It’s Election time in Maharashtra. What else could be the most appropriate time to expose financial scams involving members of different political parties?
The involvement of party representatives in scams sparks controversy in elections and can turn the game on any side.
Amidst the elections in Maharastra, a similar case came to light involving a Bitcoin scam from 2018. The amount involved is now alleged to have been used by the party representatives in the election campaign.
Uncovering the SCAM
Amid of Maharashtra election, the Ponzi scheme came into the limelight. This scheme used Bitcoin investment claiming huge returns on investment to victims.
The scam uncovered Around 80,000 bitcoins. Those bitcoins were used to divert funds worth ₹6,606 crore through nine overseas firms to purchase properties abroad.
As per CBI investigation, Six people have been charged for running this scam. All six suspects are accused of collecting ₹6,600 crores in Bitcoins from the public under the “false promise” of a 10% monthly return.
Former IPS officer Ravindranath Patil, further alleged that he has recordings of NCP(SP) MP Supriya Sule and Maharashtra Congress Chief Nana Patole directing to convert the Bitcoins into cash and using it to fund Election campaigns in Maharashtra.
In 2018 More than 40 cases were registered against GainBitcoin and its affiliates regarding the Bitcoin Ponzi scheme scam. In March 2022 Pune police arrested Patil and Ghode both investigating officers on the charges of misappropriating Bitcoins during the 2018 investigation.
Two cryptocurrency investigation cases are part of this controversy.
One happened in 2018, when Patil worked as a forensic expert, and the other in 2022 when Patil was himself accused of being involved in diverting funds from seized Bitcoins to his account.
Both Sule and Patole have denied all the allegations, and seeking legal help to come out of the political controversy. Moreover, they too agreed to cooperate during the investigation.
How Was the Scam Executed?
The journey of the scam started in 2017 when all the six accused started a company named Variable Tech Pvt Ltd. The company used to deal in online trading platforms in cryptocurrency.
They hired various agents, who brought investors for bitcoin investment. Here’s how the scam was carried out:
- Unrealistic return promises to the investors: Victims were offered 10-15% monthly profits at an unreasonable profit margin.
- Used fake platforms: The accused set up fraudulent cryptocurrency platforms that looked legitimate while operating. They used the Ponzi scheme, where funds from new investors were used to pay returns to old ones.
- Multi-level Marketing: They used multi-level marketing to expand their reach. Existing investors were promised additional bonuses and commissions on bringing new investors to the business.
- Destroying Evidence: As soon as the fraud began to break down, the accused destroyed the evidence. He shut down the fake websites and erased all of the connected records.
- Political and Financial Connections: The time of the scam and its association with funding the election campaign in Maharashtra raised questions about its political connections. Disclosure of audio recordings of some influential politicians of Maharastra made it more evident about political involvement.
- High-Tech Manipulation: The accused took advantage of Bitcoin’s complexity, making it difficult for victims to understand their investments. They used multiple wallets and exchanges, making traceability difficult.
What Was Done With Investors’ Money?
- The promoters “cheated” the investors and had been hiding the “ill-gotten” Bitcoins in secret online wallets.
- The Bitcoins were intended to be used for mining, and investors were supposed to receive enormous returns in cryptocurrency assets.
What Evidence does Patil Have to Prove his Claims?
- Expert witness of the case: According to Patil, the expert witness Gaurav Mehta approached him. Gaurav disclosed that in 2018, police officers swapped money using the seized Bitcoin wallet. He acknowledged selling Bitcoin abroad and sending the money to Patole and Sule for the Lok Sabha and State Assembly elections.
- Voice notes and details: This proof also showed that misappropriated bitcoins were traded. The capital was then used to fund the Maharashtra elections through the Hawala route.
How Does this Case Impact the Elections?
- Shift in public opinion: Involvement of the political figures in the case can set a different election narrative. It can further influence the opinion of the public towards them.
- Loose public trust: Involvement in such fraudulent activities could seriously affect public trust in political figures and parties they represent. The public might view the candidate as a defaulter and avoid him.
- Legal and Electoral Delays: The possibility of involvement of the political figures in the scam may involve legal investigation which can lead to delays in the election process.
- Distraction from main issues: Scams could divert attention from major election issues and give new points for allegations to the opposition.
What Red Flags Investors Should Have Looked For?
- Too good to be true returns: Promise of 10-15% of monthly returns
- Use of multi-level marketing: Luring existing investors to bring new investors for additional profits and bonuses.
- Sudden shutdown of platforms: Investors found that their accounts suddenly disappeared from the platforms and no traces of any record were there.
Conclusion
The Maharashtra Bitcoin scam is again an eye-opener for many individuals who are still blindly investing in cryptocurrency platforms and ignoring all the possible red flags that could lead to a scam.
The involvement of influential political and public figures reveals the possibility of political and financial support to such scammers.
Though Financial freedom is offered by digital currencies, frauds like this highlight the importance of regulation and vigilance of such scams. This case also highlights that apart from protecting the investors from these scams, it is time to protect the democratic process as well.
