Odisha EOW busts Rs 1,000 crore pan-India Ponzi scam

The Economic Offences Wing of Odisha police busted a major Ponzi scam to the tune of Rs 1,000 crore spread across the country with arresting one of the operators on the charge of having deceived more than Rs 92 lakh lifetime savings of a senior citizen.

The accused Pratap Kumar Rout, who operated as Hedgex Fund LLP was arrested from Cuttack and was remanded to judicial custody under relevant sections of Indian Penal Code sections, Prize Chits and Money Circulation Schemes (Banning) Act, Information Technology Act and Banning of Unregulated Deposit Schemes Act.

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The EOW swung into action following complaint lodged by Bijay Kumar Panigrahy, a senior citizen, who lost Rs 92,60,480 (Rs 92.60 lakh) after investing Hedgex Fund LLP after the local coordinator Rout pledged him of getting 11% to 18% interest return of the savings.

The modus operandi of the fraud is comparably to other Ponzi schemes floated in the market wherein initially, small periodic returns were paid out to depositors to build credibility and attract huge deposits. Subsequently, the operators abruptly shut down operations; deactivated communication channels, and became unreachable thereby misappropriating the depositor’s funds

. In this case, depositors were repeatedly assured by the accused Rout that their money was safe and that normal functioning of the LLP would resume shortly.

Investigation made so far reveals that the company was registered with ROC, Goa in the year 2023. However, its depositors’ base spread to 10 states namely Andhra Pradesh, West Bengal, Assam, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat, Tamil Nadu, Delhi and Odisha, involving more than 3 lakh depositors.

The defrauded amount by the company is believed to be more than Rs 1000 crore. In Odisha, there are more than 12, 000 depositors and the defrauded amount is estimated at Rs 139 crores.

The Hedgex floated a number of sister concerns namely Kaushalaya Foundation, Lavya world, Frix Market Lavya International etc. within two years i.e. 2023-2024 to defraud the depositors.

The Designated partners and other top leaders including the present arrested accused used multiple mule and third-party accounts to confuse the law enforcement agencies and to camouflage their involvement. Hawala agents were engaged to collect crores of rupees in cash and the collected cash was handled by the accused Pratap Kumar Rout, EOW added.