ED arrests 3 promoters of Agri Gold Group of Companies in ponzi scheme fraud case
Dec 23, 2020
New Delhi [India], December 23 : The Enforcement Directorate (ED) on Wednesday said that it has arrested three promoters of the Agri Gold Group of Companies in a Ponzi Scheme Fraud Case worth Rs 6,380 crore.
The accused has been identified as Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao, Avva Hema Sundara Vara Prasad who are the "main accused in the Prevention of Money Laundering Act (PMLA) investigation into Rs 6,380 crore Agri Gold Ponzi Scam".
The accused were produced before the ED PMLA Court, Hyderabad which has granted 14 days of judicial custody to all the 3 accused, ED said in a statement.
ED has initiated an investigation based on multiple FIRs lodged in the States of Andhra Pradesh, Telangana, and Karnataka.
"The scam was perpetrated by Avva Venkata Rama Rao through Agri Gold Group of Companies. Avva Venkata Rama Rao had earlier worked in the Golden Forest CIS Fraud scheme. Having learnt the tricks of the trade in that scheme, he hatched a well-planned conspiracy and along with his seven brothers and other associates setting up more than 150 companies and started collecting deposits from the general public with a promise of providing developed plots/farm lands OR withdrawal at a high rate of return on maturity/pre-term," ED said.
Thousands of commission agents were engaged to lure people with various schemes for hefty commission and managed to collect Rs 6,380 crore from 32,02,628 such investor accounts, ED said.
"In the end, the gullible investors neither got plots nor could recover their deposits," ED said.
According to ED, the modus operandi of the scheme of the Agri Gold Group Companies was that, they would lure the gullible public to join as depositors in their schemes and encourage them to pay the desired deposits either directly or through the agents under the pretext of real estate deal.
"These companies did not mention either the actual market value of the land or its location or its boundaries or survey numbers or the permissions required to be obtained for the layouts from the concerned authorities and the said company did not obtain permission from RBI to collect such deposits. Securities and Exchange Board of India (SEBI) has also asked the company to stop taking further deposits and return the money to the depositors but the accused persons, instead of complying with the directions, opened new companies and started collecting deposits in the names of new companies on the pretext of real estate business with the help of an army of commission agents, thus, turning this into a ponzi scam," ED said.
Although the accused "collected deposits from 32 lakh investors, they never developed lands sufficient to give plots to all the investors."
"Even by their unverified claims, in the end, they had only 5.5 lakh plots available with them," ED added.
Further investigation is underway, ED said.
