The Enforcement Directorate announced on Tuesday that it had arrested a suspect in connection with a money-laundering investigation into a Kerala-based businessman who is suspected of scamming more than 900 investors out of Rs 1,200 crore in exchange for bitcoin.
Abdul Gafoor, one of the most prominent stockists of the 'Morris Coin Cryptocurrency,' was arrested on March 24, according to the source.
The next day, he was taken into prison by the Enforcement Directorate (ED) and held until March 31.
Mr Gafoor was accused of not complying with the investigation and of being extremely evasive in his responses, according to the federal investigation agency.
The agency stated, "Considering the fact that Abdul Gafoor is one of the directors of Stoxglobal Brokers Pvt. Ltd. and has played an active role in facilitating the placement and layering of proceeds of crime, he has been placed under arrest on March 24,"
The ED case arose from an FIR filed by the Kerala Police (Malappuram crime branch unit) against the case's main accused, businessman Nishad K.
The agency alleged Nishad K "cheated several investors by accepting investments, under a Ponzi scheme, through his three Bengaluru based firms-- Long Reach Global, Long Reach Technologies and Morris Trading by offering high returns of dividend such as 3-5 per cent per day."
According to the police complaint, "more than 900 investors were cheated to the tune of ₹ 1,200 crore." The investigation discovered that "Nishad, the main accused person, had appointed those persons as pin stockists who had invested a minimum of ₹ 10 lakh in Nishad's scheme and Nishad promised them that he would give five per cent as commission on the investment.”
The ED stated, "They made aggressive enrolment of new members into an illegal money circulation scheme under the garb of multi-level marketing, resorted to the fraudulent practice of investing the money received from the investors in the Morris Coin cryptocurrency plan run by Nishad and others".
It alleged that this resulted in the viral growth of the scheme network, resulting in significant unjust gain at the cost of investors. It had previously stated that the deposits taken from the general public were illegal and did not require any regulatory approval. It had attached Nishad K's assets worth ₹ 36.72 crore, as well as those of his colleagues, including the Indian Rupee equivalent of cryptocurrencies purchased with proceeds of crime by a close associate, in January.
