A 52-year-old design engineering manager from East Bengaluru fell victim to a massive stock market scam, losing Rs 6.4 crore between July and December. Posing as representatives of an “American” company, the fraudsters lured him with promises of exorbitant returns on his investments.
Vishwanath (name changed) said in his police complaint that he had not only lost his lifetime savings but had also raised hefty loans to invest. His ordeal began after he encountered an advertisement on Facebook for a firm called International Equity Fund (IEF), which claimed to be a Delaware-based advisory company registered in India as a foreign portfolio investor (FPI). Clicking on the ad added him to a WhatsApp group purportedly managed by the company.
According to the East CEN police, on July 19, Vishwanath was contacted by Meera Patel, who introduced him to stock trading. Soon after, another person named Hardik Shah offered him online training and shared links to the company’s website, which they claimed was licensed by the US Securities and Exchange Commission (SEC). He was convinced to open an account on the platform.
On June 29, Vishwanath was persuaded to join the “Big Return! IEF’s 700 percent Profit Plan,” a scheme that promised an incredible 700 per cent return on investments. Claiming to have an office in Bandra, Mumbai, the scammers provided stock recommendations, promised preferential initial public offering (IPO) allotments, and claimed to facilitate block trading through pooled funds.
They pressured Vishwanath into subscribing for an IPO, allocated more shares than he could afford, and demanded additional payments. Overwhelmed, he borrowed Rs 2 crore from friends and relatives. When his online account displayed an investment value of Rs 10 crore, he attempted to withdraw the funds. The scammers then demanded a Rs 70 lakh security deposit, which he paid after negotiation.
However, they subsequently blocked his account, alleging procedural errors. Further demands for Rs 50 lakh, later reduced to Rs 30 lakh, made it clear he had been duped. By December 2, the fraudsters had cut all communication. Vishwanath then filed the police complaint on December 7.
Vishwanath admitted to ignoring his family’s warnings. A police officer confirmed that the IEF was an unregistered entity and that it was not affiliated with the Securities and Exchange Board of India (Sebi), the stock market regulator.
Authorities are now investigating the case to trace the perpetrators and recover the lost funds. A police officer said that as the amount lost exceeds Rs 5 crore, the case would be transferred to the Criminal Investigation Department. In 2024 (up to November 30, 2024), Bengaluru city has lost a staggering Rs 1,800 crore to cybercrimes.
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