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Screenshot of a breaking news alert e-mail from Q2 2017
The ongoing police investigation into the Chit Fund swindle at India’s Crown Credit Cooperative Society has grown, as has the suspected size of the fraud.
While the remand in custody of Crown Credit’s owner and President Jagjit Singh and seven other suspects has been extended once again, India police seem hot on the track of locating a good portion of the missing client funds. Or at least determining what happened to the funds which Indian retail investors felt they were placing into high yielding ‘Chit Funds’ at Crown Credit.
The Times of India is reporting that India police have now arrested two more people suspected of helping transfer money from Crown Credit to FCA-regulated broker TradeNext, co-owned (40%) by Jagjit Singh (pictured at right).
The two, Lalit Kumar and Partap (Vijay) Singh, are suspected of using Hawala brokers to move millions of dollars from Crown Credit via Dubai to TradeNext in the UK, and have apparently confessed to having arranged the transfers.
Hawala, meaning transfer, is an informal money transfer system based on a large network of money brokers primarily located in the Middle East, parts of Africa, and India. It operates outside of traditional banking and remittance systems.
It remains unclear if the money was transferred and deposited into TradeNext trading accounts, or in equity investments made in the company itself. It is also unclear if anyone in management or on the board of TradeNext (other than Jagjit Singh himself) were aware of the money transfers.
TradeNext itself, as was exclusively reported at LeapRate, is dealing with its own problems as losses incurred due to the SNB crisis as well as some failed campaigns over the course of 2015 led TradeNext to shut down its retail forex business and return all client funds.
The Times of India also reports that the size of the suspected fraud at Crown Credit now sits at more than Rs 100 crore, or about USD $15 million.
Stay tuned to LeapRate as we continue to cover this story as it unfolds.