At Rs 3,726 Crore scam, it’s turning out into one of India’s biggest online scams.
NOIDA: A 26-year-old BTech graduate tricked more than 7 lakh people into giving him their money through a Ponzi scheme that promised big returns for hitting ‘likes’ online. The accused used to run a portal ‘socialtrade.biz’ under which an investor had to pay anything between Rs 5,750 to Rs 57,500 in the company’s account to become the member and earn Rs 5 per click.
In Two year, Anubhav Mittal’s Social Trade perpetrated a fraud of Rs 3,726 Crore. The police have arrested three people, identified as Er.Anubhav Mittal, 40-year-old Shridhar Prasad, an MBA, and 25-year-old Mahesh Dayal, who served as tech support — all in the board of directors of Ablaze Info Solutions Ltd.
The scheme operated through a maze of dubious URLs (online links) sent to mobile phone of subscribers that they were asked to click. These would sometimes be links to Facebook or Twitter accounts of other subscribers. A fake server was set up where these URl links would terminate.
What is a Ponzi scheme?
Socialtrade.biz was introduce in 2015 by Ablaze Info Solutions. The social media trading had four types of membership – Rs 5,700, Rs 11,500, Rs 2,8750, Rs 57,500. On the basis of which kind of membership you paid for, your username id was automatically generated.
Each member had to add atleast two more members. And that was how the chain constructed.
Members had to deposit the amount in company’s bank account. On the basis of the membership, users were given no. of clicks in a particular day. The company would in return pay Rs 5 for per click.
For people opting for a membership of Rs 5,700, only 10 ‘likes’ were allowed in a day which meant that person would earn Rs 50 per day. Similarly, membership of Rs 11,500, 20’likes’ were allowed, for Rs 28,750, 50 ‘likes’ and for Rs 57500, 75 ‘likes’ were allowed per day.
The company’s revenue model was such that the advertisement company would give Rs 6 to the company for per like out of which Rs 5 will be given to the member and Re 1 will go the company.
Most people did not receive the money they were promised and began complaining. Some went to the police. An FIR was registered at Surajpur police station, on Jan 31 and another FIR on Feb 1 at Phase III police station, Chhattisgarh. It emerged during the probe that around 1 lakh people had filed complaints on emails and text messages to Ablaze for non-payment of dues. The case was handed over to the STF(Special Task Force).
During the investigation they found that their business model was faulty. When a member signed in on their web page, the advertisement URL sent to them was incorrect. Sometimes the members would be clicking on the same URL without realising.
The company also kept changing its websites name, from socialtrade.biz to freehub.com, frenzzup.com, intmaart.com and 3w.com. This also created suspicion among investigators. The company had changed its name to throw enforcement agencies of its trail. The plan, according to the investigators, was to show loss in the coming 2 months.
The company’s server was taken on lease in Ghaziabad, Uttar Pradesh. A senior police officer said more than one lakh people have complained of non payment by the company.
While the company was showing TDS balance sheet was completely faulty, said a senior police officer.
“There are many MLM companies which work similarly. They request you to pay initial money to become a memeber and then give you some money in return so that you will tell about them to your family and friends and ask them to make an investment. Then they would stop paying after a few days,” he added.
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