The National Cyber Crime Investigation Agency (NCCIA), in a joint raid along with intelligence and law enforcement agencies, arrested several foreign nationals allegedly running a fraudulent Ponzi scheme network in Karachi’s Defence Housing Authority (DHA) area on Thursday, a statement from the agency said.
A Ponzi scheme is a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
Per the statement, the operation was conducted in DHA Phase 1 and Phase 6, where several foreign nationals were taken into custody during the action.
“Important and sensitive data was recovered from the suspects, which is now being examined as part of the investigation,” the statement said.
Preliminary inquiries suggest the detained individuals were allegedly running a “well-organised network through a Ponzi scheme,” the statement said, adding that the fraud had affected thousands of people, causing them “serious financial losses”.
However, the further details about the extent of the crime and the people involved were not confirmed.
Authorities said further legal action will be initiated against the network, while investigations are ongoing to determine the full scope of the operation and identify additional suspects.
In July, the NCCIA had also captured a Ponzi ring by raiding a factory in Faisalabad, arresting 149 suspects, including 48 Chinese nationals.
In Feb, the National Accountability Bureau (NAB) Lahore had launched a crackdown against several entities for their involvement in financial scandals, drawing thousands of people to invest in fraudulent schemes.
The term ‘Ponzi’ scheme came from Charles Ponzi, who in the 1920s promised high returns through a fake investment system involving international postal vouchers. Instead of making legitimate investments, he paid returns to earlier investors with the money from new ones. This fraudulent model continues to thrive online today.
