Two influencers accused of a million dollar fraud continue to inspire people on Instagram

There are two companies at play here. The first one is TP Global FX, a broker regulated in Vanuatu (a small island in the South Pacific), according to its website. Another player is the Mumbai-based IX Academy Private Limited, and the US-based company IX Global LLC.  TP Global FX was not authorised to deal in foreign exchange in India.

On the other hand, the IX Academy, which called itself an investor education platform, suggested usage of TP Global FX for automated trading. The presentations provided by victims also show that the company had offered a detailed process of joining in TP Global FX.  This resulted in a mass of investors, with little knowledge about investing, joining the unauthorised broker.

On this unlicensed forex trading platform, the perpetrators were guaranteed returns. An instagram influencer, with 285,000 followers (and a seemingly flamboyant lifestyle to boot) added to the allure. It was a ponzi scheme with a twist. A multi-level marketing scheme that also paid existing investors to draw in more people.

The number of people who lost their money – and the amount of money they’ve lost – is still unclear. For now, 70 complainants (who claim to have lost a total of around Rs 10 crore), hailing from Maharashtra  and Gujarat have approached the Economic Offences Wing (EOW) of the Mumbai Police via an email complaint. An email sent to the Joint Commissioner of Police of EOW Mumbai regarding the update didn’t elicit any response.

The Enforcement Directorate (ED) has attached bank accounts with Rs 121 crore in deposits and another Rs 118 crore worth of other assets like shares, mutual funds, bonds, luxury vehicles, flats, commercial spaces, and hotels, which belong to the accused.

According to the ED, the money collected from the investors were moved to other companies and entities which were related to the perpetrators, without the knowledge of the “gullible investors”.

The ED probe began in April 2023. This was nearly seven months after the Reserve Bank of India (RBI) declared TP Global FX illegal and warned people against the broker operating in India without the regulator’s authorisation. As of September 2023, multiple agencies including the Kolkata Police are investigating the case.

Sandeep, a 40-year-old salesperson in an automobile showroom —  and one of the 17 victims we spoke to — bought into the scheme after he saw his manager at work make handsome returns on his investments, which he made through TP Global FX.

Sandeep’s manager, who approached him in December 2021, said that he could expect anywhere between 5-15 percent returns, every month. While his manager was not employed by TP Global FX, he had a financial incentive for roping his colleague into the pyramid.

At the very least, one could get a “sponsor bonus” of $15 (Rs 1,247) per new individual. People were motivated to add more and more investors as it would waive off their monthly subscription fee of at least $125 (Rs 10,392). There were bigger benefits for roping in more investors in any given month.

Sandeep put in Rs 6 lakh in December 2021 on his managers’ advice. “I was getting around 8-20 percent returns on my investment till May 2022,” he said. After that he reinvested his returns in the scheme until August 2022 when the return and withdrawals completely stopped.

Companies in India need a banking licence from the RBI to accept deposits. To deal in foreign exchange, or to offer a trading platform, they need to be registered with the regulator, according to two lawyers the authors spoke to.

“Collecting deposits from people on a promise of returns is unlawful in India,” said Ashutosh Shrivastava, a practicing lawyer at the Supreme Court of India, who represents clients in cases involving financial frauds.

“Many companies tweak the language in order to collect deposits. So deposits will be renamed as advance or subscription or some other name, so that they don’t fall under the purview of law and companies can continue accepting deposits,” another lawyer, on the condition of anonymity said.

How did a broker, TP Global FX regulated in Vanuatu, a nation with 80 islands convince Indian citizens to part with their money? Here, the power of the “influencer” came in.

One of the accused named in the Kolkata Police chargesheet is Viraj Patil, ex-director of IX Academy Private Limited and a distributor for IX Global LLC.  He is fairly popular with over 285,000 followers on Instagram and over 3,900 subscribers on YouTube respectively, as of September 30. He speaks about network marketing and growing long-term wealth in his videos to great applause and generous comments.

“I was amazed with the kind of life Viraj Patil had. Vacations, travel, cars and so I thought of entering the platform,” said another victim.

Many victims told us that they had attended zoom meetings where Patil would make them familiar with the process of investing and talk about the benefits of automated trading via TP Global FX. A man going by the name Viraj Patil can be heard on some of the zoom meeting recordings, seen by the reporters, but the speaker’s face was not visible.

IX Academy Private Limited’s registered office, mentioned in the Ministry of Corporate Affairs records, is part of a co-working space in Andheri, a Mumbai suburb. However, no one from Patil’s team has been seen in the office for about a year, according to one of the people who works for the leasing company.

The rent agreement lapsed four months ago but there were no unpaid dues from the company, according to the source who believes Patil is now in Dubai. We couldn’t independently confirm his current location but his LinkedIn profile says that he’s in Dubai.

While Patil didn’t respond to our outreach, we did get a response from his colleague Joseph Martinez, whose face and quotes featured prominently in the IX Global presentations made to investors.

Martinez denied any link with TP Global FX in an email response. “Any news, video, statement, article, presentation published or presented by you on any platform is at your own cost, risk and peril,” he added.

However, Patil can be clearly seen endorsing TP Global FX to the audience in Forex Expo 2021 and representing himself as a part of the company in a YouTube video.

The connection between the two companies is also evident in the presentation shared with the investors. The slides, which carry the IX Global logo, clearly tell users how to login to TP Global FX’s application.

“Direct selling entities cannot participate in a Pyramid Scheme, a multi-layered network of subscribers formed by subscribers enrolling more subscribers to receive benefits directly or indirectly due to the enrolment or actions of additional subscribers to the scheme,” Pranjal R Daniel, chief strategist at Strategy India - a consulting agency for direct selling-MLM businesses said. He further said that any subscription, including auto-ship or auto order, is not allowed in a direct selling company.

Interestingly, the first press release issued by the ED in March 2023 did not name Viraj Patil or IX Global LLC. However, about six months after the investigation began, new names, including that of Patil and Martinez, were added to the fresh chargesheet filed by the Kolkata Police. His name also features in the CBI special court order dated September 1, 2023.

Fresh names in the Kolkata Police chargesheet dated January 1, 2023 were charged under 120B, 420, 467, 471 of IPC.

Some victims did not withdraw their money even after the RBI warning in September 2022. Those who tried to withdraw the money from the platform, got this message.

Patil continues to post content that’s supposed to inspire people, and pull them out of procrastination, and still gets thousands of likes and hundreds of comments.

“I know I am going to be a billionaire in the next 24-36 months,” said Martinez in a video, where he is seen addressing an audience, posted on September 29, 2023. He’s one of the defendants found guilty of defrauding another set of investors, of at least $49 million, by the Securities and Exchange Commission (SEC)  in July 2023.

Martinez, who exercises the full control of IX Global LLC, a multi-level marketing company, partnered with DEBT Box and asked investors to purchase assets offered by the latter. The SEC alleged that the "node licenses" created by DEBT Box were a sham and that the company and its principals lied about virtually every material aspect of their unregistered offering.

The case of Debt Box is different from the one in India. The case against the accused in India, connected to TP Global FX, is being heard by a special CBI court in Kolkata. Meanwhile, local authorities, journalists and for some, even families have turned their back on the victims who lost money in this scam.

TP Global FX’s app is still available on Google Play Store and an email sent to Google India didn’t elicit any response.

Meanwhile, hundreds of investors in India rue the loss of their investments, due to bad judgements and poor research.