Ayurveda doctor on bail in Gurugram cyber scam arrested again — in Rs 30-crore ponzi scheme

One of the victims, J Paul, a Hyderabad-based IT consultant, told The Indian Express: “I had invested Rs 2.14 crore in the scheme of which Rs 1.75 crore remains unreturned. We are determined to file multiple complaints so that he does not escape the police.’’

Another victim, R Kolli, a business consultant, said the police in Nagole had allowed them to confront Rao at the police station. “We asked him to show the money trail in the mule accounts he had opened but he did not. He claimed he had no money left,’’ Kolli said, adding that he lost Rs 1.2 crore by investing in Rao’s ponzi scheme.

In the Gurugram case, The Indian Express had first reported last July that scamsters trapped an executive in a digital arrest scam, stole Rs 5.85 crore from her HDFC Bank account and routed it through three layers: the ICICI Bank account of a resident in Haryana’s Jhajjar; 25 other accounts across 10 banks; and then 141 more accounts.

This newspaper had also reported that the second layer of 25 accounts included at least 11 in the Sreenivasa Padmavathi Co-operative Urban Bank in Hyderabad. Two of these “mule accounts” were allegedly opened by Rao, according to court records.

The Union Home Ministry’s cyber fraud unit, Indian Cyber Crime Coordination Centre (I4C), had informed Gurugram police that there were 181 complaints of cyber crime involving these 11 accounts and that Rs 21 crore had passed through them in just three months. For the two accounts that Rao opened, I4C data shows, there were 30 complaints of cyber fraud.

The FIR lodged against Rao in the ponzi scheme case at the Nagole police station on March 10 cites the Gurugram case as his first criminal offence. It states that Rao was allegedly running a ponzi scheme in which he offered monthly returns of between 10% and 16% — and that he duped investors by placing a fake SEBI certificate in his office.

“They (K V Rao and his team) offered huge commissions to mediators and agents who brought investors into the scheme. Based on these assurances, nearly 270 families invested their hard-earned money. Many victims are from poor and middle-class families who had borrowed money through loans and chit funds expecting safe returns,” the FIR states, adding that Rao is out on bail in the Gurugram case.

The Gurugram scam was at the centre of a series of investigative reports published by The Indian Express last July on how digital scamsters move crores of stolen money in minutes thr­ough a maze of deposits in banks across states. It was just one of 1.23 lakh such crimes reported across the country in 2024, involving a total of Rs 1,935 crore.

Last month, The Indian Express reported that a fish trader, Swamy Ayyappa Naravula, was arrested by the Gurugram police in the case for his alleged role in converting the stolen money into cryptocurrency. The police also recovered a phone from him, allegedly containing details of cryptocurrency worth Rs 40 lakh.

Rao’s role surfaced on the Gurugram SIT’s radar after Samudrala Venkateswarlu, a director of the bank holding the 11 mule accounts, allegedly told police that the “Hyderabad gang”, including Rao, used to withdraw money from these accounts and convert it to cryptocurrency. Samudrala himself was arrested on April 29 by the Gurugram SIT.

Meanwhile, the Gurugram police have recovered Rs 1.06 crore of the money stolen from the executive — some from ba­nks used in the scam, and some in cash from Samudrala (Rs 18.5 lakh) and Rao (Rs 10 lakh). The victim told The Indian Express that a sum of Rs 23 lakh, routed to the account of a company run by Rao and later frozen amid legal proceedings, has still not been returned.