Mumbai: Amber Dalal confesses mistakes to EOW amid investor fraud allegations

Amber Dalal swindled hundreds of crores from over 1,000 investors

Amber Dalal, the Chartered Accountant, accused of duping thousands of investors of multiple crores admitted to his mistakes to the EOW officials while being questioned. ‘Galti hogayi Sahab' were the lines of Dalal, the proprietor of M/s Ritz Consultancy.

Although a confession is not admissible in court, it aids investigation. EOW officials will corroborate Dalal's statement with forensic audits, crucial for tracing the money trail.

Meanwhile, Dalal was taken to the JJ hospital on Saturday (April 6) morning, after he complained of chest pain and uneasiness. Dalal was sent to judicial custody for fifteen days by the special MPIDA Court on April 8, confirmed his advocate.

"I will approach the court for getting angiography done at a private hospital," was the response of Dalal to the doctors at JJ hospital, when they advised an angiography, said the police.

Promptly paid returns

"In his submission, Dalal informed the investigators that he was prompt in paying the returns to his investors and that he had no intention ever to dupe any of his investors, some of them being associated with him for over a decade," said senior EOW official.

The official added, "Even the clients of Dalal, have acknowledged that he was prompt in paying their returns, but it was only in the last few months, that he delayed his payment. This was the first time (March 2024) that he failed to keep his word."

Post-COVID downfall

"Dalal claims that after the COVID-19 outbreak and subsequent lockdown in 2020, which negatively impacted the trading market, he faced challenges. He alleged that he managed to pay returns to investors from his profits from 2021 to 2023. However, by late 2023, he began using new investments to pay clients instead of trading, leading to difficulties in meeting fund flow," said the EOW official.

On investigation

"We've seized assets and frozen 20 out of over 30 bank accounts belonging to Dalal. Additionally, his laptops, mobiles, and other digital equipment have been confiscated for data extraction by our experts," said Jt CP (EOW) Nishit Mishra.

Mishra, expressed his dismay, over the delay in getting bank details, which is crucial for the forensic auditors, to begin their analysis of the money trail.

"We held Dalal for 14 days, and he's now in judicial custody. However, despite our prior requests, we haven't received the complete bank statements. These statements are crucial for forensic investigators to trace the money trail and identify beneficiaries. Delays strain our team, as we rely heavily on auditors' findings to file the charge sheet within a set timeframe," Mishra said.

Is it a Ponzi scheme?

On asking the officer if Amber Dalal's case can be tagged as a ‘Ponzi' scheme? Mishra said, "In India, the term Ponzi scheme" isn't legally defined. Complaints of fraud involving promises of high returns or money circulation schemes are typically directed to the EOW. The investigation into Amber Dalal's firm, M/s Ritz Consultancy, and other entities requires a forensic audit to understand the money trail and determine the nature of the white-collar crime. Preliminary inquiries suggest Dalal was trading with brokers, but further investigation is needed to uncover whether his financial crisis stemmed from trading losses, poor investments, or misappropriation of funds, which will be clarified by the forensic audit report.

Distribution of money

When informed that senior citizens and single parents, who were solely dependent on the returns from Dalal, were left in the lurch, the official said, "It is unfortunate that many innocents became victims of one man's wrongdoing. We follow MPID court orders for disbursement. Investors who've received a principal amount won't get monthly payouts. Those with unpaid principals get the remaining amounts. Reinvestment plan investors only get the principal amount."

The maths

The investor simplified the above statement, with an example, "Person A, who invested 10 lakh in 2018 and received 2.5 lakhs annually, won't be eligible for further payments as they've already received their principal. Person B, investing 10 lakh in 2020 and receiving 7.5 lakh, would get the remaining outstanding principal of 2.5 lakh. Person C, investing 10 lakh in 2011 with a reinvestment plan now totalling 30 lakh, would receive only their initial 10 lakh investment, excluding reinvestment gains."

Other side

"My client complained of chest pain and was taken to JJ hospital on Saturday morning. I have been allowed by the court to meet him (without police presence) and since it is a privilege communication between an advocate and client, I cannot disclose anything further," said Advocate Benny Joseph.

Scam victims create support group

From aiding ongoing police investigations to following up on court hearings, numerous investors defrauded by Amber Dalal in the commodity trading investment scam are now offering support to fellow investors. They've formed a support network, assisting with job searches, providing counselling, and offering coaching. City-based psychiatrists believe that if successful, this investor group will offer solace, comfort, and confidence to those in need.

Investors defrauded by Amber Dalal are now offering support to fellow investors

Ramon Magsaysay award-winning psychiatrist Dr Bahart Vatwani, said, "Shared loss and grief often lead to collective healing efforts within human groups. Knowing others face similar struggles, which eases individual pain and fosters empathy. These shared healing endeavours offer emotional closure and catharsis for all involved, resembling how displaced refugee groups support each other despite being strangers."

"It's uplifting that the victims formed a support group, showcasing human altruism. It's a challenging but promising start, offering solace, comfort, and confidence to rebuild lives. This fresh initiative breathes hope into families," said psychiatrist Dr Harish Shetty.

"In a world consumed by angst and primitive instincts, isolated individuals, particularly the elderly, often succumb to anxiety and insecurity, leading to emotional blindness. This can result in irrational investments driven by greed, causing the rational mind to falter. To avoid this, it's crucial to engage in rational reflection and seek guidance from experts. Involving family members for additional support and due diligence is also advisable," added Dr Harish Shetty.

The Whatsapp message

An investor, who did not wish to be identified, shared an appeal message, which read, "Unfortunately a lot of our fellow investors are left in deep misery and anguish due to the fraud caused by Amber Dalal. This sudden misfortune has many of them battling to make ends meet. Some of the investors would need to restart their careers while others are struggling to pay not only the lawyer's fees but also pay fees of their children as the new academic year begins."

Don't ignore signs of guilt

"Guilt is often a result of conflicting actions and beliefs, leading to emotional distress. Many may feel self-guilt, blaming themselves for financial losses incurred by family or friends in investments they recommended. This can lead to anxiety, depression, and even suicidal thoughts, requiring professional intervention," explained Professor (Dr) P Madhava Soma Sundaram, former President, the Indian Society of Criminology.

Always seek help

"In such a situation, victims facing sudden loss of income and legal battles must adapt to new circumstances, which can be challenging. Seniors, single mothers, and others struggling should seek assistance," Sundaram added.

Helplines

Vandrevala Foundation
9999666555

Helpline KIRAN
(1800-599-0019)

National Tele Mental Health Helpline:
14416 or 1-8008914416 (24/7)

Aasra - 9820466726

Samaritans- 8422984528/29/30 (5 pm to 9 pm)

BMC MPOWER
1800 120 820050 (24/7)

ICALL - 9152987821 (10 am - 8 pm- Mon to Sat)