57,904 investors lost 368 crores within 1,519 days

Nagpur is fast becoming a hub for floating fraudulent financial schemes and swindlers who dupe gullible investors and then simply vanish into thin air leaving thousands of people in a lurch. In a shocking revelation, the investigating machinery has confirmed that a whopping 57,904 investors have been duped by fraudsters to the tune of Rs 3,68,37,89,989 /- within 1,519 days (four year and two months) across the city. The police have managed to recover Rs 1,47,45,50,934/- from the economic offenders that is barely 40 per cent of the total amount lost. 

City Police in its reply to an RTI query filed by activist Abhay Kolarkar informed that a total of 75 economic offences were registered in the city from January 1, 2015 to February 28, 2019. Of them, 12 offences were related to the banks. The police have arrested 138 persons including scamsters and office- bearers of Arvind Cooperative Bank, Elina Employment Resources Firm, Wasankar Wealth Management Ltd, Shikshak Sahkari Bank, VV Investment Ltd, Venus FX Company, Saiprakash Development Ltd, Qnet Science, Dhokeshwar Multi-state Urban Cooperative credit society, Vermicopompst project, Samruddhi Jeevan Multi Purpose Co-Op society. Along with these, the police have also filed cases pertaining to Bitcoin scam and various bogus share market schemes. 

A police officer said that even the promoters of such schemes always create third party interests over all the movable and immovable properties owned by them so that the money of the gullible investors could not be recovered.

From last one decade, Pramod Agrawal of Mahadeo Land Developers, Jayant and Varsha Zambre of J S Financial Services, Sameer Joshi of Shree Surya, Raviraj group and now Wasankar Wealth Management Group, the script is more or less same. Lure of high returns, flashy promotions, impressing initial investors by showering them with gifts and promised returns, the modus operandi is strikingly identical, yet every time they are able to dupe investors.  In every case, hundreds of crores have been swallowed by scamsters without leaving any money trail. 

Why people fell prey to scamsters ? 

Despite apparently unbelievable claims made by such fly-by-night scamsters, why so many people invest their hard-earned money in such schemes ? According to experts, the smooth operations by such financial wizkids rarely evoke suspicion as they are able to market their schemes so effectively. Initially, they make it a point to honour the commitment. The beneficiaries become brand ambassadors and often promote such schemes within his family and friends. This effective publicity and seemingly legitimate nature of the operations then create a mass hysteria and people repose faith in such investment Gurus hoping that he will deliver and multiply their money in record time. 

Lethargy of investigating machinery and regulatory bodies to crack the whip before things go out of hands, is another reason, as to why such schemes run for fairly long period. A basic check about valid permissions from the SEBI or RBI to collect money or invest in stock market, could have prevented most of the scams right in the initial phase. But lure of fast money, financial illiteracy and apathy by regulators also helped the scamsters in amassing huge money and once the bubble pricked, the whole thing came crashing down. 

Though Wasankar Group was in news for all the wrong reasons since last few months and it came to fore that even basic statutory norms were being brazenly violated, the regulating agencies did precious little, giving lot of chance to the group to either park the collected money or tweak the documents to dilute their liability. 

The track-record of authorities in auctioning the properties of scamsters is quite dismal. Under MPID the properties can be swiftly attached, trial can be conducted in special MPID court and ill-gotten money transferred to any third party can also be recovered. But very often, the fraudsters are able to stall the proceedings due to very complex nature of operations. After some time, the scamsters walk out of jail and resume their fraudulent activities by floating another company promising high return in very short span type scheme to attract innocent investors. 

MPID Act a ray of hope for common man 

On December 16, 1999, the Maharashtra Legislative Assembly passed a bill -- Maharashtra Protection of Depositors Interest Act (MPID) -- to protect the interests of depositors of the financial establishments. Soon after the bill came into force, the law enforcement agency have booked many fraudsters under the act which delegated sufficient powers to the government for the attachment of properties of those financial establishments which have failed to return the deposit after maturity or on demand by the depositor, to pay interest or other assured benefit.

In a case filed in the year 2003, accused Ravindra Shankar Bajanghate, his wife Sarita, both residents of Hanuman Nagar and Jugalkishore Sonbhadre, a resident of Sudampur were acquitted by the court. The accused were running Shivalaya Housing Finance and Investment Company Ltd and they used to allure people for making investment in their company giving promises of attractive interest on the deposits. However, the prosecution failed to prove the accused guilty in the court. 

In ‘Grow Line trade Pvt Ltd’ scam, four persons were charged under MPID act and Section 420, 406 and 34 of IPC were applied for duping almost 1,500 depositors. The accused were Rajesh Rammurti Pande, a resident of Chandra Nagar, Vinod Jamnaprasad Gupta, a resident of Namdeo Nagar, near Shanti Nagar, Jarnelsingh Rajendrasingh Gour,  a resident of Mehandibagh Power House and Sanjay Maroti Ramteke,  a resident of Rani Durgawati Chowk. These persons had floated the company and collected Rs 2,200/- each from thousands of investors. The directors failed to refund their amount along with the assured benefits and therefore, Suman Shende lodged a complaint against them. After 10 tears long court proceeding, the prosecution failed to prove guilt of the accused and the court acquitted them from all charges. 

In the year 2006, only single case was registered under MPID and it was decided in year 2015. Accused Gautam Chudaman Meshram, a resident of Chicholi (Khaparkheda) and director of ‘Needs of India’ company was acquitted.

The act was not in force from year 2007 and it came to force again in the year 2010. One case was registered in the year 2010 and two, three and six cases were registered in the year 2012, 2013, 2014  respectively. The cases are yet to be decided in the court and investors are waiting for the justice.

Considerable rise of registration of MPID cases was seen in the years 2015 and 2016. Six out of total seven were decided by the special court in the year 2015. In year 2016 total four case were decided by the court out of 13 cases.

15,000 investors duped of Rs 4,000 crore from year 2011 to year 2016 

Around 15,000 investors lost more than an estimated Rs 4,000/- crore between 2011-16 when such schemes were flourishing in every nook and corner. First, balloon of lucrative returns was burst in the year 2011 when scam of Mahadeo Land Developers and Kalamna society’s scam was unearthed and Director Pramod Agrawal was arrested. Maximum investors in the society were daily wage workers. At a single shot, Agrawal duped almost four thousand investors to the tune of Rs 500 crores. Agrawal is now cooling heels behind bars and investors are waiting to get back their hard-earned money. 

Another big scam by Varsha and Jayant Zambre came to fore in the year 2012. The couple duped more than 600 investors through their fraudulent JS Finance and services. 

In year 2013, Shreesurya scam surfaced, sending shockwaves among their middle-class and mostly Maharashtrian investors. Sameer and Pallavi Joshi have been named as the prime accused in the multi-crore scam. They have been charged with duping thousands of gullible investors to the tune of over Rs 1,000/- crores.

Despite of these major scams, thousands of government employees, businessmen continued their investment in the Wasankar Wealth Management Pvt Ltd. Wasankar suddenly stopped giving returns to the investors in second half of year 2013 and first police complaint was filed against Prashant Wasankar by builder Vivek Pathak. Economic Offences Wing (EoW) booked and arrested him under MPID Act in May 2014. 

It was the biggest scam in the city’s history. According to a rough estimate, Wasankar and his accomplices had duped thousands of investors to the tune of Rs 2,000 crore. However, only 700 formal complaints have been received by the EoW as many investors are believed to have parked their unaccounted money in the schemes. As a result, the quantum of money lost reported to EoW is believed to be only a fraction of money actually parked by other investors, who have maintained a stoic silence. Many investors lost their money in Aman and Rajeshri Hemani scam of Rs 300/- crore and the Nagpur District Central Cooperative Bank scam of Rs 175/- crore.