Social Trade Ponzi scam

The Social trade Ponzi scam (a.k.a. Noida Ponzi scam and Social Trade scam) was a ponzi scheme in India run by Anubhav Mittal, along with his company’s CEO Sridhar and technical head Mahesh that operated between 2015 and 2017. They duped Rs 3700 Crore from nearly 700,000 people through an online portal ‘socialtrade.biz’.^{[1][2][3][4][5][6][7][8]}

Background

They used names like Ablaze Info Solutions Limited and 3W Digital Private Limited to fool people around.^[9][10]

List of false companies run by Mittal:^[11]

• M/s. Social Trade India Pvt. Ltd.
• M/s. Intmaart India Pvt. Ltd.
• M/s. 3W Digital Pvt. Ltd.
• M/s. Ablaze Info Solutions Private Ltd.

Modus operandi of Social trade

The investors were given web links to click. They were told that the company earned Rs. 6 for each click and passed on Rs. 5 to them. The more they invested, the more links they got to click. People were also told that they would get a bonus if they got others to invest. The size of the bonus would depend on the investments they brought in. But the police found the company did not earn anything from the web links - they were just a prop to reassure the investors.^[12]

Key people

Three persons - Anubhav mital, Sridhar prsad, and Mahesh Dayal. ^[13]

Financial operations

Since 2015, nearly 7 lakh people invested thousands from their savings in the company.

An official of a private bank who allegedly helped Anubhav Mittal siphon off money has been arrested by the Uttar Pradesh police. Investigators suspect a chunk of the funds the company got from investors - around 3,000 crore - may have been transferred abroad and the Enforcement Department has been roped in to trace it.^[12]

Collapse

The first sign of strains on the company's finances emerged in December 2016, when many investors did not get their payments. It was around this time that many bank accounts were closed and opened in quick succession at Ghaziabad's Rajnagar. But instead of fresh earnings, money was just transferred between a series of his accounts - Axis Bank to Yes Bank to Kotak Mahindra and Canara Bank. In all, police say Mittal had ten bank accounts in Ghaziabad.^[12]

As investors started demanding refunds, Mr Mittal started operating companies in new names. In December, socialtrade.biz was migrated into new company, called freehub.com. Within 10 days, the site migrated into intmaart.com and then on Jan 27, 2017, intmaart.com was migrated into frenzzup.com.^[12]

Aftermath and reactions

As the police swooped down on his office in Noida near Delhi on Wednesday and told the world how they had busted a 3,700 crore online scam based on social media 'likes', Anubhav Mittal whispered into a mobile phone camera, "We will be back again. We will rock the world."^[14]

Chief Minister Harish Rawat's chief spokesman Surendra Kumar accused the BJP of having a deal with Noida-based online company which is allegedly involved in ponzi scam.^[6][15]

Webwork Ponzi scam

One of the two Webwork Ponzi partners was inspired by Anubhav Mittal's 'like' Ponzi scheme. Sandesh Verma, one of the two directors of Webwork, revealed that he had subscribed to three IDs in Mittal's Social Trade scheme, and then founded Webwork Trade Links. They roped in around 500 crore from people.^{[16][17][18][19]}

Medicom Ponzi scam

Jaipur resident Daulat Singh Shekhawat and Alwar resident Bharat Kumar, along with the manager, Mahendergarh resident Rajkumar Sharma and Bhiwani's Ajay, another partner derived inspiration from the Noida-based social trading firm Webwork Trade Links Private Limited and cheated 5,000 investors of Rs 8 crore in 8 months^[20]

Tornado Ponzi scam

Vastrapur, Gujarat based Tornado Software Pvt Ltd also called mlm4india.com and mlmmirror.com is running similar Ponzi scam by using shadow company named 24 Hands Global Consulting Pvt. Ltd. (ayurvedaoutlet.com) and number of people and money involved in the case is not known yet. This company also followed the same path, previously it was Webpagelike.com and migrated into paywaydeal.com (Pay Way IT Solutions Pvt. Ltd.) and then into ayurvedaoutlet.com.^[21]

Different cases has been filled against 5 more companies like this.^[22]

Criminal prosecution and ongoing investigations

A day after conducting multiple raids in Uttar Pradesh, the Special Task Force (STF) on February 6 sealed the house of ponzi scam accused Anubhav Mittal’s wife Ayushi Mittal.^[6][23]

STF also arrested Atul Mishra, a relationship manager with Yes Bank, for allegedly entering into a criminal conspiracy with Mittal and providing him prior information about the bank’s suspicious transaction reports, raids and investigations.^[24]

As of 3 March 2017, Police received 13,000 complaints and more than a dozen FIRs in the case.^[24]

Bollywood Celebrities involvements

It was found prominent Bollywood celebrities also got mislead by scam and endorsed and advertised the scams. Photos have surfaced of Mittal with Sunny Leone and actress Ameesha Patel at an event but that one, police said, was of a birthday party, an event that did not concern the probe.^[25]

Raj Kumar Mishra, DSP of STF, said, "The Prize Chits and Money Circulation Schemes Act, 1978 prohibits promotion of any such scheme. We have got evidence and photos of the actor Sunny Leone in the promotional event. She may be questioned if required during the investigation," he said.^[25]

See also

• Webwork Ponzi scam
• List of scandals in India
• Ponzi scam
• Pyramid scheme
• Saradha Group financial scandal
• Corruption in India
• Rose Valley financial scandal

References

External links

• Social Trade Ponzi scam collected news and commentary at Times of India
• Anubhav Mittal Ponzi scam collected news and commentary at NDTV