The Enforcement Directorate (ED) said on Thursday that it has attached assets worth Rs 31.63 crore of eBiz.com and its directors in a pyramid style, multi-level marketing fraud case.
An ED official said that the assets have been attached under the provisions of Prevention of Money Laundering Act (PMLA), which includes interest accrued on the already attached 105 fixed deposits, bank balances, mutual funds and gold jewelry found in the locker of the main accused Pawan Malhan, Managing Director of eBiz.com Pvt Ltd, and his son Hitik Malhan.
The official said that on September 17, 2019, the ED had provisionally attached immovable properties purchased at Rs 34.60 crore and bank balances amounting to Rs 242.25 crore lying in 124 different bank accounts belonging to eBiz.com and its promoters.
The ED registered a case of money laundering on the basis of the FIRs registered by Telangana Police against eBiz.com and its directors or associates for cheating the common public by propagating false promises of earning quick and easy money and inviting gullible people to become members of their pyramid scheme.
The official said that the probe by ED revealed that they were running a pyramid fraud in the guise of direct selling multi-level marketing network by introducing a few worthless products like CDs containing free computer education packages, suit lengths etc.
The purpose of introducing such sub-standard over-priced products was only to masquerade their pyramid fraud as a direct-selling product company, the official said.
To lure more gullible investors, they extensively advertised their commission model in which exceedingly high commissions were paid to the existing members for enrollment of new members in the down links of the pyramid structure.
The promoters conducted mega conventions and flaunted their lavish lifestyle and used social media like Facebook pages to lure gullible investors.
The official said that the ED had collected around Rs 1,064 crore from about 12 lakh subscribers through a chain of agents spread across the country.
“The funds so collected were illegally diverted into the personal accounts of the directors, their family members and other associates under various expenditure heads, including dividends, high salaries/incentives etc.,” the official said.
The agency had already filed a chargesheet against the accused persons on March 12 this year.
“The second attachment order is issued now to attach further assets worth Rs 30.42 crore lying in 105 accounts maintained in the name of the company, its two directors and their family members and associates, Rs 64.94 lakh worth of mutual fund investments and Rs 55.74 lakh worth of gold jewelry,” the official added.