Odisha Ponzi Scheme: 2 Arrested by EOW for Running Ponzi Scheme Scam

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Odisha: The Economic Offences Wing (EOW) of the Odisha police has arrested two people from West Bengal for allegedly participating in a Ponzi scheme, with the money duped by them potentially exceeding Rs 1,000 crore.

EOW Busted Ponzi scheme in Odisha

Around 800 investors from Odisha’s Ganjam district filed a complaint alleging that they were duped into investing in 18football.com, a Ponzi scheme (multi-level marketing) run online under the guise of a football betting or gaming application.

The two accused were named as directors of a “shell” company, Hakim and Rustam Fabrics Private Limited, Kolkata’s Rustam Khan and Md. Hakim.

Investors were promised lucrative benefits such as a 3% daily compound return on investment, recharge bonus, referral bonus, extra bonus on downline members’ earnings, and salary bonuses with a daily withdrawal option.

According to the EOW, investors were required to open an account with ’18football.com’ either through an application or an offline referral link, and then bet money on certain football matches as specified on the website or app.

According to the investigating agency, investors were also provided with a so-called foreigner’mentor’ to assist them in betting, while mentors only communicated via telegram or Apps.

To promote and entice the innocent public, the fraudsters were engaging in promotional activities such as social work and charity in rural areas and giving it extensive publicity so that people would believe this scheme was legitimate.

According to the EOW, the fraudsters initially paid the promised return to the investors for a few days, but when the membership increased, they stopped making payments and closed the app ’18football.com’.

The investigation discovered that the scammers had used multiple shell companies or firms, as well as their directors, to route the stolen funds.

They also used mule accounts to confuse law enforcement agencies by layering money transactions. One of the companies was Kolkata-based Hakim and Rustam Fabrics Private Limited, whose directors included the two arrested fraudsters.

They admitted to receiving a small commission for running this sham company.

The accused admitted that they used to get orders from a man named Md. Sheikh Saifi in Dubai. So far, the EOW has examined 17 of the 150 bank accounts involved in this scheme. 108 crores in transactions have already been traced.

It is suspected that the amount of money involved in this scam could exceed Rs 1,000 crore.

Because the website was registered in Hong Kong but operated from Dubai, the investigators suspected it was a massive international scam. The EOW would work with other federal and state law enforcement agencies to uncover the scam.

Tips to Identify Ponzi Scheme

A. Higher returns and no risks: Anyone with mere or almost no knowledge about investments can still be clear about the risks that there are in this field. If a company claims higher returns and no risks that should be considered as a red flag.

B. Irregularities in paperwork: Issues with paperwork from the company’s end are also one of the very common red flags so it’s highly recommended to be sceptical when the company you’ve invested in fails to provide you with any paperwork.

C. Irregular Payments: People or companies involved in Ponzi Schemes often tell their investors to wait as they might get a huge profit if the payment is delayed.

D. Consistent Returns Offered: Investments are always subject to market risks. But fake investment sites always offer consistent high returns. 100% good is always bad.

E. Unlisted Investment:  Ponzi schemes typically involve investments that have not been registered with the seC or with state securities regulators.

F. Unlicensed Sellers: State securities laws require certain investment professionals and their firms to be licensed or registered. Many Ponzi schemes involve unlicensed individuals or unregistered firms. 

G. Investor Qualification Not Required: legit companies want serious investors, therefore, they follow due diligence to know their members. But on scam sites, investor qualification doesn’t matter.

H. Information Not Shared: fraudster never share their information. They hide their company name. The most they mention will some company’s certificate. This certificate is of no use, as it is not proof of legitimacy.

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