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HindustanTimes Sun,21 Sep 2014

Two convicted in Rs. 21-cr small savings racket

Shailee Dogra , Hindustan Times  Chandigarh: , April 22, 2014
First Published: 10:58 IST(22/4/2014) | Last Updated: 11:00 IST(22/4/2014)

A decade after being charged with operating a money circulation scheme, chief judicial magistrate Anubhav Sharma convicted the two directors of Hamara Fortune Sales Network Pvt Ltd, Sector 34, under the Prize Chit & Money Circulation Scheme (Banning) Act, 1978.

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The defendants were also fined Rs. 2,500 each. The court convicted the two -— Ajay Patel, a resident of Sector 38 West, and Ashish Mahajan, a resident of Sector 70, SAS Nagar — on April 16, with a copy of the order made available on Monday. The police had booked them on September 22, 2004 under sections 406, 420 & 120B of the IPC but later failed to substantiate charges.

The case

Prosecution claimed that the the police was tipped off by an anonymous caller in September 2004 t hat an outfit based in Sector 34, Chandigarh was collecting funds from the public by “misleading them about getting high returns.”

The police alleged the firm, Hamara Fortune Sales Network Pvt Ltd, was incorporated on April 20, 2001, with the object of “manufacturing and marketing consumer goods through multilevel marketing” but were in fact selling commission based incentive plans.

The modus operandi

The prosecution claimed the company used to arrange meetings at which gullible customers were lured into entering a “chain system” by becoming a member after depositing Rs. 1,500 with the firm and then enrolling two new members who would also be require to make the deposit and so on.

The prosecution said the company claimed if the chain continued the member would earn lakhs of rupees in a week but if any member failed to enroll two new members, his deposit would be forfeited.

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