Ponzi scheme & Crypto currency
An STR was raised by XYZ bank on an entity, namely ABC, as complaints were received by the bank through the Prime Minister’s Delivery Units (PMDU) and the complaint portal of the Company Registry (SECP) that the entity ABC Trading was involved in the unlawful activities of soliciting unauthorised deposits from public offering promising unrealistically hefty returns on investments. As per the website of ABC trading, it was dealing in the sale/purchase and investment in cryptocurrencies and also offered wallet facilities and ATM facilities for cryptocurrencies in different jurisdictions. ABC Trading was not found to be registered with the Securities & Exchange Commission of Pakistan (SECP). It was identified through complaints that the entity was working in the jurisdiction presumably through multiple different incorporated companies while their affairs are run by three individuals including Mr. SR, his wife Mrs. ZK and his son Mr. AW. Furthermore, multiple STRs were also reported by different banks on Mr. SR and his family members based on their involvement in Ponzi schemes and cryptocurrencies on a large scale. Mr. SR had opened 70 bank accounts during the period 2011 to 2020 where the funds were mainly credited through online cash coming from different cities of the jurisdiction and debits to the accounts were made through clearing transactions. 59 out of 70 accounts were opened during the period 2018 to 2020. A huge turnover was observed in the accounts. Most of the funds were credited through online cash and debited through centralised inward clearing, pay orders and cash. The same business address was provided in the account opening forms for diversified businesses run by these individuals under different business names. Upon a search in Inland Revenue’s database of taxpayers, it was discovered that a nominal amount of tax was paid by the businesses. The financial intelligence was shared with relevant law enforcement agencies and the Central Bank in order to investigate the matter.