Hyderabad: The Enforcement Directorate (ED) on Friday filed a prosecution complaint before the PMLA special court against MLM pyramid fraud perpetrated by Ebiz.com Private Limited, its Managing Director Pawan Malhan and 26 other accused.
The ED initiated investigation on the basis of the FIRs registered by the Telangana police against the company and its Directors/Associates for cheating public by propagating a pyramid scheme and luring them through false hope of earning quick and easy money.
An ED release said they were running the scheme in the guise of direct selling multi-level marketing business for sale of worthless products like computer education packages, which were downloaded freely from internet, suit lengths etc. These products were name sake in nature. The primary purpose for which the members were joining the scheme was to get commission from enrollments and not for the products. They extensively advertised their commission model in which very high commissions were paid to sponsoring members for enrollment of new members in their down link of the pyramid.
They used to hold large conventions in which top rung members of this pyramid scheme would give lofty speeches and display their new found wealth earned from commissions and encourage thousands more to join this scheme. They used to advertise the scheme through social media platforms. The enrollment fee paid by new members was used to pay commission to older members. The balance was being siphoned off by the Malhan family.
Investigation under PMLA revealed that funds were fraudulently collected from the subscribers as membership deposit through a chain of agents spread across India. These deposits so collected were illegally diverted into the personal accounts of the directors, their family members and other associates under various heads – dividend, salaries/incentives and were utilized to purchase properties for themselves or their relatives.
In 2019, the ED had already provisionally attached various movable and immovable properties worth around Rs 277.97 crore of Malhan, his son Hitik Malhan and others. The provisional attachment has been confirmed by the PMLA Adjudicating Authority and ED has taken possession of those assets.
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