Mumbai, May 17: The Enforcement Directorate (ED) has filed a prosecution complaint (PC) before a special Prevention of Money Laundering Act (PMLA) court in Mumbai in connection with the alleged Rs 200-crore QFON App digital investment Ponzi scam, naming 12 accused, including arrested accused Sudhir Kotadiya and Umang Kotadiya, who were apprehended by the agency earlier this year.
Probe linked to Thane police FIR
The money laundering probe stems from an FIR registered by the Thane police in December 2024. According to investigators, the alleged investment scheme lured investors across Maharashtra and Gujarat with promises of assured monthly returns ranging from 2 per cent to 10 per cent, while projecting itself as a legitimate technology-driven business involved in app development and online advertising revenue.
Officials, however, said there was no genuine commercial activity and that the structure functioned as a classic Ponzi scheme, where returns to earlier investors were allegedly paid using funds collected from newly enrolled investors in order to maintain confidence in the scheme.
According to the ED, the fraudulent model was initially launched around 2020 under the name “APPBULL” and was later expanded through QFON App and associated entities. The accused allegedly used multi-level marketing (MLM)-style referral systems and digital marketing campaigns to rapidly expand their network. Social media platforms such as Facebook, Instagram, LinkedIn, and X were allegedly used extensively for promotional campaigns, online presentations, investor meetings, and seminars to project the entities as legitimate technology-driven businesses involved in app development, IT services, and digital advertisement revenue generation. Existing investors were allegedly encouraged to bring in new participants in exchange for referral commissions and recurring profit-sharing benefits, resulting in a continuous inflow of funds into the scheme.
ED alleges large-scale investor fraud
The probe revealed that the operation spread across multiple locations in Maharashtra and Gujarat, including Pune, Ahmedabad, Rajkot, Surat, and Morbi. The ED estimated the total proceeds of crime generated through the scheme to be more than Rs 200 crore.
Investigators said one investor network operating from Narayangaon in Pune district alone allegedly mobilised around Rs 180 crore, of which nearly Rs 120 crore was allegedly invested in cash.
The ED further alleged that the accused had fled to Dubai and later returned to India through the Nepal route while evading investigation. Following what the agency described as “intelligence-based tracking”, Sudhir Kotadiya and Umang Kotadiya were arrested on March 11.
The agency said non-bailable warrants have also been issued against alleged mastermind Jaysukh Sakhariya and his wife Niru Sakhariya, who remain absconding.
Cash transactions and Angadiya channels under scanner
According to the investigation, the accused allegedly relied heavily on cash transactions and Angadiya channels for the collection and movement of investor funds. Investors were allegedly persuaded to invest in cash by being offered higher returns and assurances of faster payouts and tax benefits.
The ED claimed that the cash was routed across cities including Pune, Ahmedabad, Rajkot, Morbi, and Surat through informal cash delivery systems and intermediaries.
Officials identified more than 58 bank accounts and third-party entities allegedly used to layer and route funds, with over Rs 40 crore traced through banking channels alone. In addition, investigators identified a cash trail exceeding Rs 23 crore through Angadiya operators, though officials believe the actual figure could be significantly higher.
Digital evidence recovered during searches, including Telegram chats, WhatsApp messages, Excel sheets, and handwritten records, allegedly showed detailed tracking of investor funds, commissions, and cash movements.
During searches conducted across 18 locations in Gujarat and Maharashtra, the ED seized incriminating documents, digital evidence, and cash worth Rs 2.51 crore. The agency has also provisionally attached assets worth over Rs 32 crore, including properties and fixed deposits, many of which were allegedly held in the names of family members and associates.
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Officials said the investigation is now focused on identifying additional beneficiaries, tracing the complete money trail, and examining the role of intermediaries who allegedly facilitated the routing of funds.
The case, investigators said, highlights how digital branding, referral marketing, and cash-based systems were allegedly combined to execute a large-scale financial fraud impacting a wide network of investors.
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