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The man who cracked the Rs 3,700 crore online scam

February 10, 2017 09:00 IST

With just 10 detectives under his leadership and in about three weeks' time, Senior Superintendent of Police of Uttar Pradesh's Special Task Force Amit Pathak cracked an online digital racket that swindled 600,000 people and is now worth Rs 3,700 crore and counting.

Anubhav Mittal, centre, known for his flashy lifestyle, was arrested by the UP STF, as the kingpin of the Rs 3,700 crore online ponzi scam

Anubhav Mittal, centre, known for his flashy lifestyle, was arrested by the UP STF, as the kingpin of the Rs 3,700 crore online ponzi scam; Photograph: PTI

Call it 'digital marketing', or 'get-paid-for-likes' scam, the fact is high-heeled, well-educated scammers, suave in their use of technology, social media and a solid grip on the greed factor of the masses that works behind the success of such schemes, a computer scientist from NOIDA (North Okhla Industrial Development Authority), UP, which is also within kissing distance of the national capital, hoodwinked 600,000 people with the carrot that they can make 32 per cent on their initial investment every month, month after month.

Consider the simple math and you will understand how greed preys upon people's psyche:

Those investing Rs 57,500 in this scheme for a month were promised a return of Rs 625 every day, that is, 1.08 per cent daily.

Multiply this daily return (Rs 625) by 30 (days of a month), divide it by the original investment (Rs 57,500) and multiply the answer by 100: The return is a mindboggling 32 per cent per month.

Mittal, 26, who is known for his flashy lifestyle -- he had invited Bollywood stars Sunny Leone and Amisha Patel for his birthday on November 29, 2016 at his Delhi bungalow -- had devised his schemes in a shrewd manner that allowed people, who could not afford to invest a huge amount, to invest in different slabs beginning with Rs 5,750, Rs 11,500, Rs 28,750, and get proportionate returns.

Apart from the monthly returns, investors were free to take away their initial corpus at the end of the year.

Aren't you already planning your next vacation in the Maldives? That's how greed overwhelms common sense!

This is the greed factor that not just Anubhav Mittal, but many others before him, have used successfully to swindle money by promising the moon.

However, Mittal's luck ran short, when Amit Pathak and his 10-member team of detectives began following up on more than 4,500 emails to the Uttar Pradesh Special Task Force's email ID complaining about the wrongdoing by various companies floated by Mittal, from across India, and a full-blown, multi-billion crore scam began to manifest itself before the investigators.

The going was not very easy though as Mittal, a BTech in computer science, had made every attempt to obliterate his online footprint by hiding behind a web of companies that went by the name of 3W Digital Private Limited office, Ablaze Info Solutions Private Limited, or kept changing URLs from socialtrade.biz and later to frenzzup.com.

Amit Pathak, below, who spoke to Rediff.com's Prasanna D Zore about the details of the case so far, finally blew the lid off this scam early February after working on it for three weeks.

The UP STF has shared the data gathered from Mittal's offices and their investigations of four people arrested in this case so far with the Income Tax department and the Enforcement Directorate, indicating there is more to this scam than meets the eye.

Though Pathak did not speak about the nature of the data shared with other investigation agencies, which naturally have jurisdiction over this scam, the ED has already filed a case against Mittal under the Prevention of Money Laundering Act based on the first information report filed by the UP STF.

Most importantly, Rs 524 crore were recovered from Mittal's account in Yes Bank that could yet get the market regulator Securities Exchange Board of India and banking regulator Reserve Bank of India become a part of the investigations soon.

***

Anubhav Mittal and his CEO Shridhar Prasad and technical head Mahesh Dayal, operated from 3W Digital Private Ltd in NOIDA's Sector 63

IMAGE: Anubhav Mittal and his CEO Shridhar Prasad and technical head Mahesh Dayal operated from 3W Digital Private Ltd in NOIDA's Sector 63; Photograph: PTI

What can you tell us about the people you have arrested so far and how did you arrive at the Rs 3,700 crore figure?

These are all technology-savvy, educated people who have made use of technology sufficiently well to defraud people.

Our investigation of the arrested people revealed that this scam is worth Rs 3,700 crore and more.

We cross checked this with their bank accounts to reach the figure.

We recovered Rs 524 crore from his (Mittal's) bank account and the Rs 3,700 crore scam involves all the amount is right from the time he formed this company in 2015.

Out of the Rs 3,700 crore you are now left with Rs 500 crore. So, where is the rest of the money?

A part of this money has already been given to his customers to win their trust. In return, these customers got him more investors.

Happy customers help attract more customers who would keep the machine running.

It is possible that out of this total money collected over two years (Mittal floated this business model in 2015) he must have paid back Rs 1,500 crore to Rs 2,000 crore to his customers to win their trust and keep the scheme going.

It is quite possible that he could have shelved off or laundered Rs 1,000 crore for himself too.

Isn't this money laundering?

Using, depositing other people's money and use that money to pay other people using fictitious bank accounts is laundering only.

Siphoning money abroad?

No, most of this money was laundered only in India to keep his ponzi scheme well-oiled.

The kingpin/s of the scam...

We have made four arrests yet in this case and Anubhav Mittal is the kingpin of this entire 'digital marketing' or 'get paid for likes' or 'clicking on links' racket.

Apart from the arrests of Anubhav Mittal, who is the director of 3W Digital Private Ltd, his CEO Shridhar Prasad and technical head Mahesh Dayal, we made one more arrest on February 8 (of Atul Mishra, relationship manager, Yes Bank's Raj Nagar District centre, Ghaziabad).

There can be more people associated along with these four in this scam and they could be unearthed in the coming days.

But Anubhav Mittal is the kingpin of this racket.

More arrests, likely...

100 per cent!

Amit Pathak, Senior Superintendent of Police, Special Task Force, Uttar Pradesh

What more remains to be unearthed?

The rest of the amount remains to be unearthed.

Where have they spent or kept the rest of the amount; whether they have invested their wealth into real estate or any other place.

The team that cracked this case...

We were on this case since the last three weeks and 10 of my men worked diligently to crack this case.

When we arrested these three, they were non-cooperative with the investigators.

When we confronted them with the evidence that we had they started to speak.

We had half the evidence with us before we made the arrests and these three then gave us access to CPUs, hard disks, and other electronic and digital material from their offices.

We have asked for the custody of this evidence gathered by our team and Anubhav Mittal told us about their modus operandi.

We have analysed and understood half the data gathered from the evidence and we need some time to understand more from the evidence that we have.

Insights and data analysis...

There is a huge connivance of bank people; there are clear instances of flouting of bank norms; there is a clear flouting of various warnings that were generated in the (bank's) system and the bank people overlooked it; there is violation of Companies Act; violation of Money Circulation Scheme (Banning) Act, 1978; violation of Income Tax rules, service rules...

There could be accountants and auditors, too, involved criminally with these people.

We have deciphered and understood a lot of data we have gathered and we need to analyse a lot more for which we will need at least another month.

But it may take another six months to complete a thorough investigation of this scam.

The bank from which the money was recovered...

The Rs 524 crore was recovered from Anubhav Mittal's account in Yes Bank, NOIDA branch.

Anubhav Mittal's political connections?

There are no political connections of the four arrests we have made so far.

Prasanna D Zore / Rediff.com