Several Ponzi schemes have been playing with the lives of people in Andhra Pradesh. Andhra Pradesh Crime Investigation Department (AP CID) has registered cases against several such bogus enterprises. The AP CID police recovered 27crores from VR Chits scam and the Chief Minister Chandrababu Naidu handed over the cheques to the 2200 victims today at Amaravati secretariat. This is one of the first cases where the government managed to recover full money from fraud chit fund companies.
Accused
The scam was committed by Vommi Rama Chandra Rao, of Kancharapalem of Visakhapatnam City along with 7 others including V.Madhusudhana Rao, V.Krishna Rao, V. Ramnarayan, V. Srinivas Rao and B.V.Ramesh Chandra. The A1 accused Ramchandra Rao died in 2002, so the case against him stands abated.
Chit Fund Scam
The accused registered V. R. Chits and Investments Private Limited, V. R. Educational Society in 2000 and V. R. Medicinal and Aromatical Plantations Limited in 2002. They offered excessive rate of interest on deposits to attract public and organized the chits for Rs. 25,000 and Rs. 50,000 groups. The accused paid interest regularly to gain the trust of Public who started depositing lakhs of rupees. By February 2005, they collected deposits worth 27.31crore rupees which was invested in Real Estate business and acquired immovable and movable properties in Visakhapatnam, Vizianagaram, East Godavari and Chittoor Districts. In November2004 the accused defaulted in payment of interest amount as well as the principal amount, the victims filed complaint with Vishakhapatnam police.
The Case
It is one of the biggest frauds, among Chit Fund cases investigated by AP CID. As per CID records, total 3303 Depositors in AP were duped for Rs. 33 crores. Five cases were registered for the alleged offences punishable under Sec.5 of Protection of Depositors Act and Sec.56 of Chit Funds Act and under Sections 406, 420 and 120-B of the Indian Penal Code.
Government Orders were issued attaching the properties of VR companies. In two phases, 2006 and 2011, the properties were attached. More than Rs. 27 Crore amount was realized in the auctions. A judge under special court was assigned to recognize the eligible depositors. CID took steps to disburse the realized amounts to the victims by following the due process of law.
