The Glitter, The Lies, and the Lock on the Door

By Our Investigations Desk, Mangaluru

On a sweltering July afternoon last year, a crowd gathered outside a modest building in Katipalla, Surathkal. Brightly-coloured handbills were being passed around, each one a little slice of hope. “Just ₹1,000 a month,” they read, “and you could walk away with ₹12,000 in cash and maybe even a car.”

It wasn’t the first time this coastal town had heard such promises. But this one came wrapped in familiarity—run by locals, in the heart of the neighbourhood, out of the BMR building everyone knew.

Police now say it was all a mirage.

How the Trap Was Set

The so-called New India Royal Scheme operated with remarkable simplicity. Proprietor M Mohammed Ashraf and his manager, Haneef, didn’t bother with banks or formal contracts. People paid their first ₹1,000 in cash, the rest through Google Pay. The scheme was neat, tidy, and, on the surface, perfectly believable.

They weren’t selling stocks or cryptocurrencies—things most here wouldn’t touch. They were selling trust.

“Everyone knew someone who claimed to have got their payout,” recalls Abdul Rauf, a local tea stall owner. “You saw pictures of winners with bikes and gold rings. Who was I to doubt it?”

The hook was irresistible: ten months of modest payments, a tidy profit at the end, and a lottery-style shot at something bigger.

The Cracks Appear

By April 2025, murmurs began. People who had reached the end of their ten months were told to “wait just a bit longer.”

Two months later, the waiting ended—with silence. The shutters were down, the office stripped bare, and Ashraf’s phone switched off.

That’s when the scale became apparent. Police believe over 10,000 investors had poured in their money, collectively losing more than ₹10 crore.

A Familiar Pattern

Coastal Karnataka has seen this before. In 2017, a jewellery-linked chit fund promised gold returns and vanished overnight. In 2020, an agro-investment scheme collapsed under similar circumstances.

Experts say the signs were there.
“If you’re being promised returns far higher than any bank, and prizes on top, that’s a red flag,” says financial consultant Priya Shetty. “But these schemes exploit social proof—when neighbours or relatives invest, skepticism fades.”

The Aftermath

Now, the victims are left with little more than scraps of paper and screenshots of payments. Some have pawned jewellery to cover what they lost. Others quietly avoid talking about it, embarrassed they were taken in.

“People think it’s greed that drives these investments,” says one retired schoolteacher who lost ₹30,000. “But for most of us, it’s desperation. Banks won’t give you such returns. And we believed because it was our own people running it.”

Police have booked the two accused under laws against unauthorised deposit schemes. Whether the victims will see their money again is unclear.

In the Streets of Katipalla

The once-bustling BMR building now stands locked, its faded signboard a reminder of the promises it once made. Children still play cricket in the lane outside, but older residents glance at it with quiet resentment.

As one local shopkeeper put it, shaking his head: “When the scheme was alive, it brought us together in excitement. Now, it’s brought us together in loss.”

 

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FAQs

Q1: What exactly is an ‘unauthorised deposit scheme’?
An unauthorised deposit scheme is any investment program that collects money from the public without the necessary licences or regulatory approvals, often promising unrealistic returns.

Q2: What should victims do now?
Victims should file a formal complaint with the police and provide all receipts, payment proofs, and promotional materials they received. Joining collective legal action can strengthen their case.