A SEBI-registered name was weaponised to cloak a nationwide investment fraud that duped the public with promises of high returns. With ₹266 crore identified as Proceeds of Crime, luxury properties—including a Dubai address—frozen, and arrests made, the Enforcement Directorate is uncovering the layers of deception surrounding LFS Broking Pvt Ltd and its shadow operation.
A Familiar Name, A Shadow Entity: The LFS Mirage
At the centre of the Enforcement Directorate’s sweeping crackdown is a curious duplicity: LFS Broking Pvt Ltd, once a legitimate, SEBI-registered share broking and investment entity, and its shadow twin—LFS Broking and PMS Services, an unregistered imposter operating under the cover of regulatory legitimacy.
For hundreds of unsuspecting investors across India, the name LFS evoked trust. What they didn’t know: their money, presumed safe in the coffers of a licensed firm, was instead being funneled through a parallel outfit not listed with market regulators. This shadow company used phony financial seminars, targeted online ads, and viral social media campaigns to orchestrate a massive mobilisation of public investments, promising sky-high returns with minimal risk.
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The main accused, Saiyad Jiyajur Rahaman, allegedly orchestrated this parallel operation while still helming the registered entity. He is currently lodged in judicial custody in Bhubaneswar, Odisha.
The Trail of Crores: From Small Towns to Dubai
The ED’s investigation, conducted under the Prevention of Money Laundering Act (PMLA), 2002, has traced approximately ₹266 crore in suspected Proceeds of Crime—a number that officials expect will rise substantially.
In coordinated search operations, authorities froze 118 bank accounts and issued prohibition orders on 63 immovable properties. These include:
- Two hotels and a luxury resort
- Multiple land parcels and apartments
- A high-end bungalow in India
- And most notably, a premium real estate holding in Eagle Heights, Dubai
The market valuation of these assets is under assessment, but preliminary estimates indicate a web of wealth intricately constructed using laundered investor funds.
Arrests, Revocations, and the Legal Reckoning Ahead
In recent developments, the ED has arrested Dilip Kumar Maity and Md Anarul Islam, allegedly key operatives in the fraud network. Both were produced before the Special Court (PMLA) in Kolkata and have been remanded to ED custody for 11 days of interrogation.
The probe reveals that after collecting funds under the guise of SEBI affiliation, the accused rerouted these funds into various shell entities, obscuring the origin and making eventual recovery difficult. The deception ran deep: falsified performance data, phony brokerage statements, and misused SEBI credentials were all part of the con.
Amid mounting complaints and FIRs across several states, SEBI revoked LFS Broking Pvt Ltd’s registration in 2024, sealing the fate of a company that had, at one point, presented itself as a rising star in retail investment circles.
As the ED digs deeper, more arrests, asset seizures, and potentially, charges against new players are likely.