A woman from Faridabad was cheated out of Rs 7 crore, a businessman from Noida lost Rs 9 crore, and a doctor from Punjab’s Bathinda was defrauded of Rs 6 crore. These are just a few of the victims of a massive scam recently uncovered by India’s Enforcement Directorate (ED). In a press release, the ED detailed how the fraudsters deceived victims using fake investment apps and links, siphoning millions of rupees. The stolen money was then funnelled abroad and converted into cryptocurrency. So far, five individuals have been arrested in connection with the scam, with Rs 25 crore in proceeds recovered.
How did the scam unfold?
The con began with scammers posting fake advertisements on social media platforms like Facebook, Instagram, and X (formerly Twitter). The victims were lured in with promises of abnormally high returns on stock market investments. In many cases, they were added to WhatsApp groups, such as “ICICI IR Team” and “GFSL Securities official Stock C 80,” where fake success stories were shared to build credibility.
Victims were instructed to download fraudulent apps that appeared to offer genuine investment opportunities. These apps, like IC ORGAN MAX and Techstars.shop, displayed names of well-known stocks and financial instruments to trick users into believing they were legitimate. For instance, in the Faridabad case, the victim transferred over Rs 7 crore through these apps, only to discover later that it was all a scam.
According to the ED, once victims installed the fake apps and invested their money, they initially saw good returns displayed on the dashboard, which encouraged them to invest more. However, these returns were purely fabricated numbers. When victims tried to withdraw their money, they were asked to pay additional charges like statutory taxes or brokerage fees. This was merely another ploy to extract more money from them.
As an ED official stated, “Once the fraudsters believed they had extracted as much money as possible, they cut off all communication and disappeared.”
How were funds siphoned off?
The scammers converted the stolen money into cryptocurrency and transferred it abroad to make tracking difficult. The ED’s investigation revealed that the fraudsters used multiple shell companies to launder the proceeds of the scam. These shell companies were often created using addresses of co-working spaces, and bank accounts linked to these companies were used to move funds through several intermediary accounts. The use of mule accounts helped to obscure the origin of the stolen money.
This case is only one of many scams that have occurred this year, with fraudsters across the country employing increasingly sophisticated methods to cheat people of their hard-earned money. Here are some other recent cases involving fake stock market trading schemes:
1. Fake stock brokerage racket busted in Ahmedabad (July 2024)
In July 2024, the Ahmedabad Police, in collaboration with the ED, uncovered a major fake stock brokerage scam that duped over 300 victims. The fraudsters operated a fake brokerage firm, convincing investors to put their savings into what they believed were blue-chip stocks. Instead, the money was funnelled into personal accounts.
After numerous complaints, the police investigated and arrested six individuals. The scam, which caused losses of around Rs 200 crore, involved the use of fake documents and company registration details to gain the trust of victims. During the operation, approximately Rs 50 crore was recovered.
2. Kolkata ponzi scheme in stock trading (August 2024)
In August 2024, the ED exposed a Ponzi scheme in Kolkata, masquerading as a stock trading investment platform. The fraudsters promised returns of up to 40%, luring thousands of investors. However, none of the funds were invested in the stock market; the money was merely circulated to pay earlier investors, while the organisers kept the rest.
The ED, with the help of forensic accountants, traced the money through a network of shell companies set up to hide their activities. The scam resulted in several arrests, and assets worth Rs 75 crore were seized.
3. Pune Day trading scam (June 2024)
In June 2024, the Pune Police and Cyber Crime Cell arrested a group involved in a fake day trading scheme. Targeting novice investors, the scammers used a platform designed to mirror real stock market data but manipulated it to display fake profits. This encouraged investors to pour in more money, which they ultimately lost when the platform shut down.
Over 150 investors were affected, with losses totalling Rs 30 crore. The police traced the fraudsters through digital footprints, leading to the arrest of the platform’s developers.
4. Fake share trading app scam (Mumbai, April 2024)
In April 2024, the Mumbai Police cyber cell arrested a group for running a fake share trading app scam. The group developed an app mimicking legitimate trading platforms and promised users high returns. Once victims deposited their money, the app showed falsified growth of stocks, but when they attempted to withdraw, their funds were inaccessible.
The police received numerous complaints and followed the digital trail to track down the fraudsters. Over 100 investors lost more than Rs 50 crore in the scam. One of the key accused, an IT professional, used sophisticated algorithms to make the app seem authentic.
5. Delhi stock trading fraud (February 2024)
In another case, the Delhi Police busted a fake stock trading racket where over 200 people were conned through fraudulent calls and online platforms. Posing as brokers, the fraudsters promised unrealistic returns on stock investments, only to siphon off the money into foreign bank accounts.
Following months of investigation, the police arrested five individuals involved in the scam, which spanned multiple states. Rs 30 crore was recovered during the raids.
Rising threat of cyber investment scams
According to a report by the Indian Cyber Crime Coordination Centre (I4C) in May, Indians lost over Rs 14,000 crore to such cyber scams in 2024 alone. These schemes often involve fake apps, WhatsApp groups, and fraudulent platforms designed to mimic legitimate financial services, making it difficult for victims to differentiate between real and fake investments.
How can you protect yourself from these scams?
The I4C offers the following tips to avoid falling prey to cyber investment frauds:
— Be sceptical of unsolicited messages offering quick money through online investments.
— Avoid job offers or investment opportunities that promise unrealistic returns.
— Never send money to anyone promising high-paying tasks or investments.
— Verify the legitimacy of job offers and investment platforms through official websites or apps.
— Do not share login credentials, personal, or financial information with strangers, especially on messaging apps.
— Avoid downloading unknown apps or files at the request of unfamiliar contacts.
— Report cyber fraud incidents to the https://www.cybercrime.gov.in or call 1930 for assistance.
