Torres Ponzi scam: Cops were aware of fraud but dragged their feet

MUMBAI: The Torres Jewellery fraud has taken an unexpected turn, with the Economic Offences Wing (EOW) of the Mumbai police learning that the Shivaji Park police and Navi Mumbai police had suspected something was terribly amiss but didn’t take appropriate action, months before the scam surfaced. As a result, an estimated 1.25 lakh small investors were scammed of hundreds of crores of rupees since February 2024.

Police had issued notices to Torres’s stores, seeking information about their business model but didn’t pursue the investigation. The scam, involving fraudulent investment schemes, surfaced on January 6, when Torres shut its stores in and around Mumbai. Three senior executives of Torres’s holding company, Platinum Hern Private Limited, have been arrested, while several others are at large. Among those arrested, one is an Uzbek national and another is Russian.

EOW officials investigating the case said the Shivaji Park police had written to Torres Jewellers in June 2024, asking them to explain their business model, while the Navi Mumbai police had sought similar information from the Sanpada store, in October last year.

And it wasn’t just the police. In November last year, the Income Tax department had issued a summons to Platinum Hern Private Limited, under Section 131(1A) of the Income Tax Act. This section empowers assessing officers to issue notices seeking information from taxpayers, even when no formal proceedings are pending. “The IT department had sought information on Torres’s business model and their source of income,” said a police officer with the EOW.

Caught on the wrong foot, Vinay Mane, a police sub-inspector with the Shivaji Park police in whose name the application had been sent to Torres, admitted to writing the application on the instructions of his seniors. However, he claimed, “My office is in another area. I was just asked to write the letter and it was delivered to Torres. I am not aware of what happened after that,” Mane told the media on Thursday.

The Navi Mumbai police had a more elaborate explanation. They claimed they had received a tip-off about the fraud, which is why they had written to Torres, seeking information. Then they apparently used a customer as a decoy to invest a scheme at the Sanpada store. Police claimed the ‘customer’ had even started receiving weekly instalments, just as Torres had promised. Before they could raid the store, the fraud surfaced, police claimed.

Meanwhile, the case has taken a further twist. The Shivaji Park police said that Sarvesh Surve, the arrested alleged director of Platinum Hern, its CEO Tausif Reyaz, who is at large, and external auditor Abhishek Gupta, who has been questioned, claimed they had emailed the police in the last week of December, to alert them to the fraud. “The three Indian nationals claim they had found that the Ukrainian national, Viktoriia Kovalenko, and other foreign nations had planned to flee the country. So, to save themselves, they claim they alerted the agencies when the fraud operation wound up. Gupta has told us about the police letters received by them,” said the police officer.

Police said Ukrainian nationals played key roles and used Indian nationals for their documents and as a front for the company. Surve claimed he was an Aadhar operator and was paid ?25,000 per month to pose as a director in the company.

Meanwhile, the EOW on Thursday searched seven locations, including Torres’s stores at Dadar and Grant Road, three residences of the accused, and their head office in Opera House.

“We have seized around ?2.5 crore and are in the process of counting more cash that we have seized. We have also seized some bank accounts and will get information about the cash in those accounts soon,” said an EOW officer.

DCP Sangramsinh Nishandar, with the EOW, said, “We have 15 police officers working on the case. We are interrogating the accused and are on the lookout for the absconding accused. Look-out circulars have been issued for Viktoriia Kovalenko and Tausif Reyaz.”

For the third consecutive day, defrauded investors gathered outside the Torres Jewellery store in Dadar and queued up at the Shivaji Park police station to submit applications, which will be sent to the Economic Offences Wing.