In a significant crackdown on financial fraud, the Economic Offences Wing (EOW) of Odisha Police today arrested Pratap Kumar Rout, a key figure in one of the country’s largest Ponzi schemes, from his residence in Jhinkiria, near Cuttack. The 40-something accused, son of Prafulla Rout, was apprehended in connection with EOW PS Case No. 14 dated October 14, 2025, registered under Sections 420 (cheating), 467, 468, 471 (forgery), and 120-B (criminal conspiracy) of the Indian Penal Code (IPC), read with Sections 4, 5, and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, Section 66(D) of the Information Technology Act, and Sections 21(1)(3) and 23 of the Banning of Unlawful Deposit Schemes (BUDS) Act.
Rout, identified as the Odisha head and local coordinator for Hedgex Fund LLP, is set to be produced before the Hon’ble Designated Court under the Odisha Protection of Interests of Depositors (OPID) Act in Cuttack later today. The arrest follows a complaint filed by Bijay Kumar Panigrahy, a retired investor from the region, who alleged he was swindled out of ₹92.60 lakh in the fraudulent scheme.
According to Panigrahy’s FIR, Rout personally approached him, touting Hedgex Fund LLP—registered with the Registrar of Companies (ROC) in Goa in 2023—as a legitimate Forex trading venture promising eye-watering monthly returns of 11% to 18%. “It wasn’t like those shady money-rotation games,” Rout allegedly assured, claiming he had verified the operations firsthand. Convinced, Panigrahy transferred his retirement savings to bank accounts provided by Rout. But within days, the fund ceased operations, freezing his investment. When confronted, Rout offered hollow promises of refunds while dodging accountability.
Investigations by the EOW paint a grim picture of a classic Ponzi operation orchestrated by Hedgex’s designated partners, Dinesh Kumar Jain and Kuldeep Singh Panwar. Rout played a pivotal role as the ground-level enforcer, collecting funds through a web of ever-changing bank accounts, cash deposits, and even hawala networks. He organized promotional seminars in Cuttack and Bhubaneswar to lure victims, amassing crores before the scheme imploded. Post-collapse, Rout continued stringing along distraught depositors, claiming ongoing negotiations with Jain to recover their money.
The scam’s tentacles extended far beyond Odisha, ensnaring over 3 lakh victims across 10 states: Andhra Pradesh, West Bengal, Assam, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat, Tamil Nadu, Delhi, and Odisha. Preliminary probes estimate the total haul at over ₹1,000 crore, with Odisha alone reporting more than 12,000 affected individuals and losses exceeding ₹139 crore. To evade detection, the fraudsters spawned sister entities like Kaushalaya Foundation, Lavya World, Frix Market, and Lavya International between 2023 and 2024, funneling funds through mule and third-party accounts.
“Small initial payouts built false trust, drawing in massive investments before the operators vanished,” an EOW spokesperson explained. “Hawala agents handled cash collections in the crores, with Rout at the helm in Odisha.” During the raid, authorities seized a trove of incriminating documents from Rout’s possession, including ledgers and communication records that could unravel the syndicate’s broader network.
The EOW’s swift action underscores a renewed push against deposit frauds plaguing India’s financial landscape. With the investigation ongoing, officials anticipate more arrests, including the Goa-based partners. Victims are urged to come forward with evidence to aid the probe, as the OPID Act empowers courts to attach assets and compensate depositors.
This bust serves as a stark reminder of the perils of high-yield investment lures. As one defrauded depositor lamented, “We trusted the returns; they trusted our greed.” For those eyeing quick riches, the message is clear: if it sounds too good to be true, it probably is.
