Man gets 2-year jail for cheating people through ponzi schemes

A local court has sentenced a man from Navi Mumbai to two years simple imprisonment for duping people through 'ponzi' schemes promising to double investors' money in a short time.

Special Judge V V Bambarde found Gurmitsingh Kundansingh Bhatti guilty under section 3 of the Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999, under which he was sentenced to 2 years imprisonment and fined Rs 5,000.

He was also found guilty under section 420 (cheating) of IPC and sentenced to one year imprisonment and fined of Rs 1,000. Both the sentences will run concurrently.

As per the prosecution, Bhatti was managing business of a city-based private company Shreehari Enterprises.
 

The case pertains to 1999, when he collected deposits for 3, 6 and 12 months from 300 to 350 depositors, totalling to around Rs 70 to 75 lakh, the prosecution claimed.

The Reserve Bank of India informed Thane police that they had not given permission for the said collection of money, the court was told.

The firm had promised to double the investors money, who deposit for at-least three months. Depositors were issued cheques of interest which were firstly en-cashed but on the second occasion onwards, they bounced, it said.

The prosecution said investors found that the firm was closed and hence they lodged a police complaint.

During the proceedings, statements of 133 depositors were recorded and 28 witnesses were examined.

The judge in his order said the prosecution has proved that, during March to August 1999, the accused who was responsible for management of or conducting business or affair of financial establishment company, which has fraudulently defaulted repayment of deposit on maturity with interest and in furtherance of common intention with absconding accused, cheated depositors.

"It is seen that the depositors/witnesses have been induced by advertisement. Similarly they have been induced by the accused that they will get double amount if kept in fixed deposits with Shreehari Enterprises. It is impossible to pay the double amount. So there was intention on the part of Shreehari Enterprises and the accused to deceive those depositors. It shows dishonesty on the part of accused," the order stated.