37-year-old Pal, a resident of Shahajanpur in Uttar Pradesh who was on the run for the last 28 months, was arrested Monday from Connaught Place after months of sustained investigation by a Crime Branch team led by DCP Kumar Gyanesh, police said Tuesday.
Pal and his brother Ram Niwas Pal, who duped people through a online marketing firm, also had Bollywood links as leading stars would perform at lavish functions held by them for investors and agents to lure more people and the siphoned off money was then also invested in many films, police said.
"He (Pal) was involved in a number of white collar crimes. He was in hiding in Dehradun and is wanted in at least eights cases of Mumbai, Andhra Pradesh, Haryana, Madhya Pradesh. He is one of the masterminds of the 'Speak Asia' scam and has also created a number of companies with his brother in order to cheat lakhs of innocent people," said Additional Commissioner of Police (Crime) Ravindra Yadav.
Both the brothers Ram Sumiran Pal and Ram Niwas Pal became part of the top management of multi-level marketin companies registered in foreign countries like Singapore, Italy and Brazil, which by their international profile, attracted more investors and also helped them in money laundering at a later stage, police said.
A company namely Speak Asia, registered in Singapore, was introduced in India in early 2010 by these two brothers with the help of one Manoj Sharma.
Speak Asia was an online survey marketing company which sold web subscription for Rs 11000 each and in return the investor had to fill survey forms, which were later found to be fake, for certain MNCs for promised annual payment of Rs 52000. After paying few initial investors, Speak Asia wrapped up its operation in India around mid-2011.
According to police, 'Speak Asia' had remitted over Rs 900 crore to Singapore. The money was sent from India to the banks in Singapore and from there to Dubai, Italy and UK. However, the money came back from UK again to UAE (Dubai) and to India.
Ram Sumiran Pal is the first senior office bearer of 'Speak Asia' to be arrested in the matter, said Yadav.
They used to have seminars and functions at different places. The promoters of the company, including Ram Simra Pal, used to travel all over the country and address meetings and seminars of their agents and investors in luxury hotels all over India. They acted like big tycoons having a lavish lifestyle to encourage the agents to bring more and more innocent people in the net.
"On one such occasion, the promoters held a meeting of the investors in Goa. They hired a special train to Goa forthe investors and an exclusive portion of beach of a resort was booked.
"The open invitation to attend this meeting was given on the portal of the company and this was attended by thousands of people and their expenses were borne by the company," said Yadav.
In order to entertain the investors, leading stars of Bollywood performed in this programme. "There is no doubt that booking a special train and performances by film stars for a big bash at a beach resort in Goa was done to attract more eyeballs and therefore, hook more gullible people, who might choose to join the MLM scheme," he said.
The company had duped over 24 lakh investors. The amount of scam has gone up to Rs 2,276 crores. A number of cases were registered in different states. Thereafter, all the senior office bearers of the companies went into hiding.
As per DCP Kumar Gyanesh, after the registration of criminal cases against the company in June 2011, 'Speak Asia' shut down its business, but its Directors and office bearers handled the internet portal and told investors that no case has been made out against the firm and the firm will be restarted soon.
Despite vehemently denying the fact that Speak Asia was not just making up its surveys and relying on new membership fees to generate profit, it has come to light that Speak Asia's surveys were indeed fake and were just an eye wash, he said.
The Economic Offences Wing (EOW) Mumbai is investigating maximum number of cases of 'Speak Asia' fraud case since the last 28 months. It is reported that more than 210 bank accounts containing over Rs 142 crores have been frozen. Besides this, another 150 bank accounts are reportedly under investigation over suspicion of funds being transferred in the scam, said Gyanesh.
After escape from Mumbai, Ram Sumiran Pal settled in Dehradun with his in-laws. He invested the ill gotten money in real estate and started construction projects in Dehradun. He also purchased office and residential spaces in Mumbai, besides agriculture and commercial land in Shajahanpur, UP where he wanted to construct a luxury hotel, police said.
As per investigation, the money landed in UAE in the bank accounts and then in different bank accounts of certain entities, which were called Master Collecting Agents (MCA).
These MCAs in turn used to transfer and adjust the amounts in different bank accounts. From the information available, Directorate of Revenue Intelligence and other similar agencies are already investigating the matter to unravel the money trails.
"In order to further cheat the investors and facilitate the illegal laundering of money, the promoters had also purchased and used other International companies like Ad-Matrix Pvt. Ltd., Seven Rings International registered in Singapore and Italy," said Yadav.
During his interrogation, Pal told police that he had done Masters in Marketing Management (MMM) from Mumbai. His brother Ram Niwas was also working in Multinational Banks in Mumbai. After 2008, he started working with his brother and formed companies in association with other partners.
They used to buy the companies registered in other countries. In similar manner, they became part of top management of the company 'Speak Asia' registered in Singapore, but the company was actually having operations only in India.
Pal allegedly told police that the company used to lure gullible people on the pretext of paying them high returns. They kept the membership fee restricted to Rs 11,000 so that even middle class people could associate themselves.
A candidate had to pay initially Rs 11,000 and he used to get a password and using this, he could open an account on the site of the company.
"At least two survey forms to each of the members were provided. For completing each survey form, a member used to get a return of more than Rs 4000 per month. Besides this, he could make further members and for each membership, he got Rs 1000 as commission and further share from the surveys forms submitted by the person referred by him.
"From the investigation, it has been found that all the surveys conducted by the company were fake and only in order to lure the people. They opened their franchises all over India and offered good commissions at different stages to their agents, so that they can lure the investors even from the remote areas of India," said Yadav.
Interestingly, the promoters who had collected huge amounts of money from all corners of the country, even financed some Hindi films. However, before they could get the returns, they were forced to escape. The actors connected with the film had to face inquiry by Mumbai police, said Yadav.
"During the period of his hiding, whenever he (Pal) felt that police was closing in on him, he used to go to Malaysia.
Being aware of his "wanted" status, he used to take flight from Kathmandu, Nepal," said Gyanesh.
Till now, about a dozen FIRs have been registered at Thane in Maharashtra and other parts of the country including Vijaywada (AP), Hyderabad (AP), Jabalpur (MP) and Lucknow against 'Speak Asia' and others. Mumbai Police has been informed about his arrest.
According Gyanesh, further investigation is underway and police of other states are being informed about his arrest. From the intensive interrogation, some vital clues about other wanted people have surfaced.
Teams have been sent to different parts of the country and some more arrests of promoters of these companies are expected in days to come.