A special investigation team of the Pune city police has arrested Amit Bhardwaj (35) and his brother Vivek Bhardwaj (31), the alleged masterminds of the Bitcoin MLM scam, a cryptocurrency fraud in which more than 8,000 people across the country and abroad are suspected to have been cheated to the tune of Rs 2,000 crore.
The SIT, which was in Delhi for the last 10 days, arrested the duo soon after they reached the Delhi airport from Bangkok on Wednesday. The Bhardwaj brothers, residents of Shahipur village in Delhi’s Shalimar Bagh area, are founders and CEOs of Gain Bitcoin, GB Minors and GB21 firms through which they lured investors. The two were produced before a court in Shivajinagar on Thursday afternoon and remanded to police custody till April 13.
The number of arrests in the case is now 10 and the accused have been booked under IPC Sections 406, 420, 34, provisions of the Information Technology Act and Prize Chit Fund and Money Schemes (Banning) Act.
Bhardwaj had set up an elaborate multi-level marketing (MLM) scam by luring investors to give him Bitcoins in return for promised higher returns, police said. Under the scheme, people were asked to invest one Bitcoin for a 10 per cent return. The contract would be valid for 18 months. Bhardwaj also allegedly offered to provide Bitcoin mining hardware to the investors. However, he never gave the returns and fled the country, police said.
Bhardwaj started his Bitcoin firm from Shalimar Bagh and eventually began mining operations in China, allegedly luring investors through a referral scheme.
The ED issued a look-out notice against Bhardwaj after he fled the country, four years after he set up Bitcoin mining operations.
Police said that Bhardwaj duped investors in Mumbai, Pune, Nanded, Kolhapur and other cities in Maharashtra. Three cases of Bitcoin MLM were registered in Maharashtra, one in Nanded and two in Pune at the Nigdi and Dattawadi police stations. Police have received 25 complaints from investors who have been allegedly cheated of Rs 2.25 crore, said DCP (cyber cell) Sudhir Hiremath.
Police arrested five people, including “motivational speaker” Pankaj Shrinandkishor Adalakha, from New Delhi on March 31 following a complaint by Bhimsen Baburam Agarwal (65), who invested Rs 1 crore but got no benefits. Adalakha has been remanded to police custody till April 9. Three suspects, including software firm operator Akash Kantilal Sancheti, were arrested in another case lodged at Dattawadi police station on January 13 on a complaint by a Pune-based woman entrepreneur, who had invested Rs 13 lakh but got no returns.
Police are looking for more suspects, including Bhardwaj’s father Mahendrakumar, Ajay Bharadwaj, Ashish Dabas, Manu Sharma and Rupesh Singh.
Police have recovered 32 Bitcoins and 79.99 Ethers from the accused through e-wallet. Rs 38.96 lakh in cash has also been seized. Investigators suspect that a huge amount of demonetised currency was also invested in Gain Bitcoin but no specific information has been revealed yet.
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