Agri-Gold promoters diverted funds to off-shore entities: ED

The promoters’ names also figured in Paradise Leaks and they had incorporated companies with the help of Mossack Fonsenca in Cayman Islands, according to an ED press release

Hyderabad: The three Agri Gold Group of Companies promoters – Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao and Avva Hema Sundara Vara Prasad, who were arrested in connection with Rs.6,380 crore Agri-Gold Ponzi scam on Wednesday, set up companies abroad and diverted large amounts of funds to off-shore entities, Enforcement Directorate (ED) said.

The promoters’ names also figured in Paradise Leaks and they had incorporated companies with the help of Mossack Fonsenca in Cayman Islands, according to an ED press release. The ED produced the three arrested persons before the Prevention of Money Laundering Act (PMLA) court, which granted 14 days of judicial custody.

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ED has initiated investigation based on multiple FIRs lodged in Telangana, Andhra Pradesh and Karnataka. The scam was perpetrated by Rama Rao through Agri Gold Group of Companies. Rama Rao had earlier worked in the Golden Forest CIS fraud scheme.

Having learnt the tricks of the trade in that scheme, he hatched a conspiracy with his seven brothers and other associates to set up more than 150 companies and started collecting deposits from general public with a promise of providing developed plots/farm lands or withdrawal at a high rate of return on maturity/pre-term.

Thousands of commission agents were engaged to lure people with various schemes for hefty commission and managed to collect Rs.6,380 crore from 32,02,628 such investor accounts. In the end, the gullible investors neither got plots nor could recover their deposits. The group collected deposits illegally from across the country.

Although the accused collected deposits from 32 lakh investors, they never developed lands sufficient to give plots to all the investors. Even by their unverified claims, at the end they had only 5.5 lakh plots available with them, the press release said.

Rama Rao and his family went on a siphoning spree and illegally diverted the public deposits and invested in myriad verticals and in private companies which were directly owned by their family.

Earlier, searches were conducted at the residences of Rama Rao and other directors including the residences of auditors at Vijayawada and Hyderabad. Various property related documents, Rs. 22 lakh, digital devices and other documents were seized.

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