Sunday, September 22, 2013

Frauds harvest city con fields

MUMBAI: A Red Corner Notice has been issued against a white-collar criminal who along with his wife and four others duped over 3,000 gullible investors to the tune of over Rs 40 crore by offering them unbelievable returns. The notice seeks the arrest of the accused, Sandeep Kandalkar, who is believed to have left the country. Kandalkar, along with his wife Lina and four others, floated a scheme that promised investors over 100% returns and an Indigo car at the end of five years. Lina is still at large. One of the other accused Shantaram Naik was an employee of MTNL.

According to the Economic Offences Wing (EOW) of the city police, the fraudsters had distributed around Rs 13.5 lakh to the investors. The police have seized Rs 50 lakh, and attached several of their properties across the city. In his complaint, one of the investors, businessman Kailash Gonge, said he was lured into the scheme by a Sunil Mhatre who introduced him to Naik. The latter boasted about his clout and claimed to be a partner in four companies along with Kandalkar.

On an investment of Rs 1.6 lakh, they offered him a maximum return of Rs 25,000 every month for five years. On completion of one year of the investment, Gonge was promised that an Indigo car would be purchased in his name. He was told that the vehicle would be handed over to him at the end of five years.

Gonge and his wife invested Rs 6 lakh and spread the word. In fact, acting on his advice, Gonge's friends invested a total of Rs 54 lakh. For a few months, Gonge got his returns, but later the cheques began to bounce. The conmen initially covered their tracks and told Gonge that their funds, which were they were expecting, had "got stuck". One fine day, their offices were shut and investors were left in the lurch.

There have been numerous instances in the past where fly-by-night operators have been luring the public to invest in such schemes. "Despite exhorting people to refrain from investing in such companies, they continue to flourish," a police officer said. People do not realise that a business module offering such huge returns are not viable. "For instance, if a company offers a 50% interest as returns on investments, it should be earning 300% to offer such gains in the first place. People should use their common sense before falling prey to such schemes," said the police officer said.

The investors that prey on Mumbaikars include both the rich and the poor, and it's sheer greed that lures the public into such schemes. "If my earning is meagre and if these companies are offering me fantastic returns, I will certainly be interested. This is to ensure my family's future," said one investor. White-collar crime is the crime of the future, says joint commissioner of police, Rakesh Maria. "When we learn of such cases, we verify them and take action," he said.

In April 2009, the state had enacted the Maharashtra Protection of Interests of Depositors (in financial establishments) Act, when a plethora of plantation companies vanished after collecting money from public. The Bombay High Court, in September 2005, struck down the Act after several companies challenged the legislative competence of the state to enact it. One of the Act's salient features was that the properties could be auctioned off and the proceeds used to return the investments. The state has now approached the Supreme Court in an appeal and the matter is still pending. After the high court struck down the act in September 5 2005, all cheating cases went into a limbo as the HC had ordered a stay on the trial.

The RBI has also expressed its helplessness saying that these companies do not fall under the category of Non-banking Financial Companies, which they are empowered to regulate. The money collected by such companies cannot be termed as a deposit, thereby preventing the RBI from intervening and taking action.

An easy ride
In 2007, Aim Limouzines floated a car-rental investment scheme, where investors were asked to invest anywhere between
Rs 85,000 and Rs 3.2 lakh. They were told the money would be used to buy cars, which would be transferred in their names after a few years. During this period, the company promised monthly returns of Rs 6,000-12,000. Over 2,000 people across India invested in the company, which allegedly stopped payments to many of them. The Economic Offences Wing, Mumbai, has frozen 11 bank accounts, and the Hyderabad police recently arrested a company official

The Gandhi connection
Ejaz Ahmed Khan (29) conned eight people in Mumbra of Rs 40 lakh by claiming acquaintance to no less a person than the Father of the Nation, Mahatma Gandhi. Khan, now on bail, morphed a photograph showing Gandhi resting his hands on his shoulders before attending a meeting with a British general in 1945. The copies of this photograph were widely circulated in Mumbra and eight people fell prey to this smooth-talking conman. They lent him the money to set up a computer business

From Rs 3,000 to Rs 3L
In Thane, Shivaji Kamble, who ran a vada-paav stall, made off with Rs 18 crores that he was able to collect from over 32,000 people after promising them high returns. Kamble, who floated Maharashtra Marketing Golden Holidays, promised investors Rs 3 lakh at the end of one year on an investment of Rs 3,000. The matter is pending in the court

Double or nothing
Powai-based Kaustubh Choksi (31) and his six accomplices offered 1,100 investors a chance to double their investments in just 20 days. Choksi collected Rs 3.14 crore in a short period. He claimed to have used the money to revive his company, which had been hit by the economic downturn. The accused are currently in judicial custody

Two-hour investment
A 30-year-old college lecturer from Thane, Arvind Ojha, conned people by offering them returns of Rs 45,000 in 2 to 3 hours. He asked the public to register online after paying a nominal amount of Rs 500. Each member was provided a business kit and asked to enrol at least five others. The returns they got, he told them, would depend on the number of people they managed to rope in. Ojha is currently out on bail
Text by Nitin Yeshwantrao & V Narayan
C Unnikrishnan, TNN Nov 4, 2009, 03.27am IST

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