Social media project just a cover for Ponzi scheme, says STF
The Uttar Pradesh special task force (STF) said Anubhav Mittal, the managing director of Ablaze Info Solutions Private Limited, was arrested on Thursday for running a Ponzi scheme. STF said that this was a Ponzi scheme as the people were being paid from the money they had ‘invested’ in the company.Updated: Feb 14, 2017 11:21 IST
The Uttar Pradesh special task force (STF) said Anubhav Mittal, the managing director of Ablaze Info Solutions Private Limited, was arrested on Thursday for running a Ponzi scheme. STF said that this was a Ponzi scheme as the people were being paid from the money they had ‘invested’ in the company.
STF officials said that Mittal was running an online trading scam under the cover of software development and project management services. Along with 26-year-old Mittal, Sreedhar Prasad, chief executive officer and Mahesh Dayal, technical head, were also arrested. They are alleged to have duped around 7 lakh investors of ₹3,726 crore in two years.
Officials said that between 2011 and 2014, AIS used to provide web application, software development and project management services. In 2015, Mittal came up with the flagship venture of AIS, socialtrade.biz, an online barter system. Users, in lieu of a down payment, were assigned social media pages they had to support and were paid for each ‘like’ for the page.
Triveni Singh, the additional superintendent of police, cyber cell, STF, said, “A user could submit ₹5,750, ₹11,500, ₹28,750 or ₹57,500 as a one-time amount for offers such as 10 clicks, 25 clicks, 50 clicks and 100 clicks per day, according to their payment. After submitting the one-time amount, a user used to get an i.d and he/she had to click ‘like’ on the social media pages every day. They were paid ₹5 per like and this is how the business operated.”
However, investors in AIS claim that the company is about promoting small businesses and ventures through social media penetration. “Investors themselves used to provide Facebook links of their venture for other investors to click and like. This is how the cycle continued. Even if anyone did not have a business’ or firm’s link to offer, they used to provide links of YouTube videos and Facebook profile pictures,” Rahul Rana of Sector 22 said.
The STF said that the business was a cover. “It was a typical Ponzi scheme that was covered up as a social media penetration project, in which Mittal just provided a reason behind paying his investors a daily or weekly amount from their own investment,” Singh said.
Such a money circulation scheme is an offence under The Prize Chits and money circulation scheme (banning) Act, 1978.
First Published: Feb 03, 2017 23:20 IST