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Daily fraud update: 2nd October

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Indian police file charges over alleged scam

Those accused of being behind an alleged foreign exchange scam in India have had charges levied against them.

The alleged fraud focuses on a firm called Kamakshi Forex Pvt Ltd, which supposedly scammed just under 1,000 people out of money.

The firm, which is based in the city of Margao in the western Indian state of Goa, is accused of causing financial losses of around Rs 55 crore – which is equivalent to around $7.7m and just over £6m.

Now, one of the country’s senior officials Nilesh Raiker as well as his wife Nilima and his mother Rekha stand accused.

They appeared before a magistrate on Monday of this week, and they face charges which break several aspects of the Indian Penal Code – including charges of cheating.

It is understood that local police in the country have looked into more than 10 distinct cases around the alleged scam.

The trio have been arrested before as part of the investigation into the alleged crimes.

The case was first noted by authorities back in February of 2016, when some of those who had used the services of the firm found that their cheques were bouncing.

Despite promises from Nilesh that customers would receive their cash, they did not – and the office later shut down.

According to local press reports, the firm allegedly promised its customers high returns on investment in the form of profit.

Fine for Longfin after SEC action

A US firm which posed as a legitimate cryptocurrency provider but which scammed its customers has been ordered to pay nearly $7m.

Longfin, which is described by the American regulator, the Securities and Exchange Commission (SEC), as a “purported cryptocurrency company” which offered “sham commodities transactions”, was told last week that it would be hit with the fine.

It will have to pay the precise sum of $3,532,235 in disgorgement and $3,243,613 as a civil money penalty.

According to the accusations levied against it by the SEC, Longfin managed to get what was known as a Regulation A+ approval from the regulator by telling it that it was managed mainly on US soil.

However, this turned out to be untrue – and it was in fact managed in other jurisdictions.

Allegedly, senior officials at the company then gave away hundreds of thousands of shares in the company without charge – and it also supposedly lied about how many shareholders it had in order to get itself listed on the Nasdaq stock exchange.

In a statement, the SEC referred to the actions of the firm’s CEO Venkata S. Meenavalli – who now also faces criminal charges.

“The SEC’s complaint also alleged that Longfin and Meenavalli recorded more than $66 million in fictitious revenue from sham commodities transaction, amounting to more than 90% of Longfin’s total 2017 reported revenue”, it said.

The criminal case continues at present.