Bhagtani's INVESTMENT TRANSFER Scam -- How It Works

Mumbai, 1st October, 2017: Flat-buyers who have already lost their shirt thanks to Bhagtani builders, return to Bhagtani's office in the desperate hope of getting it back. They come out of the door, thinking that they got their shirt back. Only weeks or months later do they realize that they have lost their pants as well! Repeat-victims are a regular source of money for Bhagtani builders. In an earlier article titled, "Beware of EXCHANGE OFFERS of Bhagtani Builder", we described how the builder's office entices people who have already booked flats in non-starter projects -- namely Bhagtani Riyo, Sapphire, Savannah and Serenity -- by offering "transfer of their investment" to projects of other builders with whom they have a tie-up.

This "transfer" is a magician's trick, an illusion created for financially exploiting the gullible flat purchasers. It is an elaborate hoax, a scam targeting hundreds of people. If you transfer to another project, it means that you have been cheated not just once, but twice by Bhagtani, and also, that you are now laid wide open for exploitation by the new builder!

Bhagtani victims, please tattoo this sentence on your chest like Ghajini: "If a Bhagtani employee calls me for a meeting, it is only for the purpose of taking more money from me". Repeat this sentence everyday in the morning when you look in the bathroom mirror and brush your teeth, so that you don't ever forget it. The Bhagtanis do not pay their employees a salary month after month for refunding lakhs and crores of rupees that they have collected from gullible people like you! Theirs is an office of practiced crooks , and no, that is not an exaggeration, it is a statement of fact! Bhagtanis are experienced scam artists who entangle you in a web of verbal commitments and fraud paperwork!

If you still think Bhagtani builder wants to refund your money, even partly, by enabling you to transfer your investment to another builder, then you, Sir, are a very gullible person. But you may take comfort in the fact that you are in good company, because highly qualified people and successful businessmen fall for Bhagtani's transfer scam every passing day.

STEP-BY-STEP EXPLANATION OF BHAGTANI'S TRANSFER SCAM

STEP 1: FLAT-BUYER AGREES TO "TRANSFER THE INVESTMENT". Let us assume you booked a flat in Riyo project at Mira Road in September 2014, gave a booking amount of Rs 10 lakh to Bhagtani, and were never asked to make another payment. You got an allotment letter, wherein the total consideration mentioned for the flat was, say, Rs 65 lakh. In September 2017, you were informed that Riyo project was indefinitely stalled, and you were invited to Bhagtanis's office to discuss about "transferring your investment". What happens next? To begin with, Bhagtani's office persuaded you to let go of the interest amount, and "transfer" your principal of Rs 10 lakh to another project by some builder you have vaguely heard of. (Let us call him Unknown Builder.) "The project is RERA-approved," Bhagtani's office tells you; this convinces you that the offer is genuine. You agree to the transfer as it appears to be your only chance of recovering your Rs 10 lakh.

STEP 2: FLAT-BUYER AGREES TO PAY A HIGHER RATE FOR THE NEW FLAT. Now Bhagtani's office convinces you that the property rates have risen and so you have to shell out Rs 20 lakh more for a flat of the same size as the one you booked. However, because of Bhagtani's friendly relations with Unknown Builder, you will only have to pay Rs 15 lakh extra. So, you agree to the new flat costing Rs 80 lakh. Remember, you have never met this Unknown Builder; this entire discussion is happening in Bhagtani's office, but you have agreed to pay Rs 70 lakh to Unknown Builder in order to "recover" your initial investment of Rs 10 lakh with Bhagtani. What you don't realize is that if you went and directly negotiated at the Unknown Builder's sales office as a fresh buyer, you would get the flat at Rs 70 lakh! 

STEP 3: YOU AGREE TO BACK-TO-BACK BANK TRANSFER. Bhagtani's office repeatedly stresses that Bhagtani's office will repay you only on the condition that you will imediately book a flat with Unknown Builder; otherwise Bhagtani does not have the money to repay you for the next 36 months. If you ask how Bhagtani is able to repay you for transferring this amount to Unknown Builder, their vague explanation is that they have a commercial tie-up, bulk booking of flats at a special rate, etc. etc. To ensure that you don't back out of this deal at the last minute, you are informed that you MUST transfer money to Unknown Builder at the same instant that Bhagtani transfers this amount to your bank account. You agree to this ridiculous condition.

STEP 4: YOU AGREE TO 10% EXTRA PAYMENT. Bhagtani's office tells you that they will transfer Rs 10 lakh to your account, but you will have to transfer Rs 11 lakh to Unknown Builder. This is non-negotiable. You agree to this, because now you are hooked to the idea of recovering your Rs 10 lakh from Bhagtani. If you insist, you may be grudgingly allowed to meet with someone from Unknown Builder's office, but only under the watchful eye of Bhagtani's man, who ensures that you don't ask any probing questions.

STEP 5: MONEY CHANGES HANDS IN A FLASH. The morning for carrying out this transaction arrives. You know that two of Bhagtani's men will act together, simultaneously, to make this back-to-back transfer happen. What you don't know is that three Bhagtani men are involved, not just two, and the transfer is not just back-to-back. It is actually back-to-back-to-back! You sit down at your bank branch and fill out the RTGS/NEFT form for an amount of Rs 11 lakh, and Bhagtani's man no. 1 sits with you and double-checks that you have clear balance of at least Rs one lakh in your account, so that when credit of Rs 10 lakh comes into your account, you will transfer Rs 11 lakh to Unknown Builder. Relying solely the word of Bhagtani's man and the picture he has painted in front of your eyes, you submit the RTGS form to your banker. Bhagtani's man no. 2, sitting at their friendly bank branch, transfers Rs 10 lakh into your account. In a flash, your account shows the credit of Rs 10 lakh, and in the next instant, a debit of Rs 11 lakh. The transaction is complete. You feel instantly relieved, because your amount has been transferred from Bhagtani Sapphire, which is a dead project, to the RERA registered project by Unknown Builder. What you don't realize at the point of time is that Unknown Builder has not signed any paper with you, he is free to deny or change any part of this deal, including the terms & conditions and final consideration amount that you were told by Bhagtani's office. Your hands are tied while Unknown Builders hands are totally free to impose any terms and conditions on you, as he desires.)

STEP 6: MONEY RETURNS TO BHAGTANI. This part of the deal happens behind your back, and it is a closely-held secret. Bhagtani's third man is sitting at the Unknown Builder's bank, and he ensures the transfer of Rs 10 lakh back to Bhagtani. Unknown Builder only keeps Rs 1 lakh out of your Rs 11 lakh, as a commission for playing a role in this scam. The long-term benefit for Unknown Builder is that you are now tied to him as his allottee, and he can start imposing as-yet-undisclosed terms and conditions to exploit you. He can promptly send you the allotment letter, or delay endlessly, as it suits him. He can start sending you demand letters with tight deadlines, threatening to forfeit your amounts if you pay late, charge penal interest and late fees, etc. etc. As you have already agreed to pay Rs 80 lakhs for his flat, which actually costs only Rs 70 lakhs in the market, he is not at all at a loss.

ALTERNATIVE STEP 5: YOU AGREE TO MULTIPLE SMALL INSTALLMENTS. Bhagtani's office tells you that they will transfer Rs 10 lakh to you in 5 installments of Rs 2 lakh each, because they fear that you may cheat them by backing out of the deal at the last minute! Actually, they want to cheat you, and they can do it in at least two ways: (a) If you have, say, Rs 2.5 lakh in your bank account on the day of the transfer, then your bank transfer of Rs 2 lakh to Unknown Builder will happen even if Bhagtani's back-to-back transfer of Rs 2 lakh does not arrive due to some "miscommunication". Bhagtani's office is full of excuses, but the fact is, you just got cheated again! Instead of you getting back Rs 10 lakh, you ended up giving out an additional Rs 2 lakh! (b) Bhagtani's office can transfer, say, three payments of Rs 2 lakh each, and then start delaying endlessly. Meanwhile, Unknown Builder starts  insisting on full payment of Rs 11 lakh within a short time; he threatens to otherwise forfeit the amount that you already paid. If you succumb to this pressure and pay the remaining amount out of your own resources, you may permanently lose Rs 4 lakh that Bhagtani was supposed to repay you. On the other hand, if you don't pay promptly, then Unknown Builder can forfeit your Rs 6 lakh. In this scenario, Bhagtani starts out with Rs 10 lakh, and ends up with Rs 14 to 16 lakh of your money! And now you are stuck in a dispute with two builders -- Bhagtani and Unknown Builder.

The broad workings of Bhagtani's investment transfer scam are in this diagram:





THE EFFECTS OF THE TRANSFER: BHAGTANI'S DEBT STANDS CLEARED. In the scenario that Bhagtani transfers the entire amount of Rs 10 lakh to your account, Bhagtani's books of account will show that they fully repaid you, and you have no further claim on them.

If you take this transaction on its face-value, you will feel that you should not complain to the police or any other judicial forum, because Bhagtani's accounts and your accounts show that you have been fully repaid, and that you have made a fresh investment with a new builder with open eyes. This is despite the fact that Bhagtanis kept the entire amount of Rs 10 lakh, didn't actually return anything to you, and set you up for further systematic exploitation by Unknown Builder.It is only if you understand the fraudulent nature of this transaction that you will be able to go to the police and register FIR against Bhagtani, and also against Unknown Builder.

Needless to say, the fund transfer of Rs 10 lakh comes to you from one Bhagtani company (say JVPD Properties), and the return flow will be into the account of another company (say, Hotel Beano Resort Pvt Ltd.) So, only a full investigation of the books of account of all of the 20-odd Bhagtani companies will reveal the fraud, cheating, conspiracy and money-laundering.

ISSUED IN PUBLIC INTEREST BY
Krishnaraj Rao
9821588114
krish.kkphoto@gmail.com
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Comments

  1. great and tremendous stratagy they followed....they guys offered same way to us.
    once i asked for all legal drafted copyies before signing and transfers.. they guys not called up again and never turned up on email.
    such a big cheaters and fraud.

    ReplyDelete
    Replies
    1. If someone isn't willing to share the legal papers of their scheme in advance, it is probably illegal.

      Delete
  2. Such dirty schemes can only be cooked up by the seasoned criminal minds of the father and son Bhagtani team and their conniving staff. The Unknown builder projects you mention Krish are usually projects by Ravi Group, who by Bhagtani staff's own confession is the worst builder in Mumbai. Although it should not be a surprise since Bhagtani will only keep company of builders of the same devious and warped nature as Bhagtani. India has probably never seen pyramid schemes and fraud artists to match the accomplishments of the Jaycee Group. This is one family and staff that truly deserves their place in prison.

    ReplyDelete
    Replies
    1. Hi Nischal. I suspect there are a few dozen others who run similar scams in Mumbai. It's just that we never learn about venomous snakes till we get bitten by them :-)

      Delete
  3. Thanks for sharing bhagatani strategy details to fool the buyer like us. Even we did FIR but not sure whether police also did not took any action against him.

    ReplyDelete
    Replies
    1. Try again. Police is more sensitized now, and is more likely to take action.

      Delete
  4. Well written awareness item. Even we were saved from such traps of builder.

    Let me share my experience. Bhagtani called us for a meeting and assured that he will some options that we will definitely like.

    One of our friend has invested Rs 15 L in Riyo and today, it's value with interest wd be above 26 L or so. Bhagtani's friend builders offered to Shift to another project in Noida, cost wd be similar,means around 26 L.Then we asked whether he will transfer us there without we need to pay a single penny. At this he said, you have to first pay full amount, he will settle later on.

    This is just trick to get more money out of your purse.

    Avoid this builder as much as possible.

    ReplyDelete
  5. Niraj Kakad construction Santacruz West based builder also same scam going on.

    ReplyDelete
    Replies
    1. I can write about this if you give me details, documents and proofs. Call me on 9821588114 to discuss.

      Delete

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