Morris Coin scam: At least 1.1 million investors may have been cheated

Earlier this week, the Enforcement Directorate conducted raids at 11 locations across the country regarding a fake cryptocurrency called Morris Coin that floated an “initial coin offering” similar to an initial public offering.

Though the investigating agencies peg the scam's size at Rs 1,265-crore, victims, pin stockists who were part of the Morris Coin team, lawyers who have been battling the case in courts for over two years, and police officials indicate that at least 1.1 million investors spread across Kerala, Tamil Nadu, and Karnataka might have lost over Rs 3,000 crore in the scheme.  

The companies that were raided include Bengaluru-based Long Rich Technologies, Longrich Global, and Morris Trading Solutions, among others. All the companies are run by Nishad K, the allegedly kingpin of the scam, who is currently abroad. “They started as a money-chain model and later transformed to Morris Coin. Actually, no one got this coin credited to their accounts. Out of the total Rs 1,265 crore scam, around Rs 1,000 crore was through L R Trading (multi-level marketing),” said PP Sadanandan, Assistant Commissioner of Police, Kannur, and an expert in financial fraud. Sadanandan and his team have so far arrested seven people.

The scamsters lured investors offering them handsome returns. On a minimum investment of Rs 15,000, they assured investors of a return of Rs 270 per day for 300 days. Investors were also offered 15 Morris Coins at the rate of Rs 1,000 each.

According to officials, some people who suffered heavy losses might not have come forward as they may have invested black money in the scheme. “I am appearing for around 400 clients who have complained against the illegal racket. Interestingly, complaints are coming majorly from the common man.

Those who have inv¬ested above Rs 40 lakh seem to be hesitant in approaching the law. The company advertise¬ments claimed a customer base of 11 lakh (1.1 million), in that case, the scam will be much bigger,” said Omar Salim, a lawyer with MBoss Legal Solutions. The money was collected from investors through pin stockists. This was later allegedly transferred to Nishad’s accounts in several South India-based major banks and also the corporate account of Long Rich. The promoters later siphoned off the money and invested in immovable properties in the three states and also allegedly in a film production company. “First they started it as an online education application called Study Mojo. We were all roped in to bring clients for the application. Later, we were also trapped in this fraud,” said a pin stockist, on the condition of anonymity.  

Suffering investors

For about 12 years, Joseph Munderi used to sell tea on trains in the Nilambur-Shoranur route, connecting Malappuram and Palakkad districts in Kerala. A few years ago, he met with an accident, which forced him to stop work, and to add to this his wife had to undergo dialysis once in two days. That is when he heard of Morris Coin, which promised handsome returns on a daily basis. “I took a loan of Rs 2 lakh from a local co-operative bank and invested it in Morris Coin. Now, I’ve lost everything,” Munderi said.  Ashique Mohammed, a driver from Malappuram, has a similar story. “I invested around Rs 5 lakh and got back around Rs 1.5 lakh till the authorities froze the company’s accounts.”

However, only a handful of people have approached the police so far. This is because investing in such schemes is a crime according to the Prize Chits and Money Circu¬lation Schemes (Banning) Act, 1978.

There are investors who still believe the company may give their money back. “I got my payouts through my bank accounts. How can it be illegal then? It is simply a multi-level marketing scheme,” said N K Manoharan, who claims to have got back the initial amo¬unt he invested in the scheme.