Massive Online Fraud Unearthed In Noida – Rs 3700 Crore Cheated From 7 Lakh People by Social Trade
“My formula for success is rise early, work late and strike oil.” – JP Getty, founder Getty Oil Company.
The proverbial ‘striking oil’ mentality has seeped so much into our subconscious mind, that even illegal, completely fraud way of making money seems like promising opportunity to become rich.
And this false hope often leads to distress.
7 lakh people has just found that this fact as true as a company named Social Trade duped them of Rs 3700 crore. Noida police unearthed this scam involving multi-level marketing which used technical jargon of digital marketing world to lure customers into paying them heavy sums of money.
The company was registered as Ablaze Info Solutions Limited, and was located in Sector 63 in Noida. A special Task Force under UP Police has arrested their founder Abhinav Mittal and his two accomplices: Shridhar Prasad and Mahesh Dayal.
Superintendent of Police (Uttar Pradesh STF) Triveni Singh, said, “Registered under the name of Ablaze Info Solutions Pvt Ltd. in Noida, they used to constantly change the portal’s name. So far they defrauded over 6.5 lakh people collecting around Rs 3,700 crore,”
Their main portal – SocialTrade.biz is still operating.
How Did The Scam Worked?
There were two levels of operations involved here: a) Promise of easy money b) Capture other people who are also looking for easy money.
First of all, the new user had to register themselves by paying Rs 5750 to Rs 57,500 (depending on the greed). In return, the user was assured guaranteed income by clicking some advertisement links. Rs 5 per click was promised by the company, and as the user paid more money to get registered, he received more such links to click in a day.
The bait was set right there: You were promised easy money, for doing nothing hard. Simply click on ads, and voila! See money pouring in. But the ignorant users failed to understand how digital advertisements work: The money is not earned by simply clicking links, but by selling products. And unfortunately, the product here was laziness and greed, which the founders of Social Trade optimally milked.
If this was unethical, then the second part of operation was illegal: Multi Level Marketing. The registered users were lured even more by asking them to join members under them, via left and right binary system. A perfect MLM operation which is actually illegal in India under The Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
The promoters of this fraud encouraged more easy money by luring others into this ponzi scam, and thereby getting 5-50% of their income. And the way network marketing works in India, this ponzi, unethical scheme soon exploded into Rs 3700 crore scam.
As per reports, Income Tax Department, RBI and market regulator SEBI has been informed about this scam, and till now, Rs 500 crore has been recovered from one of their banks.
Some of the other companies created to dupe people by using the same modus operandi included: freehub.com, intmaart.com frenzzup.com, 3W.com etc.