Hundreds lose Rs 7 crore in ponzi scheme, 6 booked

SURAT: The Mahidharpura police booked six persons on Tuesday for alleged cheating hundreds of people of Rs 6.94 crore by luring them into investing into a

multi-level marketing

scheme with high returns.


Police booked Nandlal Keshar Singh, chairman of Phenomenal Health Care Services Limited, TMS Nair, vice-chairman; M K Singh, managing director; Prabhakar Mishra, Gujarat zone MD; all residents of Mumbai. Ramjivan Shukla and Amarnath Tiwari, residents of

Vapi

and director of Gujarat zone, were also booked for cheating.

The accused were booked under

Indian Penal Code

Sections 406 (criminal breach of trust), 409 (criminal breach of trust by banker or agent), 420 (cheating) and others. They were also booked under The Prize Chits and Money Circulation Scheme (Banning) Act and The Gujarat Protection of Interest of Depositors (In financial establishments) Act.

The complaint was lodged by Ramnayan Pande (47), a property broker and resident of Sachin. Majority of the victims for the fraud are migrants who have settled in the city in past few years, said police. Cops are yet to make arrests in the case.

Around 25 agents of the firm floated by the accused have contacted police so far and cops suspect that the number of victims of the fraud could rise.

The accused had an office at Belgium Square near railway station and the fraud was carried out between 2008 and 2017. The accused first floated Phenomenal Health Care Services Limited and held meetings with agents. “They offered health insurance and six similar schemes. Along with the health benefits the accused assured double return on investment after nine years,” said a police officer at Mahidharpura police station.

Head office of the company was stated to be in Mumbai with branches in different cities. The accused also held meetings of the agents and investors in different cities of the country and abroad as well.

The members were encouraged to get new investors to earn commission. After success of the first company the accused floated other four companies like Phenomenal Industries Limited, Phenomenal Health Care Gujarat Private Limited, SNK Corporation Limited and Gujarat Pheno Health Care Pvt Ltd.

Those who started investing money since launch of the scheme in 2008 approached the company office in 2017 to claim the maturity amount. But the company officials had disappeared and this is when they realized that they were duped.

“An offence has also been registered in Andhra Pradesh against the company and we are trying to get details of the offence,” said police.