• Investors deposited Rs. 3,000 and referred more and more people 
• Statewide, the accused managed to pocket Rs. 15 crore to Rs. 20 crore

Madikeri: The Kodagu Police have busted an online scam — a chain-link networking fraud — and have arrested three people, all residents of Kushalnagar. A search is on to trace four other accused. 

Kodagu SP Dr. Suman D. Pennekar said that the fraudsters, operating the website capitalrelations.in from Bengaluru and Kushalnagar, had duped many people across the State to the tune of crores of rupees. 

The arrested are 45-year-old A.  John, a real estate businessman and a resident of 3rd Block Tyagaraja Colony of Kushalnagar, 37-year-old Shashikanth, Sales executive at BSM Motors and a resident of Shivarama Karanth Extension, Kushalnagar and 39-year-old Antony D’Cunha, Manager at Dewan Housing Finance and a resident of Basaveshwara Extension in Kushalnagar. Four others are absconding.  

The seven people from Kushalnagar, who were hired by the website operators, lured several residents of Kodagu to invest. Accordingly, the investors were made to sign up, after which they were given a login ID and e-pin (password). After the investor transfers Rs. 3,000 to the bank account given on the website, his/ her money was expected to be doubled in a week’s time. 

Luring people through websites

The website capitalrelations.in claims to “create business opportunity by providing lasting self employment opportunities.” 

The website states: “If you help 1 person by making payment of 3K you are eligible to get help of 2 people. The eligibility is on the below criteria. You have to provide help and that provide help has to be approved by the person who has received the help. For you to receive help you should refer 1 person to provide help and the referred person has to get approval from the person who has received help, then you will be eligible to get help. The system is completely automated; there is no manual interference in the system. Provide help can be done in 24 hours. If the provide help person does not pay, then the receiver therefore can reject after 24 hours and can expect provide help again.”

Accused was the admin

“Shashikanth, the accused, was the website administrator and those who wanted to make an investment had to contact him and obtain user ID, password and three e-pins. An amount of Rs. 1,000 was fixed for a single e-pin and for three e-pins, one person had to pay Rs. 3,000. The amount would go to the accounts of the accused. A separate user login was provided for the invested. The money was transferred using Google Pay, Phone Pay and Net Banking,” the SP said. 

Chain-link system 

“The investors were told that after seven days, the amount will get doubled and will be credited to the investors. A few people, who had invested in the website in the initial days, had received the money (double the invested amount) through the chain-link system. This prompted them to refer more and more people, friends and relatives. As the money chain grew, the accused managed to pocket crores of rupees but a lot of investors were cheated, the SP said and added that the transaction was totally illegal,” she added. 

Many investors, having fallen prey to the bait, are said to have invested (transferred) lakhs of rupees from their bank accounts. The SP said that transactions to the tune of Rs. 15 crore to Rs. 20 crore have been made through the website. Investigations revealed that staying in Kushalnagar, the accused managed to spread their net across the State and more than three to four thousand people had logged in to the website or downloaded the app and had invested money. 

DCIB probe

The website was developed by a Bengaluru-based company in September 2019. “As more and more investors pooled in their money, the accused and the website admin used to login to the website with different names and pocket the money,” Dr. Suman said. Following complaints from the residents of Kodagu, the District Crime Investigation Bureau (DCIB) conducted an investigation and arrested three of the seven accused.

The website also claims to be following Securities and Exchange Board of India (SEBI) guidelines. Urging people not to fall prey to such sites, the SP has requested them to file complaints against those doing suspicious transactions. 

Kodagu Police have also asked people to be wary of fraudulent websites like helpingplanet.in, kinghelping.in, justmoney.in, crowdfunding.in, caringclub.in and infiniteclub.in