Torres scam: CEO says he blew the lid off the fraud and even alerted the police

Investors gather outside the Torres Jewellery store in Dadar. Pic/Ashish Raje

Tausif Reyaz, a wanted accused in the Rs 1,000-crore alleged Torres scam and former CEO of the company, claims to be a whistleblower. He asserts he alerted the agencies concerned on January 4, submitting detailed documents and evidence exposing the ongoing fraud as soon as he discovered it.

Following the arrest of three individuals by the Shivaji Park police, an 182-page whistleblower report surfaced, alleging that the fraud was orchestrated by the same people behind the 2019 Ukraine and Russia B2B jewellery scam. The case has now been transferred to the Economic Offences Wing (EOW) of the Mumbai police for further investigation.

Valentina Ganesh Kumari and Taniya Xasatova alias Tazagul Khasatova were arrested by the police on Tuesday. Pics/Ashish Raje

The EOW has reportedly taken note of the documents Reyaz claims to have shared with multiple agencies. The police are estimating the scam to be worth R1,000 crore based on the number of investors.

Threat to life

Reyaz, in documents shared with agencies, claimed his life is under threat due to his efforts to expose the case. In a letter sent to the authorities, he alleged that Torres operates a Ponzi scheme under the guise of a jewellery business, involving financial irregularities such as tax evasion, excessive cash expenditures, and potential money laundering in Torres scam. He stated that the scheme mirrors the fraudulent practices of B2B Jewellery (Ukraine) and Cancri Jewellery (Turkey), run by the same individuals. Reyaz has urged immediate intervention by tax, financial, and law enforcement authorities to protect customers and prevent further economic harm.

Sarvesh Surve the company director arrested by the cops

According to Reyaz's purported letter, currently under examination by agencies and shared with mid-day by his legal team (who have chosen to remain anonymous), he detailed the scam's operations. Reyaz also provided a letter written by Sarvesh Surve, a director of the company and one of the accused arrested by the Shivaji Park police. Reyaz claimed that Surve also flagged the fraud to relevant agencies and sent a letter to the prime minister, highlighting the scheme.

Reyaz's letter alleges: "Torres, operating under Platinum Hern Private Limited, exhibits all the characteristics of a Ponzi and pyramid scheme disguised as a jewellery business. With unsustainable cashback rates, inflated product prices, and referral commissions, the business is financially untenable."

Foreigners used fake IDs

Reyaz further claimed that foreign nationals associated with Torres acquired Indian mobile numbers using fake IDs. These SIM cards were reportedly procured through brokers for Rs 12,500 each and sourced from the Nepal border to evade detection.

The letter to the PMO by Surve, which Reyaz attached to his own submissions, stated that the company was incorporated in India on April 7, 2023. Surve, a director since the company's inception, claimed that a Ukrainian national, Olena Stoian, was also appointed as a director. Surve wrote, "I was informed that the company would operate in the retail jewellery business in India and was assured opportunities to secure a foreign visa and employment. Based on these representations, I became a director and shareholder."

In the letter dated January 2, Surve explained that the company launched its first jewellery showroom in Mumbai's Dadar area under the brand name "Torres." However, he claimed that despite holding the position of director, he was never involved in showroom operations.

Public money used

According to Surve's complaint, the company began accepting money from the public by promising high bonuses, cashback, and returns ranging from 200 per cent to 600 per cent. Customers were given low-quality moissanite stones instead of genuine jewellery. He also alleged that the company engaged in fake loan transactions totalling R13.76 crore. These transactions were reportedly facilitated by Lallan Singh, who accepted cash brought into India via USDT (Tether).

Surve further stated that on December 27, he was summoned to the company's Lower Parel office. "During this visit, I met Ms Tazagul Khasatova and another foreign national, Mr Danish, who pressured me to sign several documents, including management certificates and loan agreements with backdated entries on old stamp papers," he wrote. "When I refused to sign the agreements, I was shouted at, threatened with dire consequences, and told I would be killed by being hit by a car. Ms Tazagul Khasatova was present and involved in these threats."

The complaint also alleges that the company illegally imported over 75 kg of silver and 25 kg of gold from Turkey to India. Surve claimed that the gold was delivered to a juice shop in Kalbadevi and that he possesses photographs of the smuggled gold as evidence.

The accused whistleblower alleged that the Torres scam operated similarly to fraudulent schemes in Ukraine and Turkey. The complaint letter included media reports on the B2B Jewellery scam in these countries, drawing parallels to Torres' operations.

Discrepancies highlighted

The whistleblower alleged that Torres had established six jewellery showrooms in Mumbai and Navi Mumbai and claimed to have 60,000 customers. The estimated investment for setting up these showrooms was at least R40 crore. However, the company reportedly spent over R25 crore in cash, raising questions about the source of these funds. Platinum Hern Private Limited, under which Torres operates, has a paid-up capital of only R1 lakh, with no evidence of external investments or foreign funding.

The prices of products were heavily inflated. Moissanite stones, which have a market price of R300, were sold for R9,000, representing a mark-up of 3,000 times. Gold rings, typically valued at Rs 39,000, were sold for Rs 4,50,000. Customers received low-quality moissanite stones and jewellery at these inflated prices, justifying artificially high cashback payouts.

The letter also stated that Torres Jewellery conducted daily conferences at its showrooms, attended by at least 300 individuals. During these sessions, speakers explained how participants could purportedly earn money through the company by following specific processes.

B2B jewellery scam

The whistleblower's letter compared Torres's operations to those of B2B Jewellery, a company that defrauded over 600,000 investors of approximately $250 million across Ukraine, Russia, and Kazakhstan. Established in 2019, B2B Jewellery presented itself as a retailer but operated a massive Ponzi scheme through its network of retail stores and online platforms.

Arrests and investigation

The Shivaji Park police have arrested three individuals, including two foreign nationals, identified as Valentina Ganesh Kumari, 44, a Russian origin OCI national, and Taniya Xasatova alias Tazagul Khasatova an Uzbekistan national who was working as general manager. The case has since been transferred to the Economic Offences Wing (EOW). A senior EOW officer stated, "We have received the files, and further investigations are underway. We are also examining the details shared by the whistleblower in the case."

One Victoria Kovalenko, a Ukrainian national, has also been named in the FIR and is suspected to have fled the country. She is believed to be a key member of the fraud. The whistleblower has additionally named Olena Stoian, also a Ukrainian national, claiming she is the mastermind behind the fraud. Stoian was allegedly involved in the Ukraine B2B jewellery scam as well.