Court starts criminal proceedings against Simpy Bhardwaj, Nikhil Mahajan in Bitcoin-based Ponzi scam case

MUMBAI: A special PMLA court on Friday issued process against Simpy Bhardwaj, wife of Ajay Bhardwaj, Delhi businessman Nikhil Mahajan and two others, who were arrested in December in connection to a bitcoin-based ponzi scam in which the gang allegedly collected 80,000 bitcoins and diverted the funds worth ₹6,606 crore ($915 million) through nine overseas firms to purchase properties abroad.
Issuance of the process marks the beginning of criminal proceedings against the person concerned.
According to the FIR, late Amit Bhardwaj, director of M/s. Variabletch Pvt. Ltd and promotor-founder of gainbitcoin.com, hatched a criminal conspiracy with his associates and devised a computer software for mining virtual/digital / cryptocurrency “Bitcoin.”
The ED initiated an investigation into the ponzi scheme in 2018, based on multiple cases registered by Maharashtra and Delhi police against Variable Tech, late Amit Bhardwaj, Ajay Bhardwaj, Vivek Bhardwaj, Simpy Bhardwaj, Mahender Bhardwaj and other multi-level marketing agents.
Variable Tech allegedly lured investors by promising them high returns (10% monthly) in the form of the company’s cryptocurrency. The accused allegedly collected 80,000 bitcoins (valued at ₹6,606 crore as of November 2017) from unsuspecting investors. Thousands of investors lost their life savings after converting them into bitcoins to invest in the scheme. All the bitcoins were allegedly syphoned off.
While issuing the process against Simpy, the court observed that she was one of the conspirators who helped her husband, Ajay, the main accused who is absconding and that the collection and conversion of the bitcoin investment were nothing but proceeds of crime (POC), which subsequently, were layered and concealed in various online wallets without any disclosure.
According to the order copy, Mahajan, along with the other accused, was conducting seminars for propagating and promoting the scam in Dubai and Macau. “He (Mahajan) received POC to the tune of ₹98 Lakh to ₹1.30 crore, 30-40 Bitcoins valued at ₹3,29,464 in 2017 for conducting the promotional events for Gainbitcoin.com,” said the court, adding that these activities indicated that Mahajan acted as a platform for placing and layering illegal money with full knowledge regarding the source and how the same was raised.
Along with Simpy and Mahajan, the court also issued proceedings against Sandip Kumar and Ajay’s brother-in-law, Nitin Gaur, for aiding and assisting the other accused in the process of money laundering.
Owing to the role played by the four accused, special judge MG Deshpande asserted that there were sufficient grounds to proceed against them. “I am of the opinion that a clear case demonstrating important stages in the process of money-laundering i.e. placement, layering and integration, has been made out by the ED against the accused,” he added.