Raj Kundra, businessman and Hindi film actor Shilpa Shetty’s husband, was caught in the Enforcement Directorate’s (ED) net after it attached his assets, including a residential flat in Juhu, Mumbai, a bungalow in Pune and equity shares, worth Rs 98 crore, as part of a money laundering investigation.
Kundra was arrested in July 2021 by the Mumbai Police after four women complained that they were forced to shoot p*rnographic content after being promised an acting job in web series. He was released from Arthur Jail in September.
What is Alleged Gain Bitcoin Ponzi Scam?
Bitcoin began attracting investors on the promise of massive gains in 2017. Ajay Bhardwaj, Mahender Bhardwaj and Amit Bhardwaj began the Gain Bitcoin Ponzi scheme through a company called Variable Tech Pte Ltd.
The scam came to the limelight after multiple FIRs had been filed by the Maharashtra and Delhi Police highlighting investors’ plea.
According to investigators, the promoters of Variable Tech collected Bitcoins worth Rs 6,600 crore (at the time) from investors, promising to use them for Bitcoin mining to earn returns of 10% per month in crypto assets. They initially gave investors the high returns that were promised, but later started to default.
How Does Ponzi Scheme Work?
According to Investopedia, a ponzi scheme pays early investors with money taken from later investors to create an illusion of profit. It relies on word-of-mouth as new investors hear about the big returns by early investors. The scheme eventually collapses after the flow of money slows down, making it difficult to pay the profits to investors.
The Ponzi Scheme gets its name in 1920 from a swindler named Charles Ponzi. He became a millionaire by promoting a non-existent investing opportunity. Charles Ponzi’s original scheme conceived in 1919 focused on the US Postal Service and international mail. He received a correspondence from someone in Spain with prepaid international postage. This international postage reply coupon could be exchange in the US for postage to send a reply back to Spain. This gave Ponzi an idea.
It was eventually discovered that he only had $61 worth of the postal coupons, and was actually collecting money from investors and paying enough of it to keep the scheme going.
How Did ED Begin Investigation?
Some of the victims approached the Delhi and Maharashtra Police in 2018-19, and lodged 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.
The ED registered an Enforcement Case Information Report (ECIR), similar to an FIR, under the Prevention of Money Laundering Act (PMLA). According to the ED, the promoters hid their ill-gotten Bitcoins from investors in obscure online wallets, cheating them of promised 10%.
How Did Raj Kundra Get Involved?
According to the ED, Raj Kundra received 285 Bitcoins from the mastermind and promoter of Gain Bitcoin Ponzi scam Amit Bhardwaj for setting 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. According to ED, the deal did not materialise, and Kundra is still in possession of the 285 Bitcoins, which are valued at more than Rs 150 crore.
Kundra, however, is not the main accused in the case. He was first questioned by the ED in June 2018.
Other Cases Involving Raj Kundra
The Mumbai Police busted a p*rnography racket in February 2021 in which obscene films were made and released on OTT platforms. The police began raiding different places. During this time, the four women who were investigated by the police named Raj Kundra in the alleged racket. Many serious allegations were charged against Raj Kundra by model Poonam Pandey, actress and model Sherlyn Chopra, and actress Sagarika Shona Suman.
Raj Kundra bought the Rajasthan Royals team in IPL along with wife Shilpa Shetty, but in 2013, the players of this team, S Sreesanth, Ajit Chandila, and Ankit Chavan were implicated in match fixing and were arrested by the Delhi Police. Team owner Kundra and ICC Chief Srinivasan’s son-in-law Gurunath Meiyappan were also accused of spot-fixing and betting. Kundra had then confessed to the police about betting through a bookie. Kundra and Meiyappan were suspended, and the team was banned. Kundra was also prohibited from participating in any cricket-related event. He was later given a clean chit in the case due to lack of evidence.
