‘Over 2 lakh depositors cheated of ₹8,640 crore in Ponzi scheme’

Over 2 lakh depositors lodged complaints against several non-banking firms accusing them of cheating them to the tune of approximately ₹8,624 crore in the last few months by luring them to invest in Ponzi schemes, said Economic Offences Wing (EOW) CID of Tamil Nadu Police.

A few financial firms were launched across the State in the guise of investing in stock markets, online trading and real estate business. They received investments from the public promising high returns.

Aarudhra Gold Trading Pvt. Ltd., LNS International Financial Services and Elfine E-Com Pvt. Ltd. are prominent among them and promised interests from 10% to 25% a month to the investors.  

T. Jayachandran, Superintendent of Police (SP), EOW CID Police, said these firms had appointed agents and held meetings with depositors at luxury hotels. The directors of firms made false promises.

Without any proper investment scheme, they made monthly payments to initial investors out of the money received as deposits. “It is generally a Ponzi scheme which is an investment fraud that pays existing investors with funds collected from new investors. These firms did not follow any RBI guidelines. However, they failed to pay returns or to return investment,” he said. 

Following complaints from depositors, the Economic Offences Wing registered a case under the provisions of IPC for cheating, criminal breach of trust and other offences under the provisions of Banning Unregulated Deposit Schemes Act, Reserve Bank of India Act and The Tamil Nadu Protection of Interests of Depositors Act, 1997. 

Searches conducted

The special wing conducted searches at 23 places, including Chennai, Kancheepuram and Tiruvallur in connection with the cheating by the directors of Aarudhra Gold besides arresting two directors Baskar and Mohan Babu in May.

Gold and silver articles, luxury cars and incriminating documents were seized. About ₹85 crore in 95 accounts held by its directors were frozen. 

The SP said 93,000 depositors lodged complaints against Aarudhra Gold Trading firm for cheating to the tune of ₹2,124 crore. He said 7,000 depositors invested with Elfine E-Com Pvt. Limited and the total amount could be ₹500 crore.

The EOW has registered a case and taken up investigation against LNS International Financial Services, Chennai, its directors and a few others. On August 5, searches were conducted on 21 premises in Chennai, Tiruvallur, Kancheepuram, Vellore, Ranipet, Erode and Coimbatore. 

The Superintendent of Police said it was found prima facie that LNS International Financial Services had collected deposits from the public promising 6% to 10% monthly interest. But the company did not pay any amount to its depositors. He said over one lakh people deposited money totalling ₹6,000 crore with this firm. 

Mr. Jayachandran said accounts of the defaulters had been frozen. Auditors were appointed to trace the money transactions and competent authorities will liquidate the properties and return the money to gullible depositors. 

Apart from these three firms, the EOW officials said over 164 financial firms defaulted in the last three years and cheated a cumulative amount of ₹1,162 crore. 

The aggrieved petitioners may contact the Investigation officer at for further information and to lodge their complaints. Citizens are advised to save/deposit their money only in approved financial institutions which were updated in RBI website.

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Printable version | Aug 10, 2022 8:50:38 pm |