Mumbai's Economic Offences Wing (EOW) has launched a detailed investigation into a significant financial fraud case, where a share trader is accused of cheating investors out of a staggering Rs 13 crore. The accused allegedly lured victims by guaranteeing a lucrative monthly return of 4.5% on their investments.
The Modus Operandi of the Fraud
The case, initially registered at the Mulund police station, pertains to criminal activities that took place between January 24, 2022, and August 25, 2023. According to police sources, the fraud involved a total of 30 investors. The complaint was triggered by a 43-year-old businessman from Mulund, who stated that he invested a massive Rs 10 crore based on assurances from the accused, identified as B Gada (35), a resident of the eastern suburbs.
Gada reportedly convinced the complainant and others that he was actively trading in the stock market and would invest their funds there to generate high profits. Investors were drawn by the promise of consistent monthly returns on their capital.
Investigation Reveals Ponzi-Like Scheme
However, the investigation has uncovered a different story. A police officer involved in the probe revealed that the accused did not utilise the entire sum for share trading as promised. "He used a portion of it to give returns to investors and did not inform the investors about the losses suffered in the business. He took money into his account and used it to distribute among the investors as profit," the officer stated.
This method of using new investors' money to pay returns to earlier investors is characteristic of a Ponzi scheme. When the promised returns stopped materialising, the aggrieved investors collectively approached the police, leading to the registration of a First Information Report (FIR).
Ongoing Probe and Financial Scrutiny
The case has now been transferred to the specialized Economic Offences Wing for a deeper investigation. Investigators are currently examining the detailed financial records and bank transactions of the accused to trace the flow of the misappropriated funds and to collect concrete evidence supporting the allegations.
The EOW's probe aims to ascertain the full extent of the fraud, identify all assets purchased with the illicit funds, and build a watertight case for prosecution. This incident serves as a stark warning for investors to exercise extreme caution when approached with schemes offering unusually high and guaranteed returns.
