Ready to take over probe into multi-crore bitcoin Ponzi scam, CBI tells Supreme Court

New Delhi : CBI told the Supreme Court Friday that it is ready to take over the investigation into the multi-crore bitcoin Ponzi scheme in which several investors were allegedly lured on the promise of handsome returns.

CBI said this before a vacation bench comprising Justices M R Shah and A S Bopanna, hearing a plea filed by one of the arrested accused in the case seeking bail.

The accused has also sought a CBI investigation in the case saying cases have been lodged against him in several states.

Bitcoin or cryptocurrency is unregulated digital money that is issued and normally controlled by its developers and used and accepted among members of a virtual community. Bitcoin is not a legal tender in the country and not recognised as a medium of exchange.

Solicitor General Tushar Mehta, appearing for the CBI and Enforcement Directorate (ED), said that it is a “huge” scam involving multi-crores of rupees and the CBI was ready to take over the probe.

“This is a huge bitcoin Ponzi scam. He (accused) is seeking CBI probe and we (CBI) have no problem,” Mehta told the bench.

During the hearing, the counsel appearing for the petitioner told the bench that he was granted bail in some cases related to the alleged scam and was now seeking bail in three other cases lodged against him.

The counsel said that main accused of the alleged scam has been granted bail while the petitioner is lodged in jail for over an year.

“You cannot be granted bail in separate cases in one petition. We are of the prima facie opinion that for each FIR, you have to file separate petition,” the bench said.

The petitioner’s counsel said that multiple cases have been lodged in different states in the alleged scam.

“As different high courts are seized of these matters, you can come to this (apex) court and there is no difficulty in this. But you have to file separate petitions for seeking bail in separate cases,” the bench told the lawyer.

The bench asked Mehta and advocates representing Maharashtra and some other states to file their counter affidavit on the petition and posted the matter for hearing in the first week of July.

Last year, the director of an online multi-level marketing company and his brother were arrested by the Pune Police in connection with an alleged multi-crore bitcoin Ponzi scheme.

According to Pune police, an online multi-level marketing company was set up through which its director had allegedly lured investors by promising them handsome returns.

Cases were also lodged in other states in connection with the alleged scam.

Rs 68.50 cr ponzi scam : SC paves way for trial of S Natrajan

The Supreme Court has paved the way for prosecution of S Natarajan, now a director in the Sriram Group, in the 2004 high-profile ponzi scam involving Chennai-based PNL Nidhi Limited which allegedly collected Rs 68.50 crore from over 13,000 investors and defaulted in repayment.

The apex court set aside a Madras High Court order quashing criminal proceedings against Natarajan, who had served as one of the directors till 2000 in the accused firm, PNL Nidhi Limited, which is now defunct.

The private finance company and several others including Natarajan are accused of misappropriation of public money and fraudulent diversion of property in 2004. They are also charged with collecting Rs 68.50 crore from 13,295 depositors and defaulting in repayment.

The high court had set aside the proceedings against Natarajan, who was a director in the accused firm between 1995 and 2000, on the ground that default in repayment of dues to depositors by PNL Nidhi Limited occurred in 2004 while he left four years ago.

Setting aside the order, an apex court bench of justices Ranjan Gogoi and Navin Sinha noted that during the period when Natarajan was a director of PNL Nidhi Limited, its funds were diverted in different corporate entities, which resulted in default in repayment of money to the depositors.

It also observed that he had held “controlling interest” in a private company, Calfin Credit Holdings Pondicherry Limited (CCHPL), Chennai, which was one of the beneficiaries of the fund diversion.

“In the light of the above facts and circumstances of the case, we do not think that the high court was right in quashing the criminal proceedings against the respondent (Natarajan).

“We refrain from addressing any other issue, save and except what is indicated above to record our conclusion that the order of the High Court is not legally tenable. We, therefore, set aside the same and allow these appeals,” the top court said.

In 2014, the Madras High Court had appointed one of its former judges as administrator to settle the dues of PNL Nidhi Limited to depositors in Puducherry and Cuddalore. The PNL had agreed to settle 75 per cent of the deposits collected by it.

A 3,000-page charge sheet was filed in May 2012 in a Puducherry court by the prosecution agency. A case was filed against the PNL Nidhi Limited for misappropriation of public money and fraudulent diversion of property in 2004 by the CID.