It has been found that over Rs 300 million has been embezzled from Phidim Municipality and Falelung Rural Municipality, the district headquarters of Panchthar, in the last six months through an application called Smart Money Concept (SMC), which claims to eradicate poverty in Nepal.
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Raju Khatiwada of Phidim Municipality-4 was urged by his relatives in Birtamod, Jhapa, to join an online application (app) saying that a small investment would yield good income.
As per the relatives, after the money started coming into the account daily, they formed a team of 20-22 people. After a long time, when the app admins started changing their suspicious activities and behavior, they finally suspected that they had been scammed.
It has been found that crores of rupees have been defrauded through a mobile application called SMC, which claims to eradicate poverty in Nepal. It is estimated that around Rs. 30 crores have been defrauded through the application called Smart Money Concept (SMC) in Panchthar from the district headquarters Phidim Municipality and Falelung Rural Municipality alone.
It has been found that hundreds of people have been defrauded of thousands of rupees through the app, which is not registered anywhere in Nepal, during a period of 6 months from last Jestha to Kartik. The app operators have deceived them by saying that the process for registering the official networking business in Nepal, which has been registered in India and has been active for 14 years, is underway.
The victims say that they managed to get money by sending messages through social media such as Messenger and WhatsApp to the fraud network. Khatiwada said that he was also cheated of more than one lakh rupees by initially attracting money by depositing money in his daily account. ‘There is extreme poverty in Nepal and it needs to be eradicated from the root, for that, they lied that a small investment can get good returns, so I got fooled and added my friends and finally fell for the scam,’ said Khatiwada.
Information posted by SMC admins in the group
According to him, a person could invest a minimum of 3,000 to a maximum of 300,000 rupees to join it. The admins would invite citizens to the network, saying that the more they invested, the greater the returns. In which those who invested 3 thousand rupees were classified as 'K1', those who invested 9 thousand 900 rupees were classified as 'K2', those who invested 33 thousand rupees were classified as 'K3', those who invested 1 lakh 10 thousand rupees were classified as 'K4' and those who invested 3 lakh rupees were classified as 'K5'.
As soon as the admin made the investment, he would pay 20 to 1 hundred and 90 rupees per video to the bank account connected to the application for sending and watching videos daily. The bonus that the agent would get for becoming a member and connecting others was equally attractive. In which if a new member invested 33 thousand rupees, the connecting agent would give him a commission of 11 thousand rupees and if a member invested 3 lakh rupees, he would give him a commission of 1 lakh rupees.
It has been found that the more members he added to his network, the more they were tempted to provide a certain percentage of the amount they deposited, and in just 6 months, he lured about 5 thousand people from Panchthar. Victims say they may have been defrauded of about 300 million rupees.
The admin of the application used to send QR codes to members to deposit money. Khatiwada says that since the names and addresses of Nepalis along with Nepali bank details come up when scanning the QR codes, they invested with confidence that they would not be cheated.
60 million rupees fraud from a single ward
It has been found that more than 60 million rupees have been defrauded from about 200 people in Falelung rural municipality alone. Where teachers, students, employees, political leaders and some ordinary people have also been deceived. It has been found that two to seven people from the same family have deposited money here in the hope of getting good returns.
‘After my best friend urged me, I invested 33 thousand rupees. 15 videos would come daily. I would get paid 76 rupees per video for watching them. I would give money daily for a month. When I added new members under me, I would also give a good bonus based on the investment status,’ said a businessman doing business in Falelung-2. ‘We trusted him and added an investment of 110 thousand rupees in the names of 4 family members. They said that the rules had changed and now the payment would be made only monthly. Recently, the administrators have been out of touch by deactivating the application.’
SMC Group administrators
Some Nepalis, including foreign-sounding names like Lucy, Koiwe and Anna, were also active in the application’s admins. The WhatsApp they used had numbers from countries including Canada and San Francisco. A woman named Lucy, who is an admin on the online list, deactivated the application on Kartik 30, writing her last message in the WhatsApp group, mocking the investors.
‘Hello everyone, I am your recruitment manager, everyone’s intelligence and wealth match each other but your wealth and intelligence do not match, so I want to match you, I only took wealth that does not match your intelligence and should not be yours, I hope you will thank me, express your gratitude and remember this lesson I gave you for the rest of your life,’ she wrote.
SMC Wallet has been deactivated since Kartik 29, immediately after she wrote this message. The Nepalis seen in the admin panel have stopped responding when messaging them. ‘No matter how hard you try to go through the legal process, they only return a reply that is of no use,’ say those who have been scammed.
The domains of the websites SMCCOUS99.com and SMCCOUS79.com made public by the operators of the fraudulent SMC appear to have been registered only about 6 months ago. The QR codes they sent to members asking them to pay had different names each time.
According to Vijay Rai of Falelung-2, there were about 500 groups on the application. Each group had between 300 and 800 members. ‘It seemed that people from Koshi to Sudurpaschim districts of Nepal participated there.’ Each person became a member by investing a minimum of 3,000 to a maximum of 300,000 rupees. ‘The admin would not give access to the application to those who did not pay,’ Rai said.
Rai said that he had deposited money of 33,000 rupees in the names of 7 people, including family and relatives, and had 35 friends and relatives join him. ‘Initially, after some money came into the account, he trusted himself, his family, children, relatives and friends and got them involved. He even invested himself, telling those who said they had no money to earn money from there and pay them,’ he added.
The money from selling cardamom sank
Falelung Rural Municipality-2, where cash crops including cardamom are produced well. The cardamom selling season is currently underway here. It has been revealed that farmers and traders have also invested the money from selling cardamom in SMC. ‘An investment of Rs 133,000 was made in the names of four family members, but in the end, neither the bamboo nor the flute was played,’ said a beneficiary who invested in SMC by selling four tons of cardamom.
Fraud in the name of gifts and taxes
In the initial stage, the SMC app operator, who had deposited money in the account to lure people, started informing them that they would send payments weekly after about a month, then fortnightly and after three months on the 5th of every month. However, the amount they would receive could be seen in the wallet, in the meantime, they had deceived some customers by saying that they had received a car and some had received a gold ring. Those who had received a car were told that they would send it to the place where it was found, and those who had received a ring would be delivered to their homes, according to the cheated people. Another victim, Anju Rai, says that the rules had been changed to allow only monthly payments, and that they had to pay income tax to pay the amount.
According to her, they had cheated them for the second time by showing that they had deposited one lakh rupees in the SMC wallet and making them pay 25 percent of the amount shown in the wallet. After sending the amount requested to deposit for tax, it was removed from the wallet and group.
Nepal Police's Cyber Bureau's information to beware of fraud
Anju said that those who were said to have received a car and a gold ring as a gift for doing good business were deceived by saying that they would send it to a convenient place from Chitwan, and some were told to come and collect it by arranging a time. Ganesh Tumrok of Phidim-6 said that he invested some money to keep the 'friends'' after repeated requests from people's representatives, official-level employees and trusted people who have earned a good reputation in the society. According to him, along with the leaders and cadres of responsible political parties, people's representatives, employees, businessmen and teachers have also been trapped in SMC.
Police say: 'Many are trapped, they don't complain'
The Cyber Bureau of Nepal Police issued a public notice on Kartik 29, saying that a group of people who are cheating by showing the lure of earning money quickly through the SMC app is active. But by the time this information from the Cyber Bureau was made public, the SMC wallet had also become inactive.
By that time, those involved say that more than 5,000 people in Panchthar alone had joined this network. Apart from Panchthar, thousands of people from other districts of Nepal were also connected to the wallet. Shubharaj Thapa, former president of the Panchthar Chamber of Commerce and Industry, says that the fraud was committed by showing the lure of attractive earnings and paying the amount as initially agreed.
According to Neer Bahadur Guragain of Falelung-2, most of those who joined the network have been repeatedly requesting for their promotion, increase in monthly bonus and attractive remuneration, and many have invested just to please their friends. 'After a disabled neighbor asked me to become a member, saying that he would get a promotion, I also invested some money, it was like gambling,' he said.
Panchthar Police Chief DSP Anish Kumar Karna said that no complaint has been received so far about being cheated through this application. 'In our notice, a large amount of money has been paid illegally through the digital app, but no one has come forward with a complaint. It is possible that they have not filed a complaint due to embarrassment due to being involved in illegal transactions,' he said. 'It is possible that if some victim comes forward with a complaint, the entire network may not have filed a complaint.' What should we do if we get scammed while the police are alerting us?’
The police estimate that the majority of people involved in the SMC fraud scheme include ordinary people, traders, employees, public representatives, bankers, and people working in marketing at various commercial establishments. He said that since the money that all the ordinary people have QR-ed has gone to the individual’s account, it is possible to investigate from this angle. ‘The police can reach the perpetrator, but how can they investigate if there is no complaint? We need evidence,’ says DSP Karna.
