Economic Offences Wing



 

FOP Scambuster First Commitee Meeting

           On 04.09.2013 at 15.00 hrs., a meeting of FOP Scambuster commitee was conducted under the guidance of ADGP. EOW Dr. Prateep V. Philip, I.P.S., and decided to strengthen the Intelligence Network of EOW to expose the Criminal network system preying on the potential victims.  

                       Dr. Z. Annie Vijaya,I.P.S.,  Supdt. of Police, CCIW – CID,    Tmt. N. Kamini, I.P.S., Supdt. of Police, EOW – Units attended the meeting. 40 FOP Scambuster committee members participated.  

          Friends of Police Scambuster, new concept evolved by Dr. Prateep V. Philip, I.P.S., Addl. Director General of Police, EOW is brought to the fore of Economic Offences Wings to bust and expose fraudsters fraudulent activities. The concept aims to prevent the gullible public getting cheated and improve the relationship between the general public and the Police.  

Symptoms Of a  Healthy Financial Scheme (NBFCs, Financial Institutions, Co-operative Society Scheme & Symptoms of a Defaulting  / Fraud financial Institutions  / Co operative Society Scheme

S.No.

Symptoms of a genuine/healthy Company/Firm.

Symptoms of a fake/ defaulting /fraudulent Company/Firm.

1.

(i)   The company would be registered as per the provisions of Companies Act, 1956 either as a Private Limited or a Public Limited Company at the office of The Registrar of Companies which come under the Ministry of Corporate Affairs, New Delhi . (ii) The other small scale institutions would be registered as a firm with the office of District Registrar, coming Department of Registration, a State Subject.

The fake firms/companies merely use this license of registration as a token of authority in all their pamphlets, brochures, receipts etc and the state emblem in the license would be highlighted as an authority to mislead the innocent public. 

 

2.

Location at any places would attract genuine customers.

They will state that their place is located near Central Financial Institution like RBI, SEBI and LIC to give impression that they are legal.

They will name their Financial Establishment similar to established and recognized public sector companies in order to gain the confidence of the public.

3.

The promoters would insist furnishing of the personal documents to prove their nativity, PAN card, KYC etc.

No such documents would be insisted, instead the deposits alone will be promised by the staff.

4.

The interest rate would be fixed as per the RBI norms @ 12.5% per year.

The interest would be to the tune of 24% to 600% per year. Sometimes double the amount the deposited would be offered with in a span of one year.  Such attractive schemes would lure the innocent and gullible public as this is a means of making easy money with minimum investment and least energy spent by the common man.

5.

Only commissions/brokerage fees to the introducers/agents and complements of trivial nature are usually distributed.

The development officers/agents will be offered a very high commission to the rate of 5% to 25% of the collected deposits apart from offers of jewels, house flats, cars etc. as an incentive.

6.

Advertisement will be made selectively in the popular media, tabloids, T.V.channels etc.

Advertisement are transacted through hand bills, door to door canvass, brokers etc.   The prime focus would be ‘face to face interaction’ organized at popular posh hotels in cities and Kalyana Mandapams in Rural areas followed with extravagant lunch, dinners, gifts  etc. 

7.

These institutions will not indulge in sale of books, sale of lands or other materials which would cost more than 12.5% of yearly returns.

Liberal announcements of impractical schemes involving sale of books, house plots or other materials at the cost of 24 % to 600% of returns per annum.

8.

A minimum of Rs.2 Crores should be remitted to RBI for obtaining certificate of Registration.

There is no mandatory provisions for deposit or any security amount.

9.

These companies will restrict with a five years span of single time transaction as per RBI norms.

These companies/firms will be liberal in fixing the maturity period from 5 months to   10 years depending upon the aspirations of the depositors concerned.

10.

Offices will be moderately furnished with proper display boards, pasted  advertisements etc.

Most of the offices are lavishly decorated with no sign of any display materials except that of M.C.A. or District Registrar license.  Only oral communication will be made. Such tactics are used to avoid legal complications.

11.

Web sites will contain normal and  authorized percentage of interest offered.

Mostly decorative web sites with promises of very high percentage of interest is usually offered along with other material benefits.

12.

Once the receipts issued will never be exchanged or cancelled.  Only additional security documents will be issued.

Receipts issued at the time of deposits will be insisted for exchange with some other form of document to their convenience, as part of their criminal conspiracy. This reflects the malafide intention of the FEs not to repay the deposit amount.

13.

Normally annual returns filed with  the R.O.C/IT Dept/District Registrar and copy of the same can be demanded.

No such practice is exercised.

14.

The deposits will be channeled to  other genuine transactions, but not on investments on movable /immovable properties for personal gains.

On the contrary, the depositors fund will be siphoned and it will be invested in movable & immovable properties for personal benefits.

15.

No undue delay or dilatory tactics in disbursement of returns at the time of due date or maturity period.

Initial disbursement for the first three to six months will be very prompt; afterwards bouncing of cheque etc will be caused.  Oral promises /assurances and dilatory tactics will be adopted to convince the depositors for some time and finally the shutters will be down.

16.

There will be Legal Advisor and Auditors who would be accessible to the public and facilitate communication between the partners and depositors.

Insufficient knowledge and experience in the business field couple with ineffective and in the pretext of Legal Advisor and Auditors, the FE would function.

17.

Photo with other details of the existing Directors of a financial Establishment will be kept in a conspicuous place of the Head Office.

Their business transactions will not be transparent. Inconspicuousness and apparent projection of legal business would be the focus.

18.

Announcement of practicable and genuine schemes which are easily understandable.  No announcement of attractive gifts or unreasonable incentives.

They will fully concentrate in distributing Pamphlets, notices and give advertisements in local vernacular magazines.  Their schemes will be unpractical, and impossible. False assurances and free gifts to attract the public in an expensive and wide manner would be announced.  Huge commissions would be offered to the  middlemen/agents etc.

19.

The Directors/partners will be easily accessible to the general public

The partners and Directors of the financial establishment will be illiterate, semiliterate, unethical or notorious or individual who will conduct the financial Establishment. Their only aim is collection of money from the depositors and to make profit for their personal gains. Besides, to attract the public and to lure them, money would be spend to gain cheap publicity. Behavioral anomalies can be found in people suddenly changing their lifestyles.  For eg. Purchasing an expensive cars etc.

20.

Normally the Directors/partners will be residing within the locality/area/District

Mostly, the Directors/Partners will not be residing within the locality/area/District. There will be no proper accounting of income sources, immovable and movable properties, etc. They will not have any sufficient knowledge, experience in their business field.

21.

The Name and address of the Directors/partners will be known to the general public.

Mostly, they will take a small room or house in other State on rent, furnish the address of the firm/company as office/administrative office address, register the company and run their office in the said address.  By using this office address, they will open bank accounts, etc. and collect deposits /amount from the investors/ depositors.

 

22.

They will furnish entire details of the staff particulars to the departments concerned and maintain attendance register; proper salary accounts etc. and furnish the same to the Government department officials like, income tax, sales tax, ESI, PF, Inspector of Factories etc.

Mostly, they will not append their signatures in the important documents issued to the depositors and they will direct their staff / agents to sign and often they change their staff and appoint new staff especially, women who would gain the confidence of the common man.

23.

They will maintain proper accounts registers and account for each and every incomes and expenses and file the same through their Auditors, Legal Officers, etc.

They will have many bank accounts in their names, family members, benami names, etc.  Diversion of the funds would be common phenomena.

24.

Whenever the complaints are received from the customers and the company will provide proper assistance/ guidance / remedy etc. in prompt manner

They will start sister concerns and divert the amount to them in order to hide their money transactions,

If the depositor/investor asks any important question about the business they will inform him that the facts are known to other partner or director who is not available at the time.

25.

At any point of time, the investor/depositor can submit their unwillingness and the deposit/investment amount will be returned in proper manner

The deposit/investment money will not be refunded in time. The depositor usually faces problems in getting back his money. Postponement of repayment and insistence on reinvestment are the usual and common practice to cheat the public.