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An all agency probe against Ponzi schemes in recent years has resulted in registration of 196 cases and arrest of 30 persons to protect the public from fraud.
The Central Bureau of Investigation has registered 100 cases against 132 firms from 2019 to June 30, 2022, and arrested 21 persons, Minister of State for Finance Pankaj Chaudhary told Lok Sabha in response to members’ queries.
Similarly, the Enforcement Directorate too has booked companies under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
"ED has investigated 87 cases related to Ponzi Schemes under the provisions of the PMLA during the last 3 years. Eight persons have been arrested by ED in this regard," the MoS told the Lower House.
During the last three years, the Ministry of Corporate Affairs sought a probe by the Serious Fraud Investigation Office in nine cases, five were handed over in 2019-20, one in 2020-21, and three in 2021-22, against 85 companies -- 36 in 2019-20, 16 in 2020-21, and 33 in 2021-22 -- which were allegedly involved in fraudulent chit fund, multi-level marketing (MLM) or ponzi activities, said the Minister. "No arrest has been made in this regard by SFIO," Chaudhary pointed out.
The Securities and Exchange Board of India has passed final orders against 29 unregistered Collective Investment Schemes (CIS) entities during the last four years (12 in 2018-19; 10 in 2019-20; 5 in 2020-21; and 2 in 2021-22), the MoS informed the parliamentarians.
The Sachet portal of the Reserve Bank of India, the online platform for State Level Coordination Committees which facilitates the public to lodge complaints of financial frauds, received 1,540 complaints related to non-repayment of deposits and money collected for various kinds of investment schemes (964 in 2020-21, and 576 in 2021-22), Chaudhary revealed.
Unregulated deposits
The Banning of Unregulated Deposit Schemes Act, 2019, contains comprehensive provisions in this regard prohibiting promoting, operating, issuing advertisements or accepting deposits in any Unregulated Deposit Scheme, and provisions for severe punishment and heavy pecuniary fines.
Picking up from the central government's initiative, the MoS exlpained that 29 States and Union Territories have passed Protection of Interest of Depositors Acts.
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