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Five held in Rs14.53-crore pyramid scheme case
The economic offences wing (EOW) of the Navi Mumbai crime branch busted a multilevel marketing firm and arrested five persons in connection with a cheating case
The economic offences wing (EOW) of the Navi Mumbai crime branch busted a multilevel marketing firm and arrested five persons in connection with a cheating case of Rs14.53 crore. The firm Capital Club Traders was operating out of Vashi since July and had enrolled 4,841 people in their pyramid scheme.
The EOW Unit 1 raided the firm’s office space at Realtech Park building in Vashi where they had set up shop four months ago. Police said the firm lured people with promises of 2 to 30 grams of gold and 4 to 60 grams of silver along with 3% interest on their invested amount in 52 weeks.
The scheme accepted investments starting from Rs15,500 and going as high as Rs2.32 lakh. The firm promoted their schemes through text messages and even set up two websites, where new investors would register and create a user ID and login.
The firm further enticed investors into expanding their pyramid scheme by offering 1% sales bonus and 2% binary income every day for 20 weeks towards the investment amount of every new investor that they bring. The firm had accumulated Rs14.53 crore which they claimed to invest in share market and foreign exchange trading, said police.
The crime branch also seized three bank accounts registered at IDFC Bank, Kharghar; IDBI Bank, Koparkhairane, and another ICICI account which the firm used for their financial transactions, said officers.
Of the five arrested, the agency established that Ganesh Shinde was the director of the firm while others, identified as Abhijit Jadhav, Samadhan Chinchole, Sanjay Gaware and Baban Sadar, worked as agents. During preliminary interrogation, the accused admitted that they did not have permission from either the government of India or the Reserve Bank of India to establish the firm.
The accused have been booked under sections of Indian Penal Code for cheating along with relevant sections of Prize, Chits and Money Circulation Scheme (Banning) Act, 1978and IT act.
“We took action against the pyramid scheme company following commissioner and joint commissioner’s orders to zero down on such fraudulent practices in the city. Currently another person identified as Ravi Chaudhary is at large,” said Ajay Kadam, assistant commissioner of police, crime.
In a public advisory, Navi Mumbai police commissioner Sanjay Kumar said, “Citizens must remain aware of such companies promising more than considerable returns by investing money. By alerting the police of such suspicious schemes, citizens are requested to assist the police in preventing others from being cheated.
