Shailesh Bhatt was the complainant in the ₹155 crore extortion

In a new twist in the country’s first case of extortion of crypto currency, the Gujarat Criminal Investigation Department (CID) has booked a Surat-based builder for allegedly extorting over ₹155 crore in cash and bitcoins from two persons.

Earlier, the builder and realtor, Shailesh Bhatt, was the complainant in a bitcoin extortion case in which bitcoins worth ₹9 crore were extorted from him by Amreli polic. The police have arrested Amreli Superintendent of Police (SP) Jagdish Patel while a former BJP legislator Nalin Kotadia is on the run.

In his complaint, Bhatt had alleged that some Amreli policemen extorted "bitcoins worth ₹9 crore" from him four months back when he was abducted and beaten by the cops.

“While probing the case, we learnt that Bhatt was an extortionist, as he had extorted bitcoins worth ₹155 crore from others before he himself became a victim, when he was kidnapped by the Amreli police,” CID (Crime) chief Ashish Bhatia told newsmen on Monday when he announced lodging a new case to book the complainant and others.

"Around two years back, one Satish Kumbhani of Surat floated a company called 'Bit Connect' and lured people like Bhatt to invest in it to get huge returns in short time. Bhatt had invested ₹2 crore in it. However, its promoters shut shop in January this year and went underground," said Mr. Bhatia.

To recover his investment, Bhatt's accomplices first kidnapped Piyush Savalia by posing as Income Tax officials, as Mr. Savalia used to work for that company. Mr. Savalia was confined in a farm house at gun-point for three days in January-end.

"On February 1, Bhatt's men kidnapped Dhaval Mavani at gun-point, as the latter was also attached with the bankrupt firm. Bhatt's accomplices forced Mavani to transfer 2,256 bitcoins worth ₹131 crore into their account. The builder and his accomplices had also transferred another 166 bitcoins worth ₹9.64 crore into their account," Mr. Bhatia said, sharing details of how Bhatt and his aides were running an underworld type extortion racket in Surat where people turned to virtual currencies to convert their black money during and after demonetisation.

To set Mr. Mavani free, Bhatt and his accomplices also extorted ₹14.50 crore cash, which the builder received through the 'Angadia' service (an unofficial cash courier service), he said.

"Bhatt and his accomplices extorted bitcoins and cash worth a total of ₹155.21 crore. Later, they distributed the bitcoins among themselves. Bhatt had kept around 700 bitcoins," the CID official said.

“Since Shailesh Bhatt is not tech-savvy, he took help of his nephew Nikunj Bhatt to transfer these bitcoins into his victual wallet.” The CID (crime) has arrested Nikunj Bhatt.

The entire conspiracy was unearthed when Savalia was questioned by the CID recently after the arrest of Amreli SP and Police Inspector Anant Patel and Bhatt’s business partner Kirit Paladia.

Mr. Bhatia added that the bitcoin extortion racket is set to get bigger as more people who invested in the hope of making quick bucks became victims of organised racket.

“When we started probe, Shailesh Bhatt even paid ₹34.50 lakh to Piyush Savalia to keep mum and give a false statement that he was never kidnapped by Bhatt and his aides,” said Mr. Bhatia.

While two persons, including Bhatt's nephew, have already been arrested on charges of kidnapping and extortion, a search is on for others including Bhatt in the new case while former legislator in the original case.