A police officer said they suspect large-scale unauthorised deposits were mobilised over several years through associated firms and investment schemes that promised high monthly returns. (Representative Image)The Belagavi police Friday arrested the prime accused in an alleged Rs 4,500-crore investment scam affecting thousands of depositors across north Karnataka.The arrest followed the registration of a First Information Report (FIR) against the prime accused, Shivanand Neelanavar, over illegal fund collection and cheating through an investment scheme that allegedly promised unusually high returns to depositors.According to investigators, the case centres around Neelanavar’s firm Shivam Associates, which is suspected to have mobilised deposits from nearly 40,000 to 45,000 people without mandatory approvals from financial regulators or the Reserve Bank of India (RBI).The police suspect that the organisation functioned in a Ponzi-style manner, where returns to earlier investors may have been paid using funds collected from new depositors.“Preliminary investigation indicates that crores of rupees were collected from the public without proper authorisation. We are examining the financial transactions, digital evidence, and possible violations of RBI norms,” a senior police officer said.The scam surfaced after several investors approached authorities, alleging delays in repayments and irregularities in the scheme. Following complaints, officials from the district administration, cooperation department, and revenue department initiated a preliminary inquiry, after which a case was registered at the Malamaruti police station.The police conducted searches over the last two days at multiple premises linked to the accused, including his residence, office, and apartment complex in Belagavi. During the raids, investigators reportedly seized bank records, bonds, laptops, mobile phones, and digital transaction data connected to the alleged operations.Story continues below this adNeelanavar was questioned extensively before being formally taken into custody. He is expected to be produced before a local court, and the police are likely to seek custody for further interrogation.Investigators said Neelanavar is originally from Hubballi and had earlier worked in small-scale jobs before allegedly entering the investment business. The police said he later launched an app-based investment platform and expanded his operations through social media campaigns, public outreach programs, and local influence networks.A police officer said they suspect large-scale unauthorised deposits were mobilised over several years through associated firms and investment schemes that promised high monthly returns. Investigators are also examining possible violations under the Karnataka Protection of Interest of Depositors (KPID) Act and the Banning of Unregulated Deposit Schemes (BUDS) Act.“We are verifying the extent of the financial network, investor exposure, and whether more individuals or firms were involved in the operations,” the officer added.