“Give me your money and I will give you a fixed return every month.
Have you ever come across such statements? If yes, be alert, as a big Ponzi scam may be awaiting you.
Before discussing a specific case, let’s shed light on what a Ponzi scheme is. In this scheme, a fraudster creates a chain of investors and pays early investors with the money taken from new investors.
This scheme lures investors because scammers promise quick and easy money. To gain trust, they pay fixed returns every month, and once they have collected enough money from one group, they disappear with the capital.
One such case was reported in Kanpur, Uttar Pradesh, where a person ran a company named Swings Capital Pvt. Ltd (name changed). To appear authentic, he even created a website and mentioned a fake SEBI registration number on it.
He also had an app on the Play Store where users could see their investment amounts and return percentages. This left no doubt in the minds of innocent investors who were looking to grow their funds.
He approached people with a scheme, assuring them of a 5% return every month. People invested lakhs, and according to the data, more than 100 investors contributed to a total of ₹150 crores.
One of the victims, Yash (name changed), approached us with complete details of the case and how it all started.
Yash: Hello ADB, I want to discuss a case where a person fled with more than ₹150 crores of investors’ capital.
ADB: ₹150 crores? That’s a huge amount. How did it all start?
Yash: Sir, I live in Kanpur, and a friend told me about an investment scheme offering a 5% return on our capital every month.
ADB: A 5% return? Didn’t it raise a question in your mind about how it’s possible?
Yash: Yes, sir, I asked my friend the same question. He then showed me the website where the SEBI registration number was mentioned, and they claimed to provide PMS services.
ADB: Even if he was SEBI registered, he couldn’t guarantee returns, and for PMS, one must have a portfolio of at least ₹50 lakhs.
Yash: Sir, they even provided us with an app that we downloaded from the Play Store. We had no clue it was a scam.
ADB: How many people, according to you, invested?
Yash: Around 40 people known to me, with minimum investments of ₹1 lakh, and some even invested ₹15-20 lakhs. But the chain of investors is endless, and more than 100 people likely invested in his scheme.
ADB: Did you receive any returns on your investment?
Yash: Yes, sir, for the first few months, I received ₹25,000 returns on my ₹5,00,000 investment. But after January 2024, he stopped providing returns. When I asked him, he gave silly reasons, like losing a huge amount in stocks or his father’s illness.
ADB: Did anyone in your group receive returns after January?
Yash: No, sir. Although he stayed in regular contact, we later discovered he wasn’t SEBI registered and couldn’t guarantee returns or provide Portfolio Management Services.
Therefore, I and others in the group decided to file a complaint with SEBI to recover our money.
ADB: Okay, Yash, we will definitely help you file a complaint. But first, we need proper documentation with proof, including transaction details, any written commitments, and call recordings if available.
Yash: Yes, we have all the details.
ADB: We can document it properly, and since the person isn’t registered with SEBI, we can proceed by sending an email to SEBI.
In such cases, the higher the number of complaints against a person, the higher the chances of recovering losses and capital.
Yash: Thank you, sir. I will ask others to document their proof as well.
ADB: Sure!
Conclusion
This case highlights the critical importance to validate each and every detail when dealing with investment opportunities that promise high returns with little risk.
Ponzi schemes prey on the trust and greed of investors, leading to significant financial losses.
By raising awareness and encouraging victims to document their experiences and report them to authorities like SEBI, we can increase the chances of holding scammers accountable.
Collective action and vigilance are vital in protecting individuals from falling victim to such fraudulent schemes in the future.
