The fraud and misappropriation wing of the Central Crime Branch (CCB) has filed a complaint with the jurisdictional police against a city-based finance company for allegedly duping as many as 2.5 lakh customers to the tune of Rs. 10 crore.
Explaining the modus operandi, Inspector Yathiraj B.S. of the CCB said that the firm — Smartway India Enterprises — had collected Rs. 8,000 from each person as primary deposit and issued ID numbers, which contained 100 business value points. They were told that the more depositors they enrolled in the program, the more points they would earn. As an incentive, they would not only be given more than 10% commission for each deposit, but could also trade in their points for holidays abroad.
“The company’s managers conducted a series of business meetings in the last six months and collected money from 2.5 lakh customers,” Yathiraj said.
According to the police, the firm had collected Rs. 10 crore from investors. But, depositors had not been given documentary proof for their investment.
“Further inquiries revealed that the company had not taken permission from either RBI or SEBI,” said the CCB in its complaint.
Based on the complaint, the J.B. Nagar police have registered a case against the company under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
This is the second such scam to be uncovered in recent times.
In March, the directors of Vikram Investment — a finance company — were arrested for allegedly duping over 500 investors of Rs. 300 crore.
