Bombay High Court holds accused a flight risk and integral to organised scam after investigation links nine parallel cyber fraud cases to his firm.

Navi Mumbai| Tuesday, October 28, 2025

The Bombay High Court has refused bail to a Navi Mumbai businessman accused of masterminding a multi-crore online trading scam, ruling that the case reflects an organised cyber fraud network designed to deceive investors under the guise of mock share-trading schemes.

The order, passed by Justice Amit Borkar, marks a significant legal development in Maharashtra’s fight against large-scale digital investment frauds. The court observed that the accused, whose firm allegedly acted as the central financial node in the scam, posed a serious flight risk and could influence witnesses or tamper with digital evidence if released.

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Case Background: A Growing Web of Deceit

The cyber-fraud case was first registered in May 2024 when a Vashi-based investor complained to the Navi Mumbai Cyber Cell that he had lost ₹76 lakh in a fraudulent trading group promising daily stock-market profits. The victim had joined a WhatsApp investment group called “CINV — The Premier Strategy Group” which claimed to operate under a fake SEBI registration number.

Initially convinced by fabricated returns displayed on the platform, the investor attempted to withdraw ₹1.76 crore — only to be told that he must first deposit ₹11 lakh as “income tax” before receiving his funds. When that payment vanished too, he realised he had been conned.

Subsequent forensic tracing revealed that over ₹82 lakh had been routed into multiple accounts linked to Shri Kanhaiya Ji Trading Company, owned by the accused. Several connected entities — including Vicky Traders, Krishna Fashion, and Shree Ji Enterprises — were later identified as shell companies used for laundering and cash withdrawals.

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Court’s Observations: Organised Cyber Scam India

In rejecting the bail plea, the Bombay High Court said the scam was “systematically organised and layered through multiple shell accounts,” pointing to a pattern of digital deceit across jurisdictions. The bench noted that the modus operandi—creating fake trading groups, luring investors, then demanding “tax payments” before disappearing—matched at least nine other cases registered nationwide.

“This case is not an isolated financial misadventure but an organised cyber fraud in India, designed to mislead investors through the illusion of legitimate trading,” the court observed.

Justice Borkar added that “the accused’s non-cooperation, failure to furnish genuine business records, and identical modus operandi across multiple FIRs” established sufficient grounds to deny bail.

The HC also dismissed the argument that tax payments legitimised the accused’s business. “Payment of tax on fraudulent proceeds does not legitimise crime,” the court clarified.

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Investigative Findings and Economic Offence Indicators

Officials in the Mumbai Economic Offences Wing (EOW) said the mock share-trading scheme was among the most sophisticated online frauds uncovered in the region. Unlike phishing scams that target individuals randomly, this operation carefully selected middle-class professionals and senior citizens active in online trading forums.

Funds were collected under the promise of “AI-assisted trading returns,” routed through shell accounts, and withdrawn in cash within hours — a pattern typical of laundering in organised cyber scams in India.

Investigators believe the fraud’s total scale may exceed ₹20 crore, involving hundreds of small investors across Maharashtra, Gujarat and Delhi. A senior officer noted:

“This is a textbook case of layered economic offences — multiple bank accounts, fake invoices, instant cash withdrawal, and investor deception under the guise of a regulated trading operation.”

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Flight Risk and Custodial Necessity

The court considered the accused’s conduct post-arrest: he ignored multiple summons, produced falsified ledgers, and gave contradictory statements regarding business turnover. Furthermore, one of the addresses linked to Shree Ji Enterprises turned out to belong to an unrelated real-estate firm — an apparent effort to misdirect investigators.

Given this evidence, the bench concluded that granting bail could compromise the investigation. The order stated:

“The gravity of the offence, coupled with the accused’s control over a network of shell entities, indicates the likelihood of tampering with digital evidence and influencing witnesses. Bail is, therefore, refused.”

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Investor Loss India: A Growing National Concern

The Navi Mumbai cyber fraud adds to a rising wave of investor losses in India due to online investment scams masquerading as legitimate financial platforms. In the past two years, cyber-crime units nationwide have reported a 400 percent surge in trading-app and investment-related fraud complaints.

According to RBI and SEBI data, these scams often involve high-pressure marketing through social-media groups, WhatsApp channels, and Telegram communities offering “guaranteed daily returns.” Victims typically transfer small amounts initially, receive fake “profits” to build trust, and are then trapped into transferring large sums that vanish overnight.

Experts warn that such multi-crore online trading scams exploit psychological trust and the public’s growing appetite for digital investment — blurring the line between legitimate and illicit financial activity.

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Implications for Law Enforcement and Regulation

Legal analysts view the High Court’s order as an important precedent for cyber-crime enforcement. The ruling reinforces the judiciary’s stance that digital investment fraud falls squarely under serious economic offences, deserving strict pre-trial detention.

Authorities are now working with the Enforcement Directorate (ED) and Financial Intelligence Unit (FIU-IND) to trace fund flows beyond India, as evidence suggests some transfers were routed through offshore accounts.

The case has also reignited calls for stronger verification norms for financial messaging groups, with cybersecurity experts urging collaboration between banks, regulators and telecom firms to identify suspicious financial activity faster.

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Mumbai Economic Offence Probe Continues

The Mumbai Economic Offence Wing is coordinating with police in Hyderabad and Bengaluru to investigate similar mock share-trading schemes linked through common digital fingerprints and payment gateways. Forensic audits of over a dozen accounts are underway.

Meanwhile, more victims have come forward alleging identical experiences — from being added to “exclusive investor groups” to being asked for additional “tax deposits” before withdrawals. Officials believe this pattern shows a well-structured organised cyber scam in India, possibly operating across multiple cities.

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