KARACHI: The National Cyber Crime Investigation Agency on Thursday said it had uncovered an alleged Ponzi scheme network in Karachi and detained several foreign nationals during a joint operation carried out with intelligence and law enforcement agencies.
According to an NCCIA statement, the raids were conducted in Defence Housing Authority Phase 1 and Phase 6, where multiple foreign nationals were taken into custody on suspicion of running a fraudulent investment operation.
The agency said that important and sensitive data had been recovered from the suspects during the operation and was now being analysed as part of the investigation.
Preliminary findings indicate that the detained individuals were allegedly operating a well organised Ponzi scheme network, which authorities believe affected thousands of people and resulted in serious financial losses for investors. However, officials said further details regarding the scale of the fraud and the number of people involved had yet to be confirmed.
Authorities said legal proceedings would be initiated against those involved, while investigations were continuing to determine the full scope of the operation and to identify additional suspects linked to the network.
A Ponzi scheme is a form of financial fraud in which returns paid to early investors are funded using money from later investors, rather than from profits generated by a legitimate business.
The NCCIA has previously taken action against similar operations. In July, the agency raided a factory in Faisalabad and arrested 149 suspects, including 48 Chinese nationals, in connection with a Ponzi scheme. In February, the National Accountability Bureau Lahore also launched a crackdown on several entities accused of drawing thousands of people into fraudulent investment schemes.
The term Ponzi scheme is derived from Charles Ponzi, who in the 1920s promised high returns through a fake investment model involving international postal vouchers. Instead of making genuine investments, he used funds from new investors to pay earlier ones, a model that continues to surface in online fraud today.
