Digital Wallet Scam May Cross ₹2,000 Crore as Probe Expands

A digital wallet scam initially pegged at ₹635 crore has widened to 15,00,770 alleged victims across six Indian states.

How did the alleged scam operate?

Investigators say the SD Pay scheme was presented as a digital wallet application and operated through a multi-level marketing model. Users were allegedly attracted with promises of 9% monthly cashback on wallet balances.

According to the investigation, the network functioned through a 15-tier referral system in which existing investors brought new members into the scheme. Police allege that the masterminds later froze withdrawals and diverted funds into shell corporate accounts.

What Gujarat Police initially believed was a ₹635-crore fraud involving around 3.15 lakh victims has expanded sharply after investigators allegedly cracked the password of a system used by the accused and accessed crucial data. The number of suspected victims has now reached 15,00,770, while investigators believe the amount involved could exceed ₹2,000 crore.

Police have so far recorded statements from 350 victims, according to Amreli SP Sanjay Kharat.

Where has the investigation spread?

The investigation, initially focused on Gujarat, Rajasthan and Maharashtra, has now been linked to Karnataka, Bihar and Uttar Pradesh as well. Police are examining the network’s operations, financial transactions and associates across all six states to establish the full extent of the alleged fraud.

The Enforcement Directorate is also likely to formally join the investigation, according to the information available. Police said key accused Dhaval Patel and Narendra Solanki shifted their operations to Maharashtra under the name Apna Pay. Nine accused, including Patel and Solanki, have been arrested so far. Solanki is described as a former employee of a UPI-based company.

Who are police still looking for?

Investigators allege that operations were subsequently handed over to Narendra Kangre, who has been named as an accused and is absconding. A Look Out Circular has been issued against him and he has been placed on the no-fly list.

Police are examining Kangre’s role and whereabouts as part of the wider inquiry. They are also investigating the role of Apna Pay in Maharashtra and how the network managed to recruit such a large number of people.

Investigators are further looking into the alleged exploitation of banking and digital-payment loopholes connected with the operation.

What information have investigators sought?

Amreli Police have approached the Google Play Store, the Reserve Bank of India and banking institutions for information about the mechanism allegedly used by the accused and the loopholes they may have exploited.

Kharat said the accused had a registered company but did not possess a banking licence. They subsequently launched an IMPS application with assistance from a Delhi-based company, an aspect that is also being examined.

Kharat said the accused capitalised on the lure of easy money and appealed to people not to fall for such schemes.

The investigation is now focused on tracing the financial trail, understanding how the network expanded across states, examining the roles of its alleged operators and determining the mechanism through which such a large number of people were recruited.