A ponzi scheme is a fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
Sources in the Gautam Budh Nagar police department say the recent 'Bike-bot', 'Go Way', 'Bike For You' scams duped people from almost every region of the country.
Explaning the modus opernadi, a senior police officer informed that such schemes spread like wild fire through word of mouth as more and more people are connected to the scheme with deceptive offers of heavy returns on their hard earned money.
The police have, however, noted a pattern: many educated people got trapped in these schemes advertised through social media messages. "The accused used social media, pamphlets, and motivators who would spread the word about a scheme and encourage gullible people to invest in it," an investigating officer of one such case told .
"The investors were assured of an extra bonus if they could connect more investors with the scheme," he added.
To make their pitch more convincing, the accused even invested a little amount from his pocket in the projected business, which helped them showcase their scheme more effectively.
"The firms came out with multi-level marketing schemes and lured investors with a promise to double the returns in one year. For the purpose they also invested a small amount to make the projected business model look attractive," the officer added.
Following were the ponzy schemes:
* Bike Bot: Ran By BSP leader Sanjay Bhati, it came out with multi-level marketing scheme 'Bike Bot' and lured investors with a promise of double returns in one year. More than 2 lakh people invested in the ponzi scheme. The police earlier estimated the scam to be around Rs 1,400 crore, but now believe it to be much higher
Bhati and other top officials of Garvit Innovative Promoters Ltd (GIPL), known for its motorcycle taxis operating in western Uttar Pradesh districts such as Gautam Buddh Nagar, Ghaziabad, Hapur and Bulandshahr and also in Rajasthan, Madhya Pradesh, and Haryana, were wanted for cheating and had cases registered against them in Greater Noida and several other states.
Bhati surrendered in a court earlier this month.
*Bike For You: The Sector 63-based company, officially known as E-Wheel Transit Solution Private Limited, had lured gullible people into investing Rs 60,250 each in the scheme and promised increased returns in a short period of time.
"The total amount of fraud committed by 'Bike For You' involves crores of rupees. So far, it appears that 5,000 to 6,000 investors have been duped by the firm," said a senior police officer.
Three people have been arrested in this case.* Go Way: The owners of the company, a couple, used the same modus operandi: The victims alleged that he was asked to invest a minimum sum of Rs 62,000 in an electronic taxi business 'Go Way'. He was promised double the return in a year. In order to make the scam look real, the couple showed the investors a few electric cars and scooters. The accused couple stated that they planned to bring these on road as taxis.
Police suspect around 2,000 people invested in the company. The couple is on the run.
Senior Superintendent of Police, Gautam buddh Nagar, Vaibhav Krishna said there are many other such cases. "Social awareness is the only way out. We plan to educate people about these get-rich-quickly schemes," said Krishna.
(Advitya Bahl can be contacted at advitya.b@.in)
( With inputs from IANS )