IMA scam: Chronicle of a fraud

Hundreds of people are lining up every morning at the police commissioner’s office every day to file cheating complaints against I Monetary Advisory (IMA), the Ponzi company that just went bust.

. Metrolife visited the office on Infantry Road, and saw the complainants waiting patiently in the queue to submit details of their investments.

. So far, police have received 46,000 complaints of cheating in the IMA Ponzi case.

. ‘We invested all savings after only son died’

. Fifty-six-year-old Shamem Khatoon, a native of Kurnool in Telangana, invested Rs 10 lakh in IMA about eight months ago. She was encouraged to invest by friends and relatives who had got good profits on their deposits. “I became suspicious after the interest stopped coming four months ago. Every time I tried to call them I used to get an automated message. If anybody ever answered the phone, they would buy time, saying interest would be paid after Ramzan,” says Shamem. Once, she was told it was election time and the company was under loss. Shamim invested the money after her only son passed away. “We invested whatever we had and are now in dire straits,” Shamem says.

. ‘Interest was way higher than at the banks’

. Collectively, the families of Saira and Sarfaroz have invested close to Rs 18 lakhs in IMA. “We were happy with the high-interest our friends and families were getting. We thought it would be a good option to invest rather than keep it in the bank,” says Sarfaroz. Saira reasons the concept of investing in business and sharing the profits lured her. “We invested in a quarterly return scheme and got it for two quarters and then we didn’t hear from them,” says Saira.

. ‘They paid interest promptly, so we trusted them’

. A resident of Hyderabad, Mohammed Ayub’s parents invested Rs 5 lakh in IMA some months ago. “We began worrying when payments were delayed and the rate of interest suddenly came down. I was getting three per cent a month, and it dipped to one per cent. Repeated calls went unanswered and that’s when I decided to come down and close the account,” says Mohammed Ayub. He couldn’t. IMA offices were shut. Initially, the company was responsive and sent profits on the first of every month. “That made us trust them,” Ayub says.

. ‘No money even to come and complain’

. Rajashekar B S and his wife Anitha invested about Rs 4 lakh in 2017. “Today, I had to borrow Rs 100 to come and register a complaint. This is how bad our situation is,” says Rajashekar, who works as a garment trader. “I decided to invest in this after my friends told us about the returns,” explains Rajashekar. Anitha says the interest helped her manage her home better. “We have to take care of the education of three children and look after our aged parents,” she says.

. Family from Puducherry invested Rs 28 lakh

. A native of Cuddalore, Sayeed Ibrahim and his parents initially invested Rs 13 lakh. They got good returns and invested Rs 14 lakh the second time. He has personally put in Rs 1 lakh.

. “The documents were credible and said the company was the highest tax-payer. Now, we stand to lose Rs 28 lakh. Worried about my father, I didn’t inform him about the company going bust for two days after I came to know about it,” says Sayeed. His father has a spinal problem and has spent Rs 50 lakh on treatment. “I didn’t want him to have another shock,” says Sayeed.

. IMA vs banks

. I Monetory Advisory lured Muslim investors by telling them they were partners. You don’t get interest, which Islam doesn’t encourage, but you get profits, founder Mansoor Khan told investors. The profits his 13-year-old company gave out amounted to at least to 3 per cent a month (or 36 per cent annually, as against 4 to 6 per cent given by banks on fixed deposits).

. Prominent Karnataka politicians with IMA links

. R Roshan Baig

. Congress leader (now suspended for talking against party elders)

. In a video, Mansoor Khan says MLA Baig and officials took Rs 400 crore as bribes. Baig has denied the charge and demanded a CBI inquiry into the scandal.

. B Z Zameer Ahmed

. Minorities welfare minister

. A bigtime tour operator with a fleet of buses, Zameer says he sold a plot to Manzoor Khan for Rs 9.36 crore, and has business links with him, but has done nothing wrong.

. R V Deshpande

. Congress stalwart and revenue minister

. Met Mansoor Khan at the behest of Baig. Khan had sought help to get a Rs 600 crore loan. Deshpande tried to help Khan ‘within the legal framework’ because Baig said ‘he was of good character.’

. Many give up on legal action

. Siji Malayil, a criminal lawyer, says the state government has the power to confiscate property, and set up a special court to try the frauds. Recovery is tedious because the frauds hide their money effectively, sometimes by parking it with trusted people. He cautions people against investing in dubious schemes. “You know when somebody is offering unbelievably high returns, it is a scam,” he cautions. Poor people give up after a time because they don’t have the financial resources to pursue legal action, he says.

. 46,000 complaints in 11 days

. Pratap R, probationary sub-inspector at the Commercial Street police station, is in charge of receiving complaints at the special IMA desk.”Some have lost Rs 5 lakh and others have lost Rs 1 crore,” he says. The complainants are mostly from middle-class and lower-class Muslim families. Auto drivers and those worried about medical expenses have put in a lot of money. Pratap says complaints are coming in from Tamil Nadu, Andhra Pradesh and Puducherry as well.

. Politicians’ reprehensible role

. How do Ponzi scams thrive? They build trust by getting bigwigs involved in it.

. In the IMA case, the man running the empire, Mansoor Khan, was seen photographed with several politicians and Muslim clergymen. Congress leaders Roshan Baig (since suspended), R V Deshpande and even Chief Minister Kumaraswamy appeared at public events with Mansoor Khan. Such actions instil confidence in investors.”People who have benefited from investing act as ambassadors. At a school adopted by the IMA, the management told parents not to give a donation but to invest in IMA schemes,” a police officer told Metrolife. More such schemes are thriving in Bengaluru. People won’t talk about them till they go bust, says the officer.

. Punishment

. Imprisonment for financial crimes such as the one IMA is accused of could extend to a fine and up to 10 years in jail, a lawyer says.

. Gone bust

. In about a year, Bengaluru has seen many schemes going bust: Ambient (scam extent Rs 500 crore), Vikram Investments (Rs 350 to Rs 400 crore) and now IMA (at least Rs 2,000 crore).