Torres Jewellery, a jewellery chain operating six stores in Mumbai and nearby areas allegedly defrauded 1.25 lakh investors of over Rs 1,000 crore through a Ponzi scheme, promising high returns. The company at the centre of the controversy, then shifted blame to its CEO and other employees, accusing them of running the fraudulent scheme and vandalizing its stores.
The Mumbai police have registered a case against the holding company, Platinum Hern Private Limited and its two directors, CEO, general manager and a store in-charge. They have been booked under charges of cheating, criminal conspiracy and other related offences.
Details On The Fraudulent Scheme
Torres Jewellery opened its six stores in February last year, selling gemstone jewellery. Alongside their regular business, they offered a bonus scheme to attract investments. Under this scheme, a customer investing Rs 1 lakh would receive a pendant with a moissanite stone, valued at Rs 10,000, according to reports. However, they also allegedly informed the customers that these stones were fake and were just given to them as a token of their investment.
Investors were lured with referral bonuses to rope in more customers. The company also promised weekly payouts of 7% interest on their investments, which later increased to 11%. While initial payouts were made for some time, the payments stopped around two weeks ago.
Torres uploaded a video on YouTube recently, announcing that investments made before January 5 would continue earning 11% interest, while investments afterwards would see reduced returns. They also offered an extra 0.5% interest for cash payments, enticing more customers to invest. However, on January 6, all Torres stores were shut, leaving investors stranded.
The Impact Of Ponzi Scheme
Most of the affected investors come from lower-middle-class backgrounds, including vegetable sellers and small traders. They were drawn in by the promise of higher returns, with investments ranging from a few thousand rupees to crores. Hundreds of these investors gathered at the Torres Jewellery store in Dadar yesterday, demanding their money back.
3 Arrested, Kingpins Fled To Ukraine
Three individuals, Sarvesh Ashok Surve, Tanya Casatova, and Valentina Kumar, have been arrested in the financial fraud case, while alleged masterminds, Ukrainian nationals John Carter and Victoria Kowalenko, have fled the country.
Lookout Circulars (LOCs) have been issued for their arrest. The Economic Offenses Wing (EOW) is investigating the case, with an FIR filed under the Maharashtra Protection of Depositors Act and various sections of the Bharatiya Nyaya Sanhita (BNS).
Torres Company’s Response Over Allegations
In the aftermath of the scandal, Torres Jewellery has claimed that rogue employees, including senior management, were responsible for the fraud and the closure of its stores. The company has announced on its official YouTube and Instagram accounts that operations will soon resume, and bonus payments to investors will be reinstated.
While Torres attempts damage control, police investigations are underway to uncover the extent of the fraud and bring the accused to justice. Investors, meanwhile, wait anxiously for their money to be returned.