A former shipping captain was recently defrauded of Rs. 37 lakh through a fake forex trading app. The accused, Satish Gupta, was arrested by the Western Regional Cyber Police for duping the company captain.
The cyber police traced Rs. 27 lakhs of the lost money and arrested two more suspects who had facilitated the fraud, like Gupta. Forex trading scams like this are expected as a growing number of scammers are misusing the industry, taking advantage of unsuspected investors.
In this article, we will explain the details of forex fraud, the proactive role played by the Mumbai police, the legal actions and charges against the arrested individuals, and the importance of public awareness regarding forex scams.
Scam Details and Deceptive Tactics
Forex fraud involves fraudulent activities that occur within the forex trading space. Several high-profile cases of forex fraud use social engineering to operate the scam. The blossoming industry is filled with money laundering potential, targeted by scammers and fraudsters.
There are different kinds of forex frauds, including front-end forex frauds, where scammers mispresent their identities and offerings via social media or advertisements, and backend forex fraud, where fraudsters manipulate authentication data and logins, taking over legitimate forex trading accounts or conduct illegal trading at activities.
Mumbai Police Investigation Forex Scams
The Mumbai Police officials arrested the accused, Satish Gupta, based on a complaint filed by a 67-year-old man who works in the shipping company as a captain. The captain was lured by the promise of making daily profits of 3% to 8% on investments and agreed to carry out a forex trade.
The accused then instructed him to download a fake forex trading app and deposit $27.71 lakh from his bank account and another Rs. 9 lakhs from his wife’s account. When the captain tried to withdraw his funds, he faced difficulties. A case was registered with the Mumbai Police upon discovering that no such office name of the shipping company existed. Mumbai Police arrested two people facilitating the money transfer, and during the investigation, Satish Gupta emerged as the third accused and was later suspended from Navi Mumbai.
The complainant, a 67-year-old man who works as a captain in the shipping company, received a call in September from an identified number named Rahul Sharma. Sharma convinced the complainant to invest in foreign exchange through his forex trading app to get a bonus of $300 and profit margins ranging between Rs.50,000 to Rs. 200,000. He agreed to invest and hoped to make a profit.
After the app was downloaded, according to the instructions given by the caller, the complainant deposited his funds from his and his wife’s bank accounts in the app. According to the Mumbai Police, the app displayed a profit of Rs. 700,000 immediately after the investment was complete. However, at the time of withdrawal, the complainant failed to receive his funds back. The complainant also mentioned to the Mumbai police that he insisted Rahul Sharma meet and fix the issue, but the accused evaded it.
Legal Actions and Charges
According to the Foreign Exchange Management Act of 1999, forex trading on unauthorized platforms or fake forex trading apps is considered a penal offense. Exchanging foreign pairs or currencies that are not permitted is a punishable offense. Individuals may get fined up to $10,000 for the day the trades occurred.
The exact amount shall be levied on all days of violation. While forex trading is legal in India, unauthorized brokers and fake forex trading apps failing to comply with regulatory compliances automatically become penal offenses under FEMA.
Public Awareness and Caution
Raising awareness and educating the public are essential strategies to prevent falling victim to deceptive, false practices. Choosing a regulated forex broker and forex trading app authorized and licensed by a well-known authority is highly recommended.
Additionally, it is the sole responsibility of the investors to protect themselves from fraudulent foreign exchange schemes. They must keep themselves updated with the RBI’s Alert List that features the unauthorized forex trading platforms in India and avoid making trades on fake forex trading apps and websites.
With the rising popularity of forex trading, thousands of scam projects are waiting to loot investors by stealing their financial information. The recent fraud forex scam involving the former shipping captain in Mumbai poses another red flag.
Forex trading is inherently risky, so investors must look out for fake platforms that promise risk-free investments, unsolicited offers, unrealistic returns on investments, and inconclusive background information. Beware of these red flags while choosing a forex trading website or app, and follow RBI’s Alert List that mentions all the unauthorized forex trading platforms in India.