In a shocking incident, a 26 year old, Noida – based B.Tech graduate has cheated more than six lakh people, in and around the Noida region, of Rs. 3700 crores! He cheated people by promising them big returns for hitting the ‘like’ button on a particular website. He told in messages sent to their phones that his company earns money if third persons hit the like button on a particular webpage and that his company would be willing to share its profit with those who hit the like button.
Some dubious URLs would be sent to people’s mobile phones and they would be requested to click it. Sometimes, cheekily, these links would lead to people’s Facebook or Twitter profiles. A fake server was setup where these links would terminate. This scam came to light when two people, in connection with this scam, were arrested on Thursday (02/02/2017). The arrested men include: 40 – year – old, Shridhar Prasad, an MBA post graduate and his aide, Mahesh Dayal, a 25 year old tech graduate, who provided technical support to Shridhar Prasad. The trio said that they were from a company called Ablaze Info Solutions Private Limited, which is fraudulent.
The police team, who raided the office of the fraudsters, found 250 passports belonging to the employees of the fraudsters! They were rewarded with a trip to Australia for the money that they got to the Company, by cheating lots of people. The police have so far recovered Rs. 520 crores deposited in Canara Bank, Kotak Mahindra Bank, Yes Bank and Axis Bank accounts. The police officials are investigating the company’s balance sheet, investors’ information and bank accounts to which money was transferred.
The Noida region has seen a series of call – center scams busted over the past few years but this is the first such Ponzi scam discovered. Buying likes is a practice employed by companies that want to look prestigious on social media. A Ponzi scheme is a fraudulent investment operation where the operator promises and pays initial investors short-term returns that are far higher or unusually consistent compared to other investment options available in the market; not from profit earned from legitimate business, but from new capital collected from newer investors, enticed by the promise of high returns. The scheme is named after Charles Ponzi, who became notorious for using the technique in the US in 1920, borrowing from an idea present in the novel: Charles Dickens’ Martin Chuzzlewit and Little Dorrit.
Investors of Ablaze Info Solutions Private Limited were told that the company got business from a third party to increase the latter’s online hits on digital platforms. The investors were given 25, 50, 75 or 125 URLs on their phones every day, based on their ‘subscription plan’J. The trio fooled people by telling that they could earn from home. The subscription fees for their website were Rs. 5,750, Rs. 11,500, Rs. 28,750 or Rs 57,500 depending on the user’s subscription planJ.
“The investors were given a user ID and password and told they would get random URLs on their phone and would be paid Rs. 5 per like”, Amit Pathak, senior superintendent of police said. The fraudsters rented a four – storey building in Sector 63 in Noida to execute the scam. The investors were told that they would get their monthly payments in their registered bank accounts. They were also told that if they brought in more subscribers within 21 days of joining, their income would increase substantially. This process was called a ‘booster’ and, like any other Ponzi scheme, helped build a pyramid of investors. Till date around 6.5 lakh innocent civilians had subscribed for the scheme.
As the number of subscribers soared, so did the risk of exposure of the scam. Many people did not receive the payment they were promised and began complaining. After a few months, some people filed an FIR at Surajpur police station on January 31st and another FIR was filed on February 1st at Phase III police station. The case was handed over to the STF. The police had found during the probe, that around one lakh ‘subscribers’ had sent emails and text messages to Ablaze Info Solutions Private Limited, complaining about non – payment of commissions.
“We found there was no business from any third party for getting online hits. The probe showed that the accused had set up a fake server in Ghaziabad and the URL links terminated on the same server”, Pathak said.
The trio had also changed the domain name of their website frequently to hoodwink the police. Their domain name initially was socialtrade.biz then it changed to freehub.com in December 25th 2016. Ten days later, it was changed again to intmart.com. Again on January 27th, the domain name was changed to frenzzup.com. The Company had paid a monthly rent of Rs. 7 lakhs for the office. Mitta took home a ‘salary’ of Rs. 5 lakhs a month while Shridhar took home a ‘salary’ Rs. 1 lakh a month. The police said that the ‘subscription money’ was the Company’s only source of income and that the Ponzi scheme was destined to come to light and fail once the people, who did not receive their ‘commission’, complained to the police. However, the initial investors of the company supported the company when police cracked down on it. “I invested Rs. 57,500 in the company and also got the return as promised. The police action is not good”, said Sanjeev Kumar, an investor. Later on he came to know, it was because the company had employed the Ponzi scheme!
Nothing in this world can be obtained without hard work. The things that are gotten through luck/windfall or illegal means will never last and will be gone one fine day. Hence, people should not be tempted by ‘easy money’ and fall prey to scams such as this one. Criminals are getting cleverer by the day and are beginning to commit high – tech crimes and scams. People should beware and safeguard themselves against these fraudsters. Read more on Startup News