India News | Man Arrested for Chit Fund Fraud

New Delhi, Jun 18 (PTI) A man has been arrested for allegedly cheating people by luring them to invest in his chit fund scheme after offering handsome returns, police said on Friday.

Mool Chand was nabbed by the Economic Offences Wing of the Delhi Police on Thursday for fraud and cheating, and was tracked via surveillance and local intelligence, they said.

Police said the accused lured people from his locality to invest in his chit fund scheme by offering handsome return and liquid funds.

According to the police, the matter came to light after a collective complaint was filed by 24 victims.

The victims alleged that Mool Chand induced them to invest a monthly deposit in the chit fund. The scheme was floated with 20 shares of Rs. 10,000 each for a period of 20 months, they said.

He had collected a total of Rs 50 lakhs from several people in his locality and also issued cheques to some of the them as security against their investment. After collecting the money from the victims, he sold his house and fled with his family, police said.

After conducting preliminary enquiry into the complaint, a case under sections 406 (criminal breach of trust), 420 (Cheating and dishonestly inducing delivery of property), 120 B (Criminal Conspiracy) of the Indian Penal Code and section 3 and 4 of 'The Prize Chits & Money Circulation Schemes (Banning) Act' was registered in March and investigation was taken up, according to the police.

"During investgation, it came to light that Mool Chand used to run a small manufacturing unit of disposable paper plates at his house. After suffering losses, he started the chit fund scheme with the motive of collecting easy money and targeted people from his locality," a senior police officer said.

The investigation conducted so far has revealed that the accused used to accept the monthly deposit mostly in cash and maintained registers for keeping records of the subscribers and their respective share, he said.

"Some of the victims were given cheques as security against their deposit. The cheques, later on, got dishonoured upon presentation. In January this year, the money was to be paid back in lump sum after maturity of the scheme. When the subscribers started asking Mool Chand to pay their money back, he sold his house and absconded," he added.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)