2 weeks ago
ED Arrests Shivanand Neelannavar in Multi-State Ponzi Scheme Case
Some grown-ups in India started a company that promised people easy money.
They told people that if they gave money, they would get three extra coins every month.
Many people trusted them and gave lots of money.
But the company was not really using the money in a good way.
Instead, it paid earlier customers with money taken from new customers.
This trick is called a Ponzi scheme, and it is not allowed.
The police called a special agency called the Enforcement Directorate to look into it.
That agency arrested the main person in charge.
He will stay with the officers for 12 days while they ask questions and search for the missing money.
Investigators think the scheme pulled in money from many states across India.
The Directorate of Enforcement arrested Shivanand Siddappa Neelannavar on August 13 under Section 19 of the Prevention of Money Laundering Act, 2002.
The Special Court (PMLA) in Mangaluru remanded Neelannavar to ED custody for 12 days, till August 24.
Neelannavar was the 'whole and sole' person managing the fund flow of M/s Shivam Associates, the firm alleged to have run the scheme.
The firm allegedly collected Rs. 2,110.97 Crore from public investors by falsely promising monthly returns of 3 percent.
The ED said fresh deposits were diverted to pay earlier investors' interest after the firm suffered severe stock market losses since 2019.
The scheme allegedly used a digital mapping system and referral network across Karnataka, Maharashtra, Goa, and Chhattisgarh, with agents paid 0.5 percent referral commission.
Alleged proceeds were used to buy luxury vehicles, construct high-value bungalows, purchase properties, and fund movie productions.
- Who
- The Directorate of Enforcement (ED), Mangaluru Sub Zonal Office, arrested Shivanand Siddappa Neelannavar, majority partner of M/s Shivam Associates.
- What
- Neelannavar was arrested in connection with an alleged multi-state, multi-crore Ponzi-style investment scheme that lured investors with promises of high and assured returns.
- Where
- The arrest and court proceedings took place in Karnataka (Belagavi and Mangaluru); the scheme allegedly operated across Karnataka, Maharashtra, Goa, and Chhattisgarh.
- When
- He was arrested on August 13 and remanded to ED custody for 12 days, till August 24.
- Why
- The firm allegedly mobilized Rs. 2,110.97 Crore by promising 3 percent monthly returns, then used fresh deposits to pay earlier investors after suffering stock market losses since 2019.
Key facts
- Arrested person
- Shivanand Siddappa Neelannavar
- Arresting agency
- Directorate of Enforcement (ED), Mangaluru Sub Zonal Office
- Arrest date
- August 13
- Legal provision
- Section 19, Prevention of Money Laundering Act (PMLA), 2002
- Remand
- 12 days ED custody, till August 24
- Involved firm
- M/s Shivam Associates
- Funds mobilized
- Rs. 2,110.97 Crore
- Promised returns
- 3 percent monthly; 0.5 percent referral commission to agents
- States involved
- Karnataka, Maharashtra, Goa, Chhattisgarh
- Court
- Special Court (PMLA), Mangaluru
- Basis of investigation
- FIR by Malamaruthi Police Station, Belagavi City
Quotes
Shivanand Siddappa Neelannavar
Defendant arrested in the Ponzi scheme
“"Investigation under PMLA, 2002, reveals that the partnership firm illicitly mobilized a staggering Rs. 2,110.97 Crore from public investors by falsely promising astronomical monthly returns of 3 percent."”
deccanchronicle.com
ED Press Statement
Official statement from the Directorate of Enforcement
“"M/s. Shivam Associates operated an unsustainable Ponzi-style scheme, collecting Rs. 2,110.97 Crore from investors while only accounting for a fraction in repayments."”
deccanchronicle.com
Sources
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