AHMEDABAD: In a new twist in the country’s first case of bitcoin extortion, the Gujarat Criminal Investigation Department (CID) has booked a Surat-based builder for allegedly extorting over ₹155 crore in cash and bitcoins from two persons.
Earlier, the builder and realtor, Shailesh Bhatt, was the complainant in a bitcoin extortion case in which bitcoins worth ₹9 crore were extorted from him by the Amreli police. The police have arrested Amreli Superintendent of Police Jagdish Patel while a former BJP legislator Nalin Kotadia is on the run.
In his complaint, Mr. Bhatt had alleged that some Amreli policemen extorted “bitcoins worth ₹9 crore” from him four months back when he was abducted and beaten by the cops.
ADVERTISEMENT
“While probing the case, we learnt that Mr Bhatt himself was an extortionist, as he had extorted bitcoins worth ₹155 from others before he himself became a victim when he was kidnapped by the Amreli police,” CID (Crime) chief Ashish Bhatia told reporters on Monday when he announced lodging of a new case to book the complainant and others.
“Around two years ago, one Satish Kumbhani of Surat floated a company called Bit Connect and lured people like Bhatt to invest in it to get huge returns in a short time. Bhatt had invested ₹2 crore in it. However, its promoters shut shop in January this year and went underground,” said Mr. Bhatia.
To recover his investment, Mr. Bhatt’s accomplices first kidnapped Piyush Savalia by posing as Income Tax officials, as Mr. Savalia used to work for that company. Mr. Savalia was confined in a farm house at gun-point for three days in January-end.
ADVERTISEMENT
“On February 1, Bhatt's men kidnapped Dhaval Mavani at gun-point, as the latter was also attached with the bankrupt firm. Bhatt’s accomplices forced Mavani to transfer 2,256 bitcoins worth ₹131 crore into their account. The builder and his accomplices had also transferred another 166 bitcoins worth ₹9.64 crore into their account,” Mr. Bhatia said, sharing details of how Mr. Bhatt and his aides were running an underworld type extortion racket in Surat where people turned to virtual currencies to convert their black money during and after demonetisation.
To set Mr. Mavani free, Bhatt and his accomplices also extorted ₹14.50 crore cash, which the builder received through the ‘Angadia’ service (an unofficial cash courier service), he said.
“Bhatt and his accomplices extorted bitcoins and cash worth a total of ₹155.21 crore. Later, they distributed the bitcoins among themselves. Bhatt had kept around 700 bitcoins,” the CID official said.
Since Mr. Bhatt was not tech-ssavvy, he took the help of his nephew Nikunj Bhatt to transfer those bitcoins into his virtual wallet. The CID (crime) has arrested Nikunj.
The entire conspiracy was unearthed when Mr. Savalia was questioned by the CID recently after the arrest of Amreli SP and Police Inspector Anant Patel and Mr. Bhatt’s business partner Kirit Paladia.
Mr Bhatia added that the bitcoin extortion racket was set to get bigger as more people who invested in the hope of making quick bucks became victims of organised racket.