Businessman Arrested for Defrauding 900 Investors in Cryptocurrency; Court Orders ED Custody Until March 31st

The Enforcement Directorate announced on Tuesday that it had detained an accused in connection with its money laundering investigation into a Kerala-based businessman suspected of defrauding more than 900 investors out of Rs.1,200 crore in exchange for cryptocurrency.

Abdul Gafoor, one of the primary stockists of the ‘Morris Coin Cryptocurrency,’ was arrested on March 24, according to the report.

The next day, he appeared in court and was released into the custody of the Enforcement Directorate (ED) until March 31.

Mr Gafoor, according to the federal investigative agency, was not complying with the probe and was “extremely evasive” in his responses.

“Because Abdul Gafoor is a director of Stoxglobal Brokers Pvt. Ltd. and has played an active part in assisting the placement and stacking of profits of crime, he was arrested on March 24,” the agency stated.

The ED case originated from a Kerala Police (Malappuram crime branch section) FIR filed against the case’s main accused, businessman Nishad K. According to the agency, Nishad K “cheated multiple investors by accepting investments in a Ponzi scheme through his three Bengaluru-based firms—Long Reach Global, Long Reach Technologies, and Morris Trading—by promising high dividend returns of 3-5 percent every day.”

According to the police complaint, “about 900 investors were defrauded to the tune of Rs.1,200 crore.” According to the investigation, “Nishad, the primary accused person, had designated those persons as pin stockists who had invested a minimum of 10 lakh in Nishad’s plan and Nishad told them that he would offer 5% as commission on the investment.”

“They engaged in aggressive enrolment of new members into an unlawful money circulation scheme disguised as multi-level marketing, and resorted to the fraudulent practise of investing the money obtained from investors in the Morris Coin cryptocurrency plan conducted by Nishad and others,” the ED stated.

It stated that this resulted in the “viral growth of the scheme network and hence massive unjust gain at the expense of investors.” It had previously said that the deposits taken from the general public were illegal and did not require any legislative approval from any regulatory agency. It had attached assets worth 36.72 crore of Nishad K, those of his colleagues, and the Indian Rupee equivalent of cryptocurrencies purchased with criminal gains by a close associate in January.