June 25, 2024

The Enforcement Directorate (ED) publicly announced on Thursday (April 18) that it had marginally attached real and personal properties amounting to Rs 97.79 crore belonging to businessman Raj Kundra, celebrated actress Shilpa Shetty’s husband, under the Prevention of Money Laundering Act (PMLA).

The ED confirmed the attachment of a residential flat in Mumbai’s posh Juhu locality, currently registered under Shetty’s name, a luxury bungalow in Pune, along with equity shares belonging to Kundra.

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This action by the ED is part of a larger investigation into an alleged Bitcoin investment fraud, with Raj Kundra being a primary suspect.

What entails the supposed Gain Bitcoin Ponzi scheme fraud?

Amid the Bitcoin frenzy in 2017, with rapid investments pouring in due to the promise of hefty profits, some individuals including Amit Bhardwaj, Ajay Bhardwaj, and Mahender Bhardwaj initiated the Gain Bitcoin Ponzi scheme via a firm called Variable Tech Pte Ltd.

The investigators believe that the quasi-company’s promoters managed to amass Bitcoins worth Rs 6,600 crore (based on the rate at the time) from unsuspecting investors, under the pretense of using them for Bitcoin mining promising monthly returns of 10% in the form of crypto assets. As is characteristic of Ponzi schemes, initial high returns fulfilled promises, but they gradually began to default.

The question that naturally arises is, when and how did the ED begin their crackdown?Festive offer

With the onset of defaults, victims of the alleged fraud approached law-enforcement agencies, who started registering multiple FIRs under Maharashtra Police and Delhi Police around 2018-2019. Thereafter, criminal cases were lodged against the pseudo-firm Variable Tech Pte Ltd, its promoters Amit Bhardwaj, Ajay Bhardwaj, Vivek Bhardwaj, Simpy Bhardwaj and Mahender Bhardwaj, as well as several multi-level marketing (MLM) agents for apparent investment fraud.

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In light of these cases, the ED filed an Enforcement Case Information Report (ECIR), comparable to an FIR, and initiated an investigation into money laundering under PMLA.

In April 2018, Pune Police apprehended Amit Bhardwaj and Vivek Bharadwaj. Subsequently, last year, Simpy Bhardwaj, Nitin Gaur, and Nikhil Mahajan were taken into custody, and currently, they are under judicial custody. The authorities are yet to arrest Ajay Bhardwaj and Mahender Bhardwaj.

How did Raj Kundra get tangled up in the Gain Bitcoin Ponzi scheme case?

During their pursuit of money laundering and tracking the proceeds of the alleged crime, the ED discovered that Ripu Sudan Kundra known famously as Raj Kundra, purportedly received 285 Bitcoins from Amit Bhardwaj to establish a Bitcoin mining facility in Ukraine.

The aforementioned Bitcoins were allegedly acquired from the proceeds of crime collected by Amit Bhardwaj from unknowing investors. However, the ED presumes that the discussed deal did not materialise, and Kundra retained possession of the 285 Bitcoins, which currently have a valuation of more than Rs 150 crore.

Prior to its actions against Raj Kundra, the ED had impounded properties amounting to Rs 69 crore belonging to other individuals implicated in the case.

The first round of questioning directed at Kundra by the ED occurred in June 2018.

What other legal entanglements has Kundra been accused of in the past?

Kundra is contending with a pornography-related case in which he was detained by the Mumbai Police Crime Branch in 2021 and spent two months in Arthur Road jail in Mumbai. A metropolitan magistrate’s court in Mumbai granted bail to him in September 2021.

In November 2023, Kundra produced and starred in the autobiographical film ‘Undertrial 69 aka UT 69’, which portrays his prison life.