Malegaon scamster cheat investors of Rs seven crore

Maten Hafeez I TNN
MUMBAI: The Malegaon police are probing a case of cheating wherein the accused lured unsuspecting inventors to fund his business and in return promised a 30 per cent return on the investments. The role of police in this case was criticized for allegedly harassing the victims and delaying the FIR. The initial reports say the fraud amount is Rs seven crore but could go upto Rs 40 crore.


The Azad Nagar police in the textile town Malegaon registered a cheating case against three persons; Shahzad Shaikh, Shahbaz Shaikh and Abrar Ahmed Abdul Aziz. Shahzad has been said to be the kingpin of this fraud. Police sources said that a businessman, Abdul Majid, lodged the complaint. Sources said that Shahzad, who pretended to be a Saree businessman, would buy Sarees from Malegaon weavers and sell it in other cities. "Initially, he gave huge profit and in some cases, the investors were given double profit. Shahzad asked businessmen in the city to invest in his business to expand the network. Many people who had no weaving or Saree selling background also joined hands thinking huge profit," said one of the victims.


"While Shahzad gave money or returns initially, he stopped making payments saying he had not got the money from the buyers. It continued for several months and then people began approaching the police. However, the police role was suspicious. There were allegations of money changing hands. "Most of the victims were treated as accused and thoroughly interrogated. Instead, had the police shown interest in nabbing the accused and interrogating him, victims must have got their money back by now," said a victim.


Shahzad was also summoned to the police station but never arrested. Now, the police have registered the case, the accused is on the run," said another investor, who lost several lakhs. The office bearer of a socio-religious organization is suspected to have lost over Rs two crore in this fraud. A well known spice trader family in Malegaon is learnt to have lost over Rs five crore.


Pravin Padwal, superintendent of police, Nasik (rural), said that the police had just registered the case and was trying to locate Shahzad. "Once we arrest him, we will be able to find out what he did with the money," said Padwal. When asked whether the accused would be booked under the Prize Chits and Money Circulation Schemes (Banning) Act, Padwal said the police will first verify if it was a fit case for the accused. "No victim contacted me. We registered the case soon after some people came to me," he said. However, it is learnt that a group of victims had to approach the state government to get one case registered. When asked whether police will attach Shahzad's properties, if any, or freez bank accounts, Padwal said," I have not been told about his properties or bank account details yet."


The Times of India, June 29, 2012