The Enforcement Directorate (ED) has arrested Sudhir Dalsukhbhai Kotadiya and Umang Santibhai Kotadiya in connection with a Rs 183-crore digital Ponzi scheme linked to QFON App Limited and related entities. The arrests were made on March 11 under the Prevention of Money Laundering Act, 2002. The accused were produced before a special court in Mumbai, which remanded them to ED custody for eight days, till March 20, for further investigation.
The case stems from a police complaint registered in December 2024 in Maharashtra’s Thane. The FIR accused Sudhir Kotadiya, Umang Kotadiya, Jaysukh Sakhariya and others of running a fraudulent digital investment scheme that allegedly collected large sums from investors in Gujarat and Maharashtra.
The complaint invoked several provisions of the Indian Penal Code and the Maharashtra Protection of Interest of Depositors Act, 1999.
According to ED investigators, the accused lured people into investing money through a mobile-based platform operated by QFON App Limited.
Investors were promised unusually high returns ranging between two percent and 10.5 percent. The scheme claimed that the returns would come from activities such as viewing online advertisements and other digital tasks through the app.
However, the investigation found that the business model had no real revenue stream.
Instead, money collected from new investors was used to pay returns to earlier investors, a common feature of Ponzi schemes. Authorities also suspect that a significant portion of the funds was siphoned off by the accused.
The financial probe agency said the funds were routed through multiple bank accounts belonging to companies, firms and individuals linked to the accused.
Some money was also allegedly transferred through informal cash channels using Angadiya operators. So far, investigators estimate that proceeds of crime worth around Rs 183 crore were generated through the scheme.
Officials further said the two accused had been absconding during both the police investigation and the ED probe. Investigators later discovered that they had fled to Dubai in the United Arab Emirates and subsequently re-entered India through Nepal.
After sustained tracking and intelligence inputs, ED officials were able to locate and arrest the two men on March 11.
Earlier search operations conducted by the agency at several locations led to the recovery of documents, digital devices and financial records. Investigators also seized cash worth Rs 2.51 crore during the searches.
The ED said further investigation is underway to trace additional assets, identify other individuals involved in the scheme and determine the full extent of the financial trail.
