ED arrests two persons in connection with multi-level marketing scam
Dec 17, 2021
New Delhi [India], December 17 : The Enforcement Directorate (ED) arrested two persons who are owners and co-founders of the Indus Viva MLM Pyramid Scheme under the Prevention of Money Laundering Act (PMLA), 2002 in connection with a multi-level marketing scam worth Rs 1,500 crores.
As per the press release by ED, the accused have been identified as CA Anzar and Abhilash Thomas, both are residents of Bengaluru.
"ED initiated an investigation based on FIR No. 124/2021 registered by Gachibowli Police Station, Cyberabad. The company is into multi-level marketing scam having illegal pyramid type structure and is working under the guise of Direct Selling Business," reads the release.
"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 & easy money by becoming a member and then, in turn, making further enrollments under one's downline in the right side and left side in a binary manner."
"In order to protect their fraud pyramid scheme as a legitimate business, they introduced some products which were by their own admission valued at only 20 per cent of the sale revenue and in reality are completely worthless. The membership fee paid by new clients is used to pay commission to old clients. By giving false promises and inducements, the company enrolled around 10 lac members and collected around Rs. 1,500 crores since its inception," added ED in its release.
During the investigation under PMLA, it was noticed that CA Anzar and Abhilash Thomas floated subsidiary companies in Indus Viva 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, the ED said.
"The accused were produced before the PMLA Special Court, Rangareddy, and have been remanded to 14 days of judicial custody from December 16 to December 30," the release added.
Further investigation is in progress.
