The State government has referred the ₹3,000-crore High Rich online Ponzi scheme, allegedly built on false claims and financial deception, to the Central Bureau of Investigation.
The case pertains to the finding that the financial firm’s partners had collected money from unsuspecting investors, promising them quick returns on non-existent investments.
The robbing Peter to pay Paul money-chain scheme hinged on the company’s illegal strategy to seek more investments on false grounds to pay earlier depositors. The elaborate scam left thousands of pensioners bereft of their life savings.
Sanjay Kaul, the head of Kerala’s Competent Authority for Enforcing the Banning of Unregulated Deposit Schemes (BUDS), had recommended that the CBI probe the case. On Monday, the government referred the case to the CBI on the State Police Chief’s recommendation based on Mr Kaul’s findings.
The Cherpu police in Kochi had taken cognisance of the scam after thousands of depositors thronged High Rich’s hastily emptied offices for their deposits.
The police had named K.D. Prathapan and his wife, Sreena Prathapan, promoters of High Rich Investments, the main suspects in the case.
They accused them of violating the Prize Chits and Money Circulation Schemes (Banning) Act. Most of the scam’s victims had fallen prey to its expansive online operations. The firm used the surreal promise of quick and big money on deposits to lure investors.
The police suspect that the accused had stashed away the bulk of their illegal profits in off-shore accounts and surreptitious investments in Dubai.
The police found that the firm had raised an estimated ₹750 crore from its High Rich Online Shoppe, an alleged front for an illegal money circulation scheme. The police suspect that the firm had cheated at least 1.5 lakh depositors.
Chief Minister Pinarayi Vijayan told the Assembly that the firm had collected at least ₹3,142 crore from depositors across Kerala and outside. The Enforcement Directorate is also investigating the suspected pyramid scheme. It arrested the promoters, who are now in judicial remand in a prison in Kochi.