that their money would double within 25 months, it said.
Police said the accused misrepresented that they had developed in-house algorithms capable of generating over 20 per cent monthly returns from the financial market.
"Initially, the investors received returns for a few months, but later payments stopped. The accused then disappeared without refunding the money," an officer said.
Following a joint complaint by several investors, an FIR was registered in February this year. To date, 56 complainants have approached the EOW alleging losses amounting to ₹2.5 crore.
{{/usCountry}}Following a joint complaint by several investors, an FIR was registered in February this year. To date, 56 complainants have approached the EOW alleging losses amounting to ₹2.5 crore.
{{/usCountry}}However, the investigation revealed that nearly 200 people had been defrauded of close to ₹100 crore, police said.
During the probe, investigators traced the money trail and found that deposits made by investors in firms such as Trade Cops Pvt. Ltd. and Tradecop Financial Services were diverted to another entity, Tradecop Portfolio LLP.
The funds were misappropriated, and some of the proceeds were allegedly used to purchase land worth about ₹10 crore in Uttar Pradesh's Mathura, police said, adding that steps were being taken to attach the property.
The accused would pay returns to old investors from the funds collected from new investors, police said.
Police further said that the Securities and Exchange Board of India (SEBI) had already barred such schemes in a September 2022 circular, warning that offering fixed returns through algorithmic trading was not permissible.
Sanjay, who completed his graduation from Delhi University through correspondence and later pursued law from CCS University in Meerut, had practised at the Karkardooma Court for two years.
He allegedly joined hands with another advocate, Deepak Thakur, described by police as the mastermind of the racket.
Investigators said Sanjay's wife is also named as a co-accused in the case and is currently absconding. The accused had earlier been lodged in a jail in Haryana's Karnal in connection with a similar fraud, officials said.
Police added that at least four other cases have been registered against the accused and his associates in Delhi, Haryana and Uttarakhand, including in Kurukshetra, Yamunanagar and Dehradun.