By the people, for the scam: Inside a digital wallet app's Rs 1,200-crore scam

Amreli Police uncovered an alleged Rs 1,211-crore SD Pay fraud spanning the country. The probe shows how investors became recruiters through a 15-tier referral network.

In Short

• One Gujarat teacher invested proceeds from selling her one-bedroom flat
• Her apparent returns encouraged relatives and acquaintances to join the app
• Police say declining inflows prompted blocked withdrawals and share offers

A digital wallet app that promised attractive returns allegedly turned its own investors into a recruitment network, drawing in friends, relatives and colleagues through a 15-tier referral system. By the time the operation unravelled, the alleged SD Pay scam had affected 6.52 lakh people across 36 states and Union Territories, with investigators estimating that around Rs 1,211 crore had been collected.

The scale of the alleged fraud emerged after a two-month investigation by Amreli Police in Gujarat. Investigators found that SD Pay, which was presented as a digital wallet, was allegedly being used to run a multi-level marketing operation. People were encouraged to invest money in the app and bring in more members, with the promise of a 9% monthly cashback on their wallet balance.

The model relied heavily on existing investors to attract new ones. As people joined, they were encouraged to build their own referral networks, bringing in family members, friends and acquaintances. The growing network helped the operation reach people across the country, while the returns displayed on the app gave investors confidence to put in more money and persuade others to do the same.

The experience of a teacher from Gujarat, who invested Rs 9.5 lakh and went on to bring dozens of people into the network, illustrates how the alleged scheme spread through personal relationships.

HOW A TEACHER BECAME A RECRUITER

The teacher, who is raising her college-going son on her own, was initially reluctant to put her money into SD Pay. In 2025, she had sold her one-bedroom flat and had Rs 9.5 lakh from the sale. People associated with the app approached her with documents and showed her an escrow wallet to convince her that the money would be safe.

One person also gave her a signed blank cheque, assuring her that she could withdraw her money whenever she wanted and would get her investment back. The assurances eventually persuaded her to invest.

She initially received what appeared to be good returns. As the money in her digital wallet grew, she began sharing her experience on social media, expressing happiness with the returns. That post encouraged people she knew, including relatives and acquaintances, to join the app.

Over time, 31 people invested through her network. This included 11 members of her family and 20 associates. Among the family members were her widowed sister, her mother, who is over 70, and her brother.

The teacher said around 800 people eventually joined through her referral network. She also claimed that there were days when she earned as much as Rs 25,000 through interest and referral cashback. The money appearing in her account and the returns she said she received reinforced her belief that the investment was safe and profitable.

By the middle of 2026, her digital wallet showed a balance of around Rs 50 lakh. But that figure remained on the screen. After the app shut down, she was unable to withdraw the money.

Her experience points to one of the central features of the alleged operation: investors were not merely customers. They became the channel through which the app reached new investors. A person who had seen money credited to their account could use that experience to convince others to join, extending the network through relationships built on personal trust.

THE 15-TIER REFERRAL NETWORK

According to police, SD Pay was essentially a multi-level marketing scheme presented as a digital wallet application. The app was downloaded nearly 1.5 million times, while more than 6.52 lakh people invested in it.

The promise of 9% cashback on wallet balances was used to attract investors. The referral structure had 15 levels, allowing people who joined the app to bring in more members and earn benefits through the network.

This meant that the operation did not depend only on direct advertising or outreach by the people running it. Existing investors helped expand it by bringing in people they knew. The teacher's account shows how quickly this could spread: her initial investment was followed by investments from family members and associates, while she said her wider referral network eventually included around 800 people.

Police allege that the people running the operation used money coming into the system to sustain payments to existing investors. As long as fresh money continued to enter, the returns displayed to investors helped maintain confidence and encouraged further recruitment.

The scale of the network was initially not clear to investigators. Police first estimated that around Rs 635 crore had been collected from approximately 3.15 lakh people. The investigation later uncovered a much larger operation.

HOW THE ALLEGED SCAM BEGAN TO UNRAVEL

According to police, the inflow of money began to decline around March 2026 as fewer new investors joined. This made it increasingly difficult to pay returns to existing investors.

Instead of returning the money, the accused allegedly began blocking withdrawals and offering company shares to investors. They also claimed that the company would soon launch an initial public offering (IPO), suggesting that the value of the shares could rise after listing.

For investors who had been shown growing balances on the app, the promise of shares and a future IPO offered another reason to wait rather than demand an immediate withdrawal. But the money displayed in their digital wallets was no longer accessible.

The teacher's account reflects the gap between the balance shown on the app and the money investors could actually access. Despite seeing around Rs 50 lakh in her wallet, she could not withdraw it after the app shut down.

Police allege that funds were transferred to accounts linked to shell companies and that withdrawals were blocked as the operation came under pressure.

HOW POLICE UNCOVERED THE SCALE

Amreli Police initially estimated that the alleged operation had collected around Rs 635 crore from 3.15 lakh investors. However, investigators later managed to break the password of a system allegedly used by the accused and access data that revealed a much larger network.

The data helped investigators raise the estimated number of affected investors to 6.52 lakh and the amount involved to around Rs 1,211 crore.

During the two-month investigation, police recorded statements from around 900 people. More than 800 complaints were also received through the national cybercrime helpline 1930, according to the reporter's information.

The investigation found that the network extended beyond Gujarat. While the operation was initially believed to be concentrated in Gujarat, Rajasthan and Maharashtra, investigators found links to Karnataka, Bihar and Uttar Pradesh as well. Police are examining the network's operations, transactions and the people involved in these states.

The alleged operation also appears to have been shifted to another name. Police said the main accused, Dhaval Patel and Narendra Solanki, moved operations to Maharashtra under the name Apna Pay. The work was reportedly assigned to Narendra Kangre, who has also been charged and is absconding. A lookout circular has been issued against him and he has been placed on a no-fly list.

So far, 12 accused have been arrested, including Dhaval Patel, Santosh Pathak and Narendra Solanki. Solanki had earlier worked at a UPI-based company.

INVESTORS LEFT WITH BALANCES THEY COULD NOT WITHDRAW

The alleged SD Pay operation spread by turning investors into its sales network. People who believed they were earning returns encouraged others to join, often relying on the trust they had built with family members, friends and colleagues.

For the teacher, that trust extended from the people who first persuaded her to invest to the relatives and acquaintances who followed her into the app. The returns she said she received and the balance displayed on her wallet helped sustain that confidence. But when withdrawals stopped, the same network left a large number of people facing losses.

The investigation has estimated that around 6.52 lakh people were affected and that the amount involved was approximately Rs 1,211 crore. Police are continuing to investigate the transactions and the wider network across states.

- Ends