Tag: Karnataka Ponzi scheme scam

The attached immovable properties, valued at Rs 34.21 crore, are in the form of land, office spaces and residential flats in various places in Bengaluru and the movable assets are in the form of bank balance and fixed deposits worth Rs 1.49 crore, the ED said.

According to the official statement of ED, it initiated a money-laundering investigation based on an FIR dated March 3, 2018, registered by Banashankari police station, Bengaluru, against partners and associates of Vikram Investments — Raghavendra Srinath, KP Narasimhamurthy, M Prahlada, KC Nagaraj and Sutram Suresh — for allegedly cheating the general public by luring them to invest money promising high returns.

The modus operandi adopted by the company was that they were involved in collecting investments from customers on the pretext of commodity trading, offering huge returns; up to 30-35 per cent interest annually. However, they were not registered with any of the regulatory agencies including RBI. They ensured that customers would get back their first instalment as promised. This earned them trust and lured customers to invest more money after which the company stopped paying them back any money, including the principal amount.

High-profile personalities also invested in this scheme in the hope of earning huge returns. Initially, the company paid profits to the existing investors out of funds obtained from its new investors. The company used LIC agents and others who would convince their friends and family to invest and in exchange get a heavy commission.

Initial investigations suggest that around 2,420 persons had invested in the said entity and the total investment was around Rs 417 crore, out of which around Rs 331 crore was paid to the clients as profits and the remaining Rs 86 crore was embezzled by Raghavendra Srinath and his associates.

During the investigation, it came to notice that Raghavendra Srinath had deliberately delivered an exceptionally huge amount of net profit of around Rs 35 crore to one R Krishna which was not possible in any prudent way. Further investigation is in progress.