Unauthorized and Fraudulent Mobilization | 67
Fraudulent Mobilization of Deposits in
the Guise of Providing Goods or Services
A company claiming to be providing online gam-
ing service, formulated a scheme in which inter-
ested persons could ‘subscribe’ to the scheme by
paying a minimum ‘subscription’ of `10000 and
further multiples of the same. The company
gave assurance of minimum 10% interest (called
bonus) every month on the sum provided by such
persons. As per the scheme, the total period for
retention of such deposits, called ‘subscription’,
was thirty months. However, the members were
entitled to refund of the amount on expiry of one
year. Shorn of the camouage, it was a simple
xed deposit scheme. The scheme provided for
free online gaming service. An analysis of the
scheme clearly revealed that online gaming was
not generating any revenue or prots. Thus, it
was a fraudulent scheme where gullible investors
were being lured by unsustainable high rates of
interest of 10% per month (more than 120% per
annum). As the online gaming was not generating
to 29% of the collections was paid. Almost all
the persons subscribing to the scheme treated
this as a deposit scheme with high interest rates
and had no intention of actually booking any
product.

Get Corporate Governance & Fraud Risk Management now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.