Solar Techno Alliance Crypto Scam: The Promise Of A Ponzi Scheme In Odisha
According to Odisha Police. This group is not registered in India or abroad.
STA allegedly defrauded more than 200,000 "investors", many of them from Badrak. In India, ringleader Gurtej Singh Sidhu (40) was arrested by the Economic Offenses Wing (EOW), Odisha, following a nationwide manhunt by the state police's Criminal Investigation Department (CID).
Odisha group chairman Nirod Kumar Das and STA promoter Ratnakar Palai on YouTube were arrested. A circular was issued to three top or senior management members, but one migrated to Dubai.
Opposite Laha, 27-year-old Ramachandra Nayak, who lives in Tidhi village, 30 km away in the same district, and who has not gone through the pressures of middle age, is content with the income he earns from his father's iron factory. He then meets an STA member who has seemingly become rich overnight. Nayak cannot resist the temptation to follow the new social status he knows.
He invested ₹ 5,000 in STA and then took a personal loan from a bank to invest ₹ 1 crore more. Within three months, Nayak received a notice from the bank that he had not paid the due monthly installments (EMI) on time.
The group's website , Solartechnoalliance.com, describes the STA token as a "decentralized multi-service token for any decentralized crypto payment gateway for industrial services," despite pending registration. , without providing further details. Founders or key stakeholders are not named; There are many grammatical and spelling errors and misrepresentations regarding over $1 trillion in sales.
For Laha and Nayak, who had no training in sophisticated technical procedures and were trained in Odia, the warning signs were subtle. The MMM aspect of the plan is also not detailed on the website. All promotions are by word of mouth, weekly meetings at Badrak and elsewhere. Investors who add more people to the network will get "winners" iPhones and two-wheelers, EOW said.
“I lost only Rs 10,000 in STA,” said Laha. But thousands of people, especially small traders, invested hundreds of rupees. One of Nayak's friends, a migrant worker in Thidi, returned from Surat where he worked in a cotton mill during the Covid-19 outbreak. Like him, Nayak took a bank loan of Rs 100,000 to try his luck at STA.
The year is 2021. People who have lost their jobs and returned to their villages are looking for money and stability, and STA seems to be a respite from the dark times.
STA India Chairman, Gurtej Singh Sidhu (left) with Hungarian David Gehs, Group CEO, at a private event. | Photo: Custom setup
Take money
In July this year, EOW received information about cryptocurrencies linked to Das, a Badrak trader. Badrak and Balasore districts have become centers of microfinance schemes leading to the loss of many people facing financial difficulties. This symbol is thought to have served as a front for the pyramid scheme. Deputy Commissioner of Police EO Samita Sahu and inspector visited Badrak posing as potential investors and met the accused.
This "NGO worker" explained that individuals should download the STA Trust Wallet app (no longer available on Google Play). After verifying their credentials, the app will create an account in their name. A minimum investment of 3,000 Birr is required at the start.
EOW's initial investigation found that "investors" were under the impression that STA's business was booming due to the active monitoring of top management, where they held regular pitching meetings. From time to time, STA India chief Sidhu and 33-year-old Hungarian CEO David Gehs attend these meetings to boost investor confidence.
Investors were promised daily returns of 3-5% on their deposits, which had a lock-in period of 20 months. The main objective, according to Sahu, is to generate new investments through referral links that generate income through referral bonuses. "Ponzi schemes operate like a pyramid structure, with early entrants pocketing their profits at the expense of new entrants, ultimately leading to collapse as the token's value declines."
The EOW registered preliminary findings on July 28 and named Gez, Sidhu and Das in the FIR with reference to the Odisha Protection of Interests of Depositors (Financial Institutions) Amendment Act, 2016.
STA India Chairman Gurtej Singh Sidhu with actor Govinda at a private team event. | Photo: Custom setup
Count and fight
The STA meeting held at a hotel in Goa on July 31, attended by actor Govinda and hundreds of linemen, EO. The purpose of the meeting was to introduce the blockchain system of the group, which will start its own cryptocurrency and move away from tokens.
Cryptocurrency transactions occur in two ways: An organization can trade coins from a computer network that has its own blockchain system. When an entity relies on another person's system, it is called a token. Tokens are relatively easy to create and can be listed for trading on exchanges. Tokens are often considered the predecessors of coins.
However, according to the EOW, the value of STA tokens will begin to decline. Investors started withdrawing their money and panicked in various WhatsApp groups set up by STA members. In this group he advises to avoid fear. At that time, EOW joined many WhatsApp groups.
Recognizing the importance of the July 31 event, the EOW team traveled to Goa as an opportunity to recognize the senior leadership of the STA. It is understood that a portion of the R1.5 million donation from the cast at the event, including a luxury hotel stay and a boat party, went to star Govinda.
As the EOW team waited outside the incident site, Sidhu sensed his presence. He fled to Mumbai, then flew to New Delhi, traveled overland to Punjab and finally reached Sri Ganganagar in Rajasthan, which borders Punjab. The EOW traced him and found the hotel where he was staying. Sidhu was arrested on August 4 at 11:45 am with the support of two EOW members and the Rajasthan Police. He was produced in the Cuttack court on August 6. Das was arrested the same day and it was learned that Rs 30 crore was transferred to his bank account.
People approached the Economic Offenses Wing office and the Special Task Force office in Bhubaneswar to register their complaints. | Photo: Biswaranjan Rout
Contact search
EOO said that he first contacted Sidhu Geh through Facebook. They came from Amsterdam with other people to start the project. “We got interesting information from Sidhu's mobile phone. "He kept the phone numbers of line members terminated by MML," said Sahu.
During the investigation, the EOW found that Sidhu came from a farmer's family and had not passed class four. His relationship with his parents was strained and he took odd jobs, including repairing tires and pipes, in Faridkot, Punjab, where he grew up. To improve his financial prospects, Sidhu joined Amway, a network marketing company that once sold everything from nutritional supplements to frying pans.
His family including his wife, daughter (19) and son (12) live a prosperous life in Punjab with STA income. The company created a table of income based on the hierarchy in the network. A Pearl member earns a guaranteed income of $1.50 per day, while a Kohinor member's daily compensation ranges from $2,500 to $3,000. According to police, the remaining stones included ruby, emerald, topaz, diamond, pink diamond, blue diamond and hoop diamond.
Sidhu was the only Kohinoor member present. She was photographed arriving at the meeting in an open car as people showered her with flowers. He paid money to Gzi who worked as a waiter in a hotel. Investigators believe Geez's foreign history helped boost the confidence of potential investors.
During the launch of STA, Sidhu used bulk messaging service to send messages, EOW found. Those who respond become senior leaders in the group and play roles at the top of the pyramid structure. They are responsible for expanding the network.
Sarbjeet Kumar, who runs a photography and video business in Sararijan in Bihar's Samastipur district. | Photo: Custom setup
not at all
After Sidhu's arrest, the victims started approaching the EOW and demanded their money back. Sarabjeet Kumar, who runs a wedding photography and video business in Bihar's Samastipur district, said he invested $20,000 in STA in March this year. Gentlemen asked me to invest more to increase my income. I took a loan of 2.2 lakh in my wife's name and deposited 1.2 lakh in the scheme and spent the rest for family expenses.
Kumar's cousin, who runs an agricultural produce shop in Sararianjan area, invested Rs 9 million. Investigators also found that a retired teacher in Bhadrak district had invested his entire savings in the scheme.
EOW investigators initially estimated around 10,000 victims in Odisha, but the number has now risen to 21,000. Badrak and Balasore districts are the worst affected areas. STA victims are spread across several states, with Bihar, Rajasthan, West Bengal and Punjab having several investors. According to the investigators, members of the group are located in Hungary, Saudi Arabia and Nepal.
Although it seems far to get their money back, the victims hope to get justice. "This company, which has no significant business, continues to recruit new members and collect deposits. This alone can be a sufficient basis for the imposition of penalties under the Price and Money Laundering Schemes (Prohibition) Act, 1978 ,” said a senior IPS officer of Odisha cadre heading the EO. Officer Jai Narayan Pankaj said.
The police are prosecuting to ensure stricter punishment under section 420 (cheating) of the Indian Penal Code and the Information Technology (Amendment) Act, 2008.
"Most of the funds raised are in the form of STA tokens. We contacted the crypto trading platform Binance, which is said to have 21 Crore STA crypto tokens. Unfortunately, they did not respond to our queries," Pankaj said and added that they are looking for alternative channels. They were not kept in personal accounts. A Mule account can be used instead. Almost all accounts are used by cyber fraud and personal accounts are deleted,” the EO said.
Fake funds are often moved from one shell account to another and deposited into the shell company's account. These shell companies work with crypto traders to convert funds into cryptocurrency. Once a cryptocurrency is transferred to a Chinese or other foreign court, it is almost impossible to get the money back. Another method of channeling fake funds involves paying high prices for goods through fictitious exports and imports.
"We have informed the relevant authorities, including the Enforcement Directorate of India and the Reserve Bank, about these shell companies," Pankaj said. Meanwhile, the EOW team is all set to question actor Govinda to understand the nature of the support. They also hope to warn celebrities to do their due diligence before promoting shows online.
Warning: If you suspect cyber fraud, call 1930 24/7.
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