ED Arrests Two in ₹183-Crore Online Ponzi Scam After Return From Dubai

The Enforcement Directorate has arrested two individuals in connection with an alleged ₹183-crore digital Ponzi scheme linked to QFON App Limited and its associated entities.

The arrests of Sudhir Dalsukhbhai Kotadiya and Umang Santibhai Kotadiya were made on March 11 under the provisions of the Prevention of Money Laundering Act, 2002. The two accused were produced before a special court in Mumbai, which remanded them to ED custody for eight days until March 20 for further questioning.

Origin of the case

The case originates from a police complaint registered in December 2024 in Thane. The FIR alleged that Sudhir Kotadiya, Umang Kotadiya, Jaysukh Sakhariya and others operated a fraudulent online investment scheme that collected large sums of money from investors in Gujarat and Maharashtra.

The complaint invoked several sections of the Indian Penal Code along with provisions of the Maharashtra Protection of Interest of Depositors Act, 1999.

How the alleged scheme worked

According to investigators, the accused promoted investments through a mobile-based platform operated by QFON App Limited. Investors were promised unusually high returns ranging from two per cent to 10.5 per cent.

The platform claimed that users could earn money by performing digital tasks such as watching online advertisements through the app. However, investigators later found that the platform had no legitimate revenue-generating activity.

Instead, funds collected from new investors were allegedly used to pay returns to earlier investors — a typical characteristic of a Ponzi scheme. Authorities also suspect that a substantial portion of the collected funds was siphoned off by those running the operation.

Money trail and investigation

The ED said the money raised through the scheme was routed through multiple bank accounts belonging to companies, firms and individuals linked to the accused. Some funds were also allegedly transferred through informal cash channels using angadiya operators.

Investigators estimate that proceeds of crime amounting to about ₹183 crore were generated through the operation.

Officials further said that the two accused had been absconding during both the police investigation and the ED probe. During the investigation, authorities learned that they had fled to Dubai and later re-entered India through Nepal.

After sustained surveillance and intelligence inputs, the agency was able to track their movements and arrest them on March 11.

Earlier search operations conducted by the ED at multiple locations led to the seizure of documents, digital devices and financial records. The agency also recovered cash worth ₹2.51 crore during the raids.

The probe agency said further investigation is ongoing to trace additional assets, identify other individuals involved in the alleged fraud and determine the complete financial trail.