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Police Officer Charged in $1.3 Million Bitcoin Extortion Scheme

The police officers kidnapped a businessman, took them to a farmhouse where they forced them to transfer Bitcoins. Allegedly, they received more money in order to release the three businessmen. A special task force was formed to investigate the matter.

10 police officers in the Indian state of Gujarat are facing allegations of kidnapping a businessman and forcing him to hand over 200 Bitcoins or around $1.3 million to them. They are also facing allegations of attempted extortion and corruption according to the state’s Crime Investigation Department.

The 10 include nine constables and a local town’s police inspector Anant Patel and the eleventh is a civilian “fixer”. They kidnapped local residents Shailesh Bhatt, Kirit Paladiya and a driver referred to as Mahipal on February 14. The kidnappers then took them to a Keshav Farm at Magodi village near Dehgam, beat them and forced them to transfer the Bitcoins. They were also asking Bhatt to pay another third party in order to retrieve his Bitcoins.

Three constables — Ketan Patel, Babubhai Der, and Vijay Vadher — have so far been arrested on the matter. Meanwhile, the remaining are on the run.

The CID report said,

“We checked the records and sees that the use of police vehicles was unauthorized,” Bhatia said. “The team did not follow the procedure of informing Amreli or Gandhinagar Police. The trio was releasing after an alleged deal. Ketan Patel, a resident of Surat, had come to Magodi at the behest of Anant Patel and played an important role in the deal.”

Shailesh Bhatt reported that the 200 Bitcoins were transferring from a digital wallet of his business partner Kirit Paladiya. He reported that another 32 crores ($5 million) were given as payment for the release of the businessmen from the farmhouse. The application by Bhatt also says that 78.5 lakh ($121,000) was paying to get their Bitcoins back.

Bhatt sent his partners Rajesh Desai and Dilip Kanani with the Rs 78.5 lakh to Amreli. As to bribe police to not name him in any fictitious case.

The CID filed First Information Report to mark the first step in a police inquiry in the country. Director-general of police Ashish Bhatia said they would examine wallets belonging to Bhatt and Patel. Thus for prove of transfer of the 200 Bitcoins as initial investigations could not verify that the transfer of the Bitcoins. And the said transactions took place.

However, they said they proved the crimes of abduction and attempted extortion by the accused.

According to Bhatia, the issue will be investigated by a Special Investigative Team to examine the matter

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David

David Kariuki is a journalist who has a wide range of experience reporting about modern technology solutions including cryptocurrencies. A graduate of Kenya's Moi University, he also writes for Hypergrid Business, Cryptomorrow, and Cleanleap, and has previously worked for Resources Quarterly and Construction Review magazines.

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