New Delhi, Mar 12 (UNI) Enforcement Directorate (ED) has filed a Prosecution Complaint on Friday before the PMLA Special Court, Hyderabad against Multi- level Marketing fraud perpetrated by Ebiz com Private Limited, its Managing Director Pawan Malhan and 26 others accused.
The central financial agency initiated investigation on the basis of the FIRs registered by the Telangana State Police against EBIZ.COM Pvt Ltd and its directors, associates for cheating common public by propagating a pyramid scheme and luring gullible public through false hope of earning quick and easy money.
The said company was running a 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), cheap suit lengths for name sake in nature.
"The company and its directors 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 and 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”, the officials in the probe agency said.
In a bid to attract more gullible customers, the company’s officials used to advertise the scheme through social media platforms like Facebook pages and others and the enrollment fee paid by new members was used to pay commission to older members”, they added.
“Investigation under revealed that funds were fraudulently collected from the subscribers as membership deposit through a chain of agents spread across India and 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”, the probe agency officials.
Earlier in 2019, ED had already provisionally attached various movable and immovable properties worth around Rs 277.97 crore of Pawan Malhan, his son Hitik Malhan and others which has been duly confirmed by the Adjudicating Authority and ED has taken possession of those assets, the ED officials said, adding that further investigation under has been in progress.
UNI AKS PS2058