In a significant ruling, the Bombay High Court granted bail to Simpy Bharadwaj, the sister-in-law of the late Amit Bharadwaj, a central figure in one of India’s largest cryptocurrency fraud cases. Simpy Bharadwaj was implicated by the Enforcement Directorate (ED) in connection with the massive multi-crore bitcoin Ponzi scheme orchestrated by her brother-in-law. The Ponzi scheme, which defrauded investors of an estimated ₹6,606 crores, had sparked a nationwide investigation into the operations of Amit Bharadwaj and his company, Variabletech Private Limited (VPL), under the banner of GainBitcoin.
The Allegations
Amit Bharadwaj, the mastermind behind the fraudulent operation, launched an elaborate Ponzi scheme promising high returns on investments in bitcoin cloud mining contracts. Through his company, VPL Singapore, and the website GainBitcoin.com, Bharadwaj lured thousands of investors with a promised return of 10% on each bitcoin invested over 18 months. However, the promised returns never materialized, and instead, the funds were allegedly diverted by the company’s directors, including Amit Bharadwaj and his family members.
According to the ED, Simpy Bharadwaj played an active role in the operation by participating in meetings where the fraudulent schemes were discussed. The agency also alleged that she was in possession of critical information related to the scheme, including access to certain passwords and details about the proceeds of the fraud. Additionally, the ED claimed that she actively induced investors to put their money into GainBitcoin’s cloud mining contracts, furthering the Ponzi operation.
Arrest and Obstruction of Justice Charges
The ED’s investigation into Simpy Bharadwaj intensified following a dramatic search conducted at her residence on December 15, 2023. According to the ED, Simpy created a ruckus during the search operation, which allowed her husband and father-in-law to escape from the authorities. This incident led to her arrest two days later, on December 17, 2023, on charges of obstructing justice. The ED’s complaint alleged that Simpy’s actions during the raid amounted to an intentional effort to derail the investigation and protect her family members from arrest.
Following her arrest, the ED moved a remand application, and Simpy was placed in ED custody until December 26, 2023, after which she was sent to judicial custody. A subsequent bail application filed in the Special Court was rejected in April 2024, prompting her to approach the Bombay High Court for relief.
Defense’s Argument
Simpy Bharadwaj’s defense team argued that her arrest was unjust and primarily based on the allegations of obstructing the ED’s investigation during the December 2023 raid. They emphasized that Simpy had not been named in the original FIRs filed against her brother-in-law and that her involvement in the Ponzi scheme was minimal, if any. The defense claimed that her presence at the meetings related to GainBitcoin did not imply active participation in the fraud, and the ED had no substantial evidence linking her to the core criminal activities of the Ponzi operation.
The defense also raised concerns about her continued incarceration, stating that Simpy had already spent ten months in judicial custody. Moreover, they highlighted her status as a mother of a six-year-old child, arguing that her prolonged detention was unnecessary and unjust given the lack of substantial evidence against her.
ED’s Response
On the other hand, the ED vehemently opposed Simpy’s bail plea. They argued that Simpy was not just a passive participant but was actively involved in defrauding investors. The ED contended that she played a significant role in promoting the Ponzi scheme, citing her access to crucial information and her association with her brother-in-law’s operations. The agency further argued that Simpy’s actions during the raid were part of a deliberate attempt to shield her family members from arrest and that her release could potentially jeopardize the ongoing investigation.
The ED maintained that there was enough material evidence against her to deny bail, including her alleged involvement in inducing innocent investors and diverting the proceeds of the crime. The agency also pointed out that the two FIRs filed in 2019 and a subsequent FIR in 2022 implicated her as an accused, further justifying her continued detention.
Court’s Decision
After hearing both sides, Justice Manish Pitale of the Bombay High Court granted bail to Simpy Bharadwaj, acknowledging her right to bail under the special category provisions for women under Section 45(1) of the Prevention of Money Laundering Act (PMLA). The court observed that the ED’s arguments, particularly regarding her alleged role in the Ponzi scheme, lacked sufficient material evidence. Justice Pitale also took into account Simpy’s ten-month incarceration and her responsibilities as a mother, ruling that further detention would serve no purpose as the trial was unlikely to commence in the near future.
In his order, Justice Pitale emphasized that anticipatory bail is not automatically denied in cases involving serious allegations if there is a lack of compelling evidence. He also clarified that Simpy’s release on bail was subject to several conditions, including surrendering her passport, cooperating with the ED’s ongoing investigation, and refraining from tampering with evidence or contacting witnesses.
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