New Delhi: An Ayurveda doctor from Andhra Pradesh, who was previously arrested and later released on bail in the ₹5.85 crore Gurugram digital arrest cyber fraud case, has been arrested again in connection with an alleged ₹30 crore Ponzi investment scam. Police allege that Kitcha Veerbhadra Rao defrauded around 270 investors, many of whom are still awaiting the return of their investments.
According to investigation records, Andhra Pradesh Police arrested Rao from Kadapa on July 15 following fresh complaints in the Ponzi scheme case. This marks his second arrest in the same investigation after he was first taken into custody from Nagole, Hyderabad, on April 1. He was subsequently released after completing the statutory custody period without a chargesheet being filed, but was re-arrested after additional complaints were lodged by investors.
Investigators allege that Rao operated an investment scheme promising monthly returns ranging from 10% to 16% while allegedly displaying a fake Securities and Exchange Board of India (SEBI) certificate to convince investors that the scheme was legitimate. Police estimate that more than ₹30 crore was collected from nearly 270 families, with approximately half of the amount having been returned, while victims continue to claim outstanding dues of ₹15–20 crore.
Several investors have alleged substantial financial losses. Hyderabad-based IT consultant J. Paul claimed he invested ₹2.14 crore, of which ₹1.75 crore remains unpaid. Another investor, business consultant R. Kolli, alleged that he lost ₹1.2 crore and said investors repeatedly demanded that Rao disclose the money trail linked to the bank accounts used in the scheme.
The Ponzi investigation has also revived scrutiny of Rao’s alleged role in the ₹5.85 crore Gurugram digital arrest scam, in which cybercriminals allegedly diverted stolen funds through multiple layers of bank accounts before converting part of the money into cryptocurrency.
According to investigators, two bank accounts allegedly opened by Rao formed part of a network of 11 mule accounts maintained at a cooperative bank in Hyderabad. The Indian Cyber Crime Coordination Centre (I4C) reportedly identified 181 cybercrime complaints linked to these accounts, through which approximately ₹21 crore was routed within just three months. Data further indicated that the two accounts allegedly opened by Rao were connected to 30 cyber fraud complaints.
Police also allege that Rao and his associates offered high commissions to intermediaries and agents for bringing new investors into the scheme, enabling the network to expand rapidly. Many of the alleged victims reportedly belonged to middle-income and economically weaker families who invested borrowed money or funds raised through loans and chit funds in the hope of earning secure returns.
The Gurugram Special Investigation Team (SIT) is also investigating allegations that money withdrawn from the mule accounts was converted into cryptocurrency. In a related development, another accused, allegedly involved in converting the proceeds into digital assets, was arrested recently, and investigators reportedly recovered a mobile phone containing details of cryptocurrency holdings worth around ₹40 lakh.
According to the Future Crime Research Foundation, Ponzi schemes increasingly exploit fake regulatory approvals, forged certificates, unrealistic return promises and extensive referral networks to attract investors. Renowned cybercrime expert and former IPS officer Prof. Triveni Singh said fraudsters often combine financial deception with cyber-enabled money laundering techniques, including mule accounts and cryptocurrency, making asset recovery significantly more difficult. He advised investors to independently verify regulatory registrations, investment licences and promised returns before committing funds.
Authorities have urged the public to avoid investment schemes offering unusually high guaranteed returns and to immediately report suspicious financial activities to law enforcement agencies so that fraudulent transactions can be traced and frozen at the earliest opportunity.
