New Delhi/Bengaluru: The Enforcement Directorate on Friday said it has arrested two promoters of a multi-level marketing company in a money laundering case linked to the alleged diversion of depositors funds to the tune of Rs 1,500 crore.
C A Anzar and Abhilash Thomas, both residents of Bengaluru, and co-founders and owners of Indusviva multi-level marketing (MLM) pyramid scheme were arrested under sections of the Prevention of Money Laundering Act (PMLA) and produced before a special court in Ranga Reddy district of Telangana on Thursday.
The court sent them to judicial custody till December 30, the agency said in a statement.
The Enforcement Directorate (ED) filed a PMLA case based on an FIR of the Cyberabad police against the company and others.
”The company is into multi-level marketing scams having illegal pyramid type structure and is working under the guise of direct selling business.
”The company engaged a large number of distributors and did rigorous marketing about the commission schemes of the company stating that there is a great opportunity of quick and easy money by becoming a member and then, in turn, making further enrollments under one’s downline in a binary manner,” the ED said.
In order to project their ”fraud” scheme as a legitimate business, it said, they introduced some products, which were, by their own admission valued at only 20 percent of the sale revenue and in reality were ”completely worthless”.
”The membership fee paid by new clients was used to pay commission to old clients. By giving false promises and inducements, the company enrolled about 10 lakh members and collected around Rs 1,500 crore since its inception,” the statement said.
The probe found that ”C A Anzar and Abhilash Thomas floated subsidiary companies in Indusviva Group and diverted the funds to these entities and also blatantly siphoned off the collected funds into their personal accounts”. ”The diverted funds were used to acquire properties/assets in the name of individuals and companies,” it said.