New Delhi [India], June 15 The Enforcement Directorate's ongoing investigation into Himachal Pradesh's cryptocurrency-based MLM scheme case has revealed a fraudulent amount of Rs 500 crore by fugitive kingpin of the case, Subhash Sharma, defrauding more than 2.48 lakh investors.
ED's revelation was based on recovered data that was deleted by the accused and their associates to conceal their activities.
"This criminal nexus then carried out layering by routing the funds through numerous accounts, fictitious firms, and intermediaries, and by converting a portion into cryptocurrency to obscure the audit trail, ED said in a statement.
After the scam came to light, ED said, Sharma reportedly fled to Dubai in an attempt to evade prosecution. "Further, it is revealed that funds collected from investors were routed to Vijay Kumar Juneja and Masoom Juneja."
In a fresh move, the federal agency's Shimla zonal office on Monday conducted search operations at the premises of Vijay Juneja and Masoom Juneja under Section 17(1) of the Prevention of Money Laundering Act (PMLA), 2002, in the cryptocurrency fraud scam, which led to the recovery of incriminating documents and digital devices, which are evidence in the instant case.
ED said it initiated an investigation on the basis of FIRs registered by Himachal Pradesh and Punjab Police against Subhash Sharma and others.
The agency further said its investigation revealed that Subhash Sharma, in connivance with co-accused, including Hem Raj, Sukhdev Thakur, Abhishek Sharma, and Radhika Sharma, launched a cryptocurrency-based MLM scheme in 2018 through an online platform to enable controlled operations and large-scale investor enrolment.
"The platform was later shifted to foreign servers (Digital Ocean) and operated through domains such as korvio.io and voscrow.com to run the scheme. The accused induced public investment in Korvio Coin (KRO) by promising assured high returns, conducting misleading seminars, manipulating token values, and introducing new tokens to sustain a Ponzi structure, wherein funds from new investors were used to pay earlier investors," said the ED.
To conceal their activities, it pointed "digital records and domains were deleted; however, recovered data revealed more than 2.48 Lakh users became victims of this financial fraud and their total transactions exceeded USD 219 million, which amounted to total loss to these innocent investors to the tune of Rs 500 crore."
Upon receipt of such cash, ED said, the accused allegedly utilised the funds for acquiring immovable properties, wherein the registered values were significantly lower than the actual consideration paid.
"This arrangement enabled a substantial portion of the transaction value to be settled in cash and facilitated the laundering of funds generated from the fraudulent scheme."
Statements recorded under Section 50 of the PMLA from various persons indicate that cash was handed over to Vijay Kumar Juneja and Masoom Juneja on behalf of Subhash Sharma and his associates, mentions the agency.
"It was also found that Vijay Kumar Juneja and Masoom Juneja were nominees in several such employee-held accounts, indicating their effective control over these accounts, which were used in layering and concealing of Proceeds of Crime," added the ED.
Further, ED said Masoom Juneja was arrested under Sec 19(1) of PMLA, 2002, to investigate the total quantum of Proceeds of Crime generated and integrated by them from the cryptocurrency fraud.