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The Directorate of Enforcement (ED) said on Thursday (April 18) that it had provisionally attached immovable and movable properties worth Rs 97.79 crore belonging to businessman Raj Kundra, who is the husband of actor Shilpa Shetty, under the Prevention of Money Laundering Act (PMLA).
A residential flat in Juhu, Mumbai, which is currently in the name of Shetty, a residential bungalow in Pune, and equity shares in Kundra’s name have been attached, the ED said.
The attachments are part of the ED’s action in a case of alleged Bitcoin investment fraud, in which Raj Kundra is under investigation.
Back in 2017, when Bitcoin was attracting hordes of investors on the promise of massive gains, some individuals, including Amit Bhardwaj, Ajay Bhardwaj, and Mahender Bhardwaj, started the Gain Bitcoin Ponzi scheme through a company called Variable Tech Pte Ltd.
According to investigators, the promoters of the company collected Bitcoins worth Rs 6,600 crore (at the time) from gullible investors, promising to use them for Bitcoin mining to earn returns of 10% per month in crypto assets. In the classic manner of Ponzi schemes, they initially gave investors the high returns that were promised, but later started to default.
When and how did the ED action start?
After the defaults began, some of the victims of the alleged fraud approached the police, and in 2018-19, Maharashtra Police and Delhi Police registered multiple FIRs. Criminal cases were filed against Variable Tech Pte Ltd, its promoters Amit Bhardwaj, Ajay Bhardwaj, Vivek Bhardwaj, Simpy Bhardwaj, and Mahender Bhardwaj, as well as several multiple level marketing (MLM) agents for alleged investment fraud.
Based on these cases, the ED registered an Enforcement Case Information Report (ECIR), which is akin to an FIR, and launched a money laundering investigation under the PMLA. According to the ED, the promoters had cheated the investors, and concealed ill gotten Bitcoin in obscure online wallets.
In April 2018, Pune Police arrested Amit Bhardwaj and Vivek Bharadwaj. Simpy Bhardwaj, Nitin Gaur, and Nikhil Mahajan were arrested last year. They are now in judicial custody. Ajay Bhardwaj and Mahender Bhardwaj are yet to be arrested.
In the course of the money laundering investigation and tracking the proceeds of the alleged crime, the ED found that Ripu Sudan Kundra alias Raj Kundra allegedly received 285 Bitcoins from Amit Bhardwaj to set up a Bitcoin mining farm in Ukraine.
The said Bitcoins were allegedly sourced from the proceeds of crime collected by Amit Bhardwaj from gullible investors. However, according to the ED, the deal did not materialise, and Kundra remained in possession of the 285 Bitcoins, which are at present valued at more than Rs 150 crore.
Before its actions against Raj Kundra, the ED had attached properties worth Rs 69 crore belonging to other accused in the case.
Kundra was first questioned by the ED in June 2018.
Kundra is facing a pornography case in which he was arrested by the Mumbai Police Crime Branch in 2021, and spent two months in Mumbai’s Arthur Road jail. He was granted bail in September 2021 by a metropolitan magistrate’s court in Mumbai.
In November 2023 Kundra made a biopic called ‘Undertrial 69 aka UT 69’ based on his life in prison, and himself played the central role in the film.
