Indian Authorities Arrest Another Suspect Accused in $160 Million Crypto Fraud Case
On March 28, the Enforcement Directorate (ED) arrested a person, Abdul Gafoor, one of the accused in the Morris Coin fraud case that erupted on the India crypto scene in January 2022 and still remains one of the largest such frauds in the country.
ED is the economic intelligence wing of the Ministry of Finance, and it tracks high-value economic crimes. It took over the case in 2021 after several previous ones were registered against Morris Coin and its kingpin Nishad K.
Gafoor is the director of a shell company called Stox Global Brokers Private Limited, and he used to divert investors’ money to other shell entities. Arrested under the Prevention of Money Laundering Act (PMLA), Gafoor has been remanded in judicial custody, and ED is likely to request the court for Gafoor’s custody for interrogation, said reports in the Indian media.
Background of the Case
The Morris Coin fraud case originally came to light in September 2020 when one of the victims complained to local police in the Indian province of Kerala. The complaint pertained to ‘Morris Coin Investment Plan 300 days’, and the kingpin of the fraud, Nishad K, was arrested and later granted bail.
The police at that time could not realize the full magnitude of the fraud. After his bail, Nishad became traceless and reportedly left the country. ED, in its bid to trace him, has attached his properties in India.
In November 2021, the police arrested seven people after completing their investigation and realizing that 31-year-old Nishad had duped at least 900 investors to the tune of $160 million.
They were working as collection agents and conduits for Nishad, and their bank account details showed that they would transfer Rs 90-100 crore (approx. $1.3 billion) to different accounts associated with Nishad. The police found out that the money collected purportedly as investments in the ICO of Morris Coin, a non-existent digital coin, was diverted to shell companies and invested in real estate, among other immovable assets.
ED investigations have so far revealed that investors were asked to invest Rs 15,000 (approx. $190) for 10 Morris Coins, which will have a 300-day lock-in period. During that time, investors will receive returns of 3% per month.
Once the coin gets listed on the exchanges, its price would boom like that of bitcoin, Morris Coin agents promised the investors. This continued mostly during the lockdown period of 2020 until Nishad was arrested in September of the same year.
More Crypto Fraud Cases
In the past 15 days, this is the third crypto fraud case to be reported in Indian media. On March 27, CryptoPotato noted that the police in the Indian province of Gujarat arrested four persons, including a couple, for cheating a businessman by asking him to invest in bitcoin.
In another instance, a former top police official and a technical expert were arrested in the Maharashtra province for stealing crypto coins during the probe of a case in which they were assisting the police investigation.