Malayali Couple Vanishes After Rs. 100 Crore Chit Fund Scam in Bengaluru: Over 265 Victims File Complaints

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Introduction

A major financial scandal has rocked Bengaluru after a Malayali couple reportedly absconded following a massive Rs. 100 crore chit fund scam. The couple, originally from Kerala and residing in the city for several years, ran an unregistered financial scheme promising high returns through what they claimed were "secure" chit fund investments.

Authorities have confirmed that over 265 victims have come forward so far, filing formal complaints with the police and cybercrime units. As investigations deepen, more layers of the multi-crore scam are being unearthed, revealing a classic case of financial fraud masked under trust and community networking.

The Modus Operandi

The couple allegedly ran a chit fund business under the guise of a registered finance company, targeting middle-class and lower-income families, many of whom were from Kerala and Tamil Nadu.

Key elements of the scam:

  • High-return promises: Investors were promised up to 20–30% annual returns on small-to-medium monthly contributions.

  • Word-of-mouth recruitment: The scheme expanded rapidly through referrals within the Malayali community in Bengaluru.

  • False credibility: The couple reportedly used rented office spaces, professional branding, and even religious/social functions to build trust.

  • No official registration: The chit fund was not listed under the Registrar of Chit Funds or SEBI, making it illegal under Indian law.

The scam ran for nearly five years, gaining momentum post-COVID-19, when many sought alternative investment avenues for financial recovery.

How the Scam Unfolded

In early 2024, payment delays and missed returns began triggering suspicion among long-term investors. The couple offered vague excuses citing liquidity issues and regulatory bottlenecks. By mid-2025, all contact ceased.

As of July 2025:

  • The couple is untraceable, with their last known location being Whitefield, Bengaluru.

  • Multiple bank accounts have been frozen, but the bulk of the funds are believed to be siphoned off.

  • Complaints have been filed across Whitefield, Electronic City, and Jayanagar police stations.

Many victims claim to have lost their life savings, gold, and property investments.

Legal and Investigative Action

The Bengaluru Police Economic Offences Wing (EOW) has taken over the investigation. Officials are exploring charges under:

  • IPC Sections 406 (Criminal Breach of Trust)

  • 420 (Cheating and Dishonestly Inducing Delivery of Property)

  • 120B (Criminal Conspiracy)

  • Prize Chits and Money Circulation Schemes (Banning) Act, 1978

Police have requested public assistance in locating the accused. Look-out circulars have been issued at all major airports and border checkpoints.

Public Outcry and Victim Testimonies

The scam has led to a massive public uproar. Community halls and social media platforms are filled with victims sharing experiences of betrayal, financial collapse, and emotional trauma.

One investor stated:
"I invested Rs. 12 lakh over three years based on a friend’s recommendation. We trusted them like family. Now I can’t afford my daughter’s education."

Many victims are urging the government and regulatory bodies to enforce stricter rules for informal financial operators and expedite justice in white-collar crimes.

What This Scam Reveals About India’s Chit Fund Crisis

This incident is not isolated. Over the past decade, India has witnessed several high-profile chit fund scams—many involving thousands of unsuspecting investors, especially in Tier 1 and Tier 2 cities.

Key systemic issues exposed:

  • Lack of public awareness about legal chit funds vs. illegal schemes.

  • Weak regulation and monitoring of informal finance operators.

  • A cultural reliance on community trust over institutional oversight.

Experts suggest that digital literacy and mandatory registration of all financial schemes can help prevent such large-scale frauds in the future.

Conclusion

The disappearance of the Malayali couple behind the Rs. 100 crore chit fund scam in Bengaluru is a stark reminder of how trust-based financial models can turn predatory when left unregulated.

Authorities are intensifying their efforts, but the road to justice may be long for the 265+ victims—and likely more who are yet to come forward.

As the search for the couple continues, so does the broader conversation around the urgent need for financial awareness, legal reform, and responsible investing in India's fast-evolving economy.

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