ED attaches assets worth Rs. 278 crores of Telengana based firm in Ponzi Scam

The Enforcement Directorate has attached assets worth Rs. 278 crore in connection with its money laundering probe in an alleged ponzi scam involving a Telangana-based multi-level marketing group.

The promoters of EBIZ.com Pvt. Ltd. fraudulently collected about Rs. 1,064 crore from around 12 lakh subscribers.

Residential plots, apartments, farm houses and commercial buildings located in Delhi and Noida and bank deposits in the accounts of Pawan Malhan and Anita Malhan, the main promoters of the firm EBIZ.COM Pvt Ltd, their family members and associates have been attached as part of a provisional order issued under the Prevention of Money Laundering Act (PMLA). The total value of the attachment is Rs. 277.97 crore and the assets include 29 immovable properties purchased at a cost of Rs. 34.60 crore and bank deposits amounting to Rs 242.25 crore lying in 124 accounts maintained in the name of the accused directors and the firm.

The modus operandi of the directors of the company was to propagate false promises of earning quick and easy money and inviting gullible public to become members of their pyramid scheme in the guise of direct selling multi-level marketing network by introducing worthless products like free computer education packages, suit lengths among others. The purpose of introducing sub-standard and over-priced products was only to masquerade their pyramid fraud as a direct-selling product company.

Further, in order to lure more innocent investors, they extensively advertised their commission model in which very high commissions were paid to existing members for enrolment of new members in the down links of the pyramid structure.

The funds collected from subscribers were “layered” into the personal accounts of family and close associates and then invested in movable and immovable properties in order to conceal them.

Currently Pawan Malhan and his son Hitik are under custody of the Telangana Police.