Investigation Unfolds Scam in Hyderabad
A huge financial trap supported by invoice discounting has been brought to light. Falcon Invoice Discounting Company influenced by Capital Protection Force Private Limited is based in Hyderabad and has allegedly pulled in ₹850 crore out of the investors. The Cyberabad Economic Offences Wing (EOW) registered a case and arrested the company's Vice President, Pawan Kumar Odela, and Director, Kavya Nalluri, following the complaints made by the victims. They are being put on judicial remand.
Main Offender Still at Large
Officers are still trying to detect Chairman Amardeep Kumar from Capital Protection Force and CEO Yogender Singh along with several other offenders who are involved in the scam. DCP K. Prasad gave an official statement on Sunday with the details of the case.
How the Fraud Operated
Collection of Deposits Since 2021
Capital Protection Force formed in Hyderabad's Hi-Tech City, Huda Enclave with accused Amardeep Kumar, Yogender Singh, Pawan Kumar, and Kavya Nalluri. Through this company, they also developed Falcon Invoice Discounting Company, Falcon Capital Ventures, and several others.
The scammers played on investors' ignorance about invoice discounting, a typical financial instrument that ensures entrepreneurs instant cash for their products usually not yet sold. The company gets an invoice discount when it sells goods but has not obtained payment. It receives instant funds from a third party at a discount in exchange for to the sold invoice.
Nonetheless, the accused took advantage of this idea that was offered to them. They began getting the deposits of the investors through an app and website, starting in 2021, with the promise of high returns. They used phony contract documents as well as fake references to well-known companies for the scam. Here, interest rates were pledged on a scale from 11% to 21.95%, representing the tenure.
₹1,700 Crore Collected Over Four Years
Over four years, the fraudulent scheme managed to hoodwink ₹1,700 crore from 6,979 investors scattered across the wide expanse of India. In the beginning, the company made regular interest payments to build trust. But later, they ceased payments and shifted the sum of ₹850 crore to 14 other companies, namely:
- Coin Trade (Cryptocurrency Investment)
- Bluelife International India (Chain Scheme)
- Ukiyo Resort (Goa)
- Prestige Jets (Dubai Private Jet Services)
- Falcon International Property (Dubai-based Real Estate)
- RDP, Ret Herbals, and Ret Healthcare
- MBR 1 (Dubai)
- Capital Taxol, Virgo Global (Singapore-based Company)
- Ojas (UAE-based Company)
- Hashblock, Well Fella Herbal Business, and Swastik Ghee
On January 15, 2024, the victims only found a lock-down company that had an office located in the place of Hi-Tech City which they boarded the plane to. The accused were on the lam since then.
Previous Cases and Legal Action
Three Fraud Cases Registered
Cyberabad EOW police realized that the victims were defrauded and filed three cases against them which led to a corresponding search for the suspects. The First Information Report (FIR) declared 40 individuals as the prime accused. Pawan Kumar Odela and Kavya Nalluri were arrested on the grounds of technical evidence.
History of Fraudulent Activities
According to inquiries, it came to the fore that the accused had been practicing a Ponzi scheme fraud before as the Blue Life Company. A case was registered against him in Chevella Police Station in 2022. Further, other fraud cases have come up from different regions of the country as well.
Ongoing Investigation
The police force is working non-stop to find the rest of the wanted criminals. People investing their money should be careful and make sure the schemes are legitimate.
