Wednesday, July 6, 2011

Masood May Have Parked Funds In Other Countries Too

City Limo head has Swiss a/c: ED

Masood May Have Parked Funds In Other Countries Too

C Unnikrishnan | TNN

Mumbai: S M Masood, chairman of City Group that duped almost one lakh investors by promising 48% returns on their investments, has stashed away funds in a Swiss bank, an enforcement directorate official said on Wednesday. The department is also investigating other accounts of his in some other countries.

Two City Group firms — City Limouzine and City Realcom — had promised lucrative returns on investments through various schemes. In 2002, the group issued advertisements of the schemes in newspapers. In September 2007, the first complaint was registered against the company after it defaulted on returns. Soon, cheques issued to several other investors too
bounced, causing panic.


ED and economic offences wing of the city police are investigating the comp l a i n t s
against the company. While ED is investigating the company for money laundering under the Prevention of Money Laundering Act (PMLA), the economic offences wing (EOW) is investigating the cheating aspect. An ED official said, “Investigations are on to find out the amount he has taken out of the country illegally. We believe it will add up to a few crores.”

City Limouzine offered 48% returns on investments for five years as well as a car at the end of the term. The company said cars would be purchased from the money collected from investors and profits earned by giving it on hire through a trust.
Realcom’s scheme was also on similar lines. On an investment of Rs 1.39 lakh, the company offered Rs 7,775 for five years and Rs 50,000 at the end of it.
Complaints of default were registered across the
country. Masood was arrested in late 2009 and is still in jail. The police had arrested four other senior officials in early 2010 and the courts released them on bail.

ED has attached around 30 properties valued at more than Rs 100 crore and another Rs 64 crore cash under PMLA.

The Act allows the agency to seize properties purchased using tainted money. “It is called ‘proceeds of crime’ under the Act. The government will take over the properties and then it’s for the courts to decide on auctioning it and distribute the money received to investors,” an ED official said.


ED officials said PMLA will act as an effective deterrent against such fly-bynight companies. An official said they would gather details of such other cases from the police and initiate action under PMLA. Investors said they hope that the court would allow the proceeds to be distributed among them.

Court pulls up cops for failing to arrest 4 accused in scam

Rosy Sequeira | TNN

Mumbai: The heat was turned on against the Mumbai police after the Bombay High Court on Wednesday ticked it off for failing to arrest four accused in the City Limouzine scam, saying they are untraceable.

A division bench of Justice Ranjana Desai and Justice R V More was hearing a clutch of petitions filed by investors who were allegedly cheated and who expressed their unhappiness with the police’s explanation for not apprehending the accused. Cheques issued by the company towards returns on investments bounced since August 2009 affecting thousands of investors across the country. “We refuse to believe you cannot arrest them. If Bombay police wants to arrest someone, it can,’’ said Justice Desai. The judges said the city police is considered the most competent police force in the country. “If you want, you can do it in one day,’’ added Justice Desai.

An affidavit was submitted to the court in which it was pointed out that of the
13 accused, one Masood Jamdar is in jail, four are untraceable, the statements of four others have been recorded and they have been made witnesses in the case while the remaining four were arrested and released on bail last year. “We are unhappy with your affidavit. Why have you not moved the lower courts for cancellation of their bail?” asked Justice Desai. “The matter involves hard-earned money of investors. Life savings have gone. The police must show urgency, sympathy and take quick steps.’’ Advocate Mubin Solkar, appearing for investors, told the court, “It is difficult to digest that the accused cannot be arrested.” He said the police can always attach their properties and issue proclamation.

The judges said the police can resort to taking various legal steps in bring the accused around. “You can build pressure on these accused. In the interest of thousands of people, do some good,” she added. The judges directed the police to state at the next hearing what efforts have been taken by them to trace the four absconding accused. The court has also directed that the record be placed before the court.

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