As a seasoned analyst with years of experience in following the twists and turns of financial crimes, this latest saga involving Shailesh Bhatt and BitConnect is yet another grim reminder of the dark side of the digital currency world. The audacity of Bhatt and his accomplices to kidnap individuals for ransom, using the proceeds from a Ponzi scheme like BitConnect, is simply astounding.
Bhatt, who had been apprehended under India’s Prevention of Money-Laundering Act (PMLA), allegedly resorted to kidnapping two employees due to financial losses incurred from his investment in BitConnect Coin. The authorities found out that Bhatt and his accomplice had set a ransom, consisting of 2,091 Bitcoins, 11,000 Litecoins, and approximately 145 million Indian rupees, as the condition for the safe return of the abducted individuals.
According to reports released by the authorities, it’s said that Bhatt distributed a portion of approximately 2.9 billion Indian rupees, equivalent to about $34 million, among his associate. This money allegedly went towards acquiring properties, gold, and various other assets.
ED investigation qua Shailesh Bhatt has revealed that he distributed Rs. 289 Crore in proceeds of crime (PoC) to his accomplices in lieu of their active participation in kidnapping and extortion, which was further used to purchase immovable properties, gold, and other assets.
The Enforcement Directorate states that it has already confiscated properties valued at approximately 4.42 billion Indian rupees associated with this case. Additionally, Bhatt has made an appearance before the Special Court (PMLA) in Ahmedabad and is currently being detained by the ED while they continue their investigation into the matter. They have also reported:
In the course of my examination, I’ve found that the Enforcement Directorate (ED) has provisionally seized assets worth approximately 4420 million Indian Rupees. The ongoing investigation continues.
According to the reports from the Economic Division, Shailesh Bhatt’s case was initiated due to two initial complaints lodged by the State Criminal Investigation Department in Surat. These complaints were linked to the BitConnect scheme, which is accused of swindling investors’ funds between 2017 and 2018.
BitConnect’s Collapse in 2016
In 2016, BitConnect emerged as a business venture. Unfortunately, it was labeled as a Ponzi scheme, a type of fraudulent investment strategy where earlier investors are paid returns using the money invested by later investors. The company was forced to shut down in 2018 amidst accusations of defrauding approximately 4,000 investors, resulting in losses totaling around $2.4 billion. Satish Kumbhani ceased selling the coin in January 2018 and is believed to have run away with the investors’ funds.
In 2022, the sudden downfall of the company led to investors losing their money, which prompted the US Department of Justice to accuse Satish Kumbhani of operating a Ponzi scheme via his BitConnect Lending Program. The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against him, and he is also currently under investigation by Indian law enforcement agencies.
Individuals associated with the BitConnect case have also experienced legal repercussions. For instance, Glenn Arcaro, a prominent figure in the U.S., admitted guilt for conspiracy to commit wire fraud and was sentenced to 38 months imprisonment in September 2021. Meanwhile, in Sydney, another promoter named John Bigatton was found guilty of providing unlicensed financial advice, as determined in July.
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2024-08-19 15:51