Ponzi scheme by fraudsters – Beware Bengaluru

Ponzi scheme by fraudsters – Beware Bengaluru

Ponzi scheme – by fraudsters are becoming a nightmare in Bengaluru city.  Bengaluru public went on a panic mode as  thousands fell victim to IMA ( I Monetary Advisory) jewel’s ponzi scheme by its owner Mohammed Mansoor Khan.  

Red flags had been raised about  IMA (I Monetary Advisory) way back last year.  But thousands of investors, majority from the muslim community failed to understand and get the real picture.

IMA Jewels – Ponzi scam :

Police have received around 8,500 complaints involving investments approximately worth Rs.1500 crore.   

On its website, IMA claims to have presence in bullion trading, educational academies offering pre-primary to higher secondary education, credit co-operative and housing society, health care services and a multispecialty hospital, hypermarkets and supermarkets, infrastructure and real estate development, printing and publishing and retail sales of gold, silver, diamond & platinum jewellery. 

Most of those who invested in the company belong to the minority community, working as auto-rickshaw drivers, beedi manufacturers, carpenters and street vendors.

Who is Mohammed Mansoor Khan?

Image mansoor khan

IMA or I Monetary Advisory Jewels was launched in 2016 and Khan was its promoter and Managing Director. Khan is believed to have houses in Jayanagar as well as Richmond town in the city. He also launched a second outlet of the jewellery store in Jayanagar in 2018.

One of the sister concerns, IMA Advisory Private Limited, however, describes itself as a 13-year-old company. Investors are spread across the various subsidiaries and returns were being paid for a while before they stopped a few months back.

Khan claims that the IMA group has properties worth Rs 1,050 core in the city. The group claims to have a clientele of seven thousand.

Some of its board of directors are Nasir Hussain, Naveed Ahmed Nattamkar, Nizammuddin Azeemuddin, Afshan Tabassum, Afsar Pasha and Arshad Khan.

Group companies of IMA :

Group companies include IM Digital, IM Trends, IM Entertainment, IM Zayee, IMAIP Bullion and Trading, MMK Institute of Education, IMAW Jewellery, IMA Women Empowerment Business Module. Most of these were set up as limited liability partnerships.

Highlights of IMA Ponzi scam :

In an audio clip, IMA Jewels owner allegedly said he is “tired of bribing corrupt politicians and bureaucrats”

As soon the audio went viral, investors gathered at the IMA Jewels headquarters, demanding action against him

Police suspect that at least 26,000 investors from across Karnataka have been cheated

The principles of IMA according to their website :

  • Belief in Allah Subbanahu Wa Ta’ala
  • No interest
  • No haram investments
  • Financing based on real assets
  • Risk sharing

Why public get interested in Pvt. Organisations?

Some are of the opinion that due to lack of deposit schemes by banks, public are opting for investment in private  co’s. 

The interest amount paid by private financiers are on a higher side and this lures the people to invest their hard earned money in ponzi schemes.

Normally banks offer an annual interest of around 7% whereas ponzi schemes offer 2.5% monthly interest which comes to around 30% p.a.

The returns on the investment encourages public to invest in these private co’s.

The closure of popular Janada Deposit schemes by banks may have led to rise of Ponzi Schemes and fraud firms.  The Janata Deposit Scheme suited the needs of many people. The public included businesspersons, professions, daily wage labourers, traders and home makers.

How ponzi scheme works :

Information about these schemes spreads by words of mouth.  The fraudulent operators usually avoid being in touch with the investors.  The Co. will not have any accountability or do they give any record of having received money. 

All the transactions are done without using banks so there will not be any money trail. Some of the private operators offer higher rate of interest to lure more investors quickly.

For example IMA largely offered three kinds of investments. The first one was a business investment, which guaranteed around 3 per cent return per month.

The second one was an education investment scheme, which offered similar rate of annualized return during March-April to the investee.

The third one was a marriage investment that would fetch around Rs 5-6 lakhs in five years over Rs 50,000 investment

Another case which came to light is the Karvy group. 

Karvy group scam :

The Bengaluru police has booked the top officials of another fraudulent firm, Karvy group for cheating its investors by promising huge returns.

Operating under many firms, Karvy Group of Co’s had allegedly cheated its investors by promising them a secure investment and 20% returns.

Like IMA, most of the complainants in Karvy have also invested a major part of their life savings in the firm hoping for a better future. Some had invested for their children’s marriage while others hoping for a steady even income after their retirement. But it came as shock to the investors when the money flow halted suddenly.

Among those booked include directors of Karvy Stock Brokers, Karvy Realty India Pvt. Ltd. and Karvy Capitals, who allegedly cheated investors by promising 18-20% returns.

Cheated Amount  and reasons :

Till now, nine investors, have been cheated of Rs.3.81 crore, have filed a complain at Basavanagudi police station. 

Some of the complainants are retired professionals from different fields and had invested  all their savings.  When the returns stopped coming, it was a shock to the investors. 

The reasons given by the company for non payment is demonetization and GST.  Some of the cheques given by the company were bounced. 

Wake up call:

The above mentioned incidents are a wake up call to the public to consider before investing their hard earned money.  Even though the returns are less, opting for government backed institutions are always safer.

Even if the returns are 10% or more, investing in private co’s are always risky. 

It is always better to take advice and to enquire about the financial status of private co’s before investing. 

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