Thane police register FIR against Sri Mahakali Group for illegal crypto-currency schemes

MUMBAI: The Thane police have registered a First Information Report (FIR) against a Ponzi investment firm Sri Mahakali Group of Companies at the Shree Nagar police station for fraudulent investment schemes prohibited by law, offering unreasonable returns and promise to double or triple the investment within few months. ALSO READ: UN trade body calls for halting cryptocurrency rise in developing countries

The FIR was registered under IPC sections for cheating, criminal breach of trust and other offences and the police are investigating the case. Sources claim the case could be transferred to the Thane Crime Branch as more victims come forward to file complaints against Group Companies, including SM Trade, Shree Mahakali Trade and others, all promoted by one or two individuals. ALSO READ: China declares all cryptocurrency transactions illegal

A PTI news report said no person has been arrested in the case yet as the police are recording statements of witnesses.

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According to the complainants the firm allegedly promised high returns through investments in, among other things, crypto currencies, Futures & Options, trading in Bitcoin, etc., but failed to generate returns or even repay the principal amount to its investors, most of them middle class individuals.

PTI quoted police officials as saying that the FIR mentioned an NSE circular of September 2021 which stated that ”an entity named SM Trade/Shree Mahakali Trade…is collecting funds from general public through various assured/guaranteed return schemes/in stock market” and ”investors are advised not to subscribe to any assured/guaranteed return scheme/s offered by aforesaid entity in stock market as the same is prohibited by law.”

After investors were made aware of the NSE circular, some of them approached the police, the official said, adding that a detailed investigation is underway.

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The police are likely to add further criminal sections pertaining to investor protection, dealing in Ponzi schemes, criminal conspiracy, etc., as the probe progresses.

Sources revealed that thousands of investors were defrauded of varying amounts by the company, which used different names and identities to operate and induce middle-class individuals to invest their hard-earned money into their fraudulent schemes. ALSO READ: Investors cheated by Sri Mahakali Group, SM Trade aka Shree Mahakali Trade aka Kreaz Life 

The total amount involved in the scam could be in the range of nearly Rs 10-15 crore, as per initial estimates. Many investors are reluctant to come forward and register complaints, a source said.

Another source claimed the total amount involved in the con game could be in excess of Rs 50 crore.

The firm used different names and brands to lure investors including SM Trade (Shree Mahakali Trade), promising huge returns on investment. ALSO READ: Sri Mahakali Group aka SM Trade promoter Ritesh Panchal alias Sikligar invested heavily in real estate

According to investment watchdog website MoneyLife, SM Trade is allegedly operated by Ritesh Panchal aka Ritesh Sikligar who claims to deal in stock market trading and trades in Futures to make money, using Options to hedge and insure his investment. ALSO READ: Sri Mahakali Group aka SM Trade had agents in Goa, Karnataka, MP, Gujarat and UP

SM Trade and Panchal lured several retired people, mainly from the Indian Institute of Technology (IIT Bombay), Powai locality and nearby areas under the pretext of giving good returns on investments. The firm operated in the Thane area under a similar name.

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Panchal allegedly also operates a company Kreaz Life, offering more than 1000 times the principal investment amount in a period of 3 to 6 months.

According to MoneyLife, Panchal claims to have his own brokerage and partnership with Samco and Upstox.

Another company Afflux Capital located at Naupada in Thane, is also under the police scanner. An associate of Panchal, Mohan Patil who lured investors to pay varying sums to SM Trade is named as an accused by several complainants. ALSO READ: SM Trade aka Sri Mahakali Group scam could exceed Rs 100 crore

Patil and Panchal created a chain of investors or agents similar to a Ponzi scheme promising to triple or quadruple their investments in a matter of months.

Panchal is involved in Paiselogy, a multi-level marketing (MLM) Ponzi scheme as well as Smart Trade and Ovule, which deal in cash Futures & Options (F&O) and everything is done only in cash, similar to Dabba Trading. (Read More Here)

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