ED conducts raids on Kerala-based ponzi company defrauding depositors of Rs 1,500 Crore
- In Reports
- 01:07 PM, Jun 15, 2024
- Myind Staff
The Enforcement Directorate conducted raids at several sites across different states in connection with a money laundering probe involving a Kerala-based firm accused of defrauding depositors of Rs 1,500 crore through a ponzi scheme.
ED launched searches on June 11 at premises belonging to the promoters of HighRich Online Group located in Kerala, Maharashtra, and Chhattisgarh. The money laundering investigation originated from multiple First Information Reports (FIRs) filed by the Kerala Police.
According to a statement by the central agency, the searches resulted in the freezing of approximately Rs 32 crore in proceeds of crime across various bank accounts linked to the company, its promoters, and their family members. Additionally, authorities seized about Rs 70 lakh in cash, jewellery, and four vehicles.
ED disclosed that the searches also uncovered immovable properties valued at Rs 15 crore belonging to the promoters and senior members of the HighRich Online Group, allegedly acquired through proceeds of crime.
Furthermore, the investigation revealed that the company, along with its promoters and leaders, engaged in cryptocurrency trading on several exchanges and marketed their own digital currency named HR Crypto Coin.
ED claimed that the HR Crypto Coin was utilised in a ponzi scheme, where investors were enticed to invest their money with promises of a 15 per cent annual interest rate. Additionally, customers were offered a 30 per cent direct referral income for introducing new investors.
According to the agency, the company marketed memberships through digital IDs, which included user credentials (username and password) enabling access to their website, www.highrich.net. Members were encouraged to sell these memberships or digital IDs to others in order to earn commissions.
The ED further alleged that the cryptocurrency was exchanged for Indian rupees and USDT, a type of digital currency, as part of the scheme. The investigation aims to uncover the full extent of financial irregularities and illicit activities associated with the HighRich Online Group.
ED disclosed that the company incentivised individuals to recruit new members into their marketing scheme, wherein commissions earned from new member sign-ups were shared as incentives. According to the agency, there was no genuine underlying business involving the sale of goods, indicating a typical Ponzi scheme operation.
The ED further stated that the total amount amassed from participants in this Ponzi-type Multi-Level Marketing (MLM) scheme amounted to approximately Rs 1,500 crore. The collected funds were reportedly redistributed as rewards to scheme members positioned at the top of the pyramid structure.
Moreover, the agency alleged that the promoters of the company, namely K D Prathapan and Sreena Prathapan, along with their family members and various entities, siphoned off profits amounting to around Rs 250 crore. The investigation continues to uncover the full extent of financial misconduct and the involvement of those responsible.
Image source: ANI
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