Belagavi (Karnataka) [India], June 7 (ANI): The Crime Investigation Department (CID) has officially unmasked a massive financial fraud orchestrated by Shivananda Neelannavar, revealing a sophisticated Ponzi scheme that has left thousands of investors in financial distress.

CID Deputy Inspector General (DIG) of Police Bhimashankar Guled held a press conference on Saturday, detailing the scale of the deception and the ongoing recovery efforts.

'It has been proven that Shivananda Neelannavar has committed fraud. He was running a Ponzi scheme, using money from new investors to pay interest to earlier investors. He continued this until the interest payouts exceeded the fresh collections,' Guled said.

Neelannavar has collected Rs 2,400 crore from the public so far. A significant portion has been returned to investors. However, Rs 540 crore was invested in the stock market, of which Rs 170 crore has been lost. The probe has revealed a shortfall of Rs 660 crore. Of this, Rs 330 crore is expected to be recovered, Guled added. It has been found that 40,700 people have invested in the scheme.

Neelannavar had another associate involved in the operation. He illegally transferred Rs 55 crore from the company to his personal accounts. Five luxury cars have already been seized. He also purchased 11 cars, which will be seized soon. An additional Rs 400 crore has gone to investors so far.

'We will recover that money and distribute it to the remaining investors,' Guled said.

'After the FIR was registered, Rs 4 to 5 crore was still deposited. We have found 30 bank accounts, of which 7 accounts received most of the money. One single account has 36,200 pages of transactions, and the investigation is ongoing,' he stated.

On whether money was routed to movie stars through the associate, Guled said, 'We will issue notices to them and summon them for questioning.'

The highest investment has come from neighbouring Maharashtra.

'We are investigating with the cooperation of Maharashtra police,' he added.

After recovery, the case has been handed over to Aditya Amlan Biswas, Head of the Banning of Unregulated Deposit Schemes (BUDS) Act authority.

'He will oversee the process of returning the money to the public,' Guled said.

The district administration had raided the company and initiated legal action before it collapsed, he noted. (ANI)