A major financial fraud involving so-called “Terabyte Space” investment schemes has been uncovered in Gujarat, leading to the arrest of Aravalli District Congress President Arun Patel along with another accused. Investigators said the network allegedly cheated investors of nearly ₹4.90 crore by luring them with promises of fixed monthly returns through a fake digital storage investment model.
How the ‘Terabyte Space’ scheme worked
The case is linked to an operation run from the WTC Complex in Ratanpur village under Dabhoda police station limits, where a company named Shoutspace Digital Private Limited reportedly promoted “Terabyte Space” as a structured investment product. Investors were allegedly assured that purchasing digital storage capacity would generate fixed rental income for up to 84 months.
According to investigators, the accused group used digital agreements, misleading advertisements, and fabricated profit projections to attract funds from unsuspecting investors. Authorities found that the company did not possess adequate server infrastructure to support the scale of data storage it was claiming to sell, raising serious concerns over the legitimacy of the entire business model.
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Arrests, entities under scrutiny and fund diversion
The investigation is being carried out by the Gandhinagar Police, which has formed a Special Investigation Team (SIT) to probe the wider financial network behind the scheme. Acting on initial findings, the SIT arrested two individuals identified as Arun Patel, a board director of Cloudji Digital Private Limited, and Sachin Patel, a zonal manager of Shoutspace Digital Private Limited.
Police officials said the accused misled investors by presenting the scheme as a regulated and secure investment option, promising regular income similar to dividends or interest payouts. However, after an initial period of payments, the returns abruptly stopped, leaving investors with significant financial losses.
A complainant in the case alleged that he and his family were persuaded to invest ₹32.75 lakh for 84 terabytes of digital storage capacity. Between February 2025 and March 2026, approximately ₹20.97 lakh was allegedly paid back as rental and commission, but payments later ceased completely.
Investigators also discovered that multiple related entities were involved in fund movement. A portion of the collected money was allegedly routed through companies such as Cloudji Digital Private Limited and Hari Hospitality and Leisure Limited, suggesting possible fund diversion and layering of transactions across entities.
So far, at least 12 investors have been identified, with reported losses totaling around ₹4.90 crore. However, officials believe the actual exposure could be significantly higher as more victims may come forward during the ongoing investigation.
Legal action and wider risk of ‘digital’ scams
The case has been registered under multiple provisions of the Bharatiya Nyaya Sanhita, 2023, along with the Gujarat Protection of Interest of Depositors Act and the Banning of Unregulated Deposit Schemes Act. Authorities are currently analyzing financial records, digital contracts, and banking transactions to trace the complete flow of funds.
Officials noted that such schemes often rely on modern terminology like cloud storage, digital assets, and tech-based investments to create a false sense of legitimacy. Experts have warned that unregulated digital investment models are increasingly being used to mislead investors, especially when backed by fabricated infrastructure claims.
The SIT is now investigating whether similar networks exist in other states and whether the same individuals are connected to other fraudulent platforms. Forensic analysis of digital evidence and financial trails is ongoing, and authorities have indicated that further arrests may follow as the probe expands.
