Ponzi case: Investment firm diverted public’s money to group firms for creating assets, says ED

The company never allegedly had enough land but still kept on collecting deposits from newer members. The investments received from newer members were used to pay commissions allegedly to the agents and the scheme was unsustainable and bound to collapse, according to the ED

MUMBAI: A money laundering probe by the Enforcement Directorate (ED) into alleged cheating cases registered against the investment firm Akshaya gold Farms and Villas India Limited revealed that the investments received from the public from across 10 states in the country were allegedly diverted to the promoter’s group companies, utilised for the creation of assets for them and their relatives and were also illegally withdrawn by a few directors.

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The agency has so far attached immovable assets, which were allegedly the proceeds of crime in the case, worth over ₹268 crore in Maharashtra, Andhra Pradesh, and Telangana, sources said. “The funds’ trail’s investigation revealed that the money collected from the public was diverted and utilised for investment into group companies of promoters and other companies owned by the family members, for purchase of personal properties by the directors in their personal / benami / family member’s names, and also illegally withdrawn by the directors in the form of commission, among others,” a source said.

The company never allegedly had enough land but still kept on collecting deposits from newer members. The investments received from newer members were used to pay commissions allegedly to the agents and the scheme was unsustainable and bound to collapse, according to the ED.

ED’s probe revealed that the accused had allegedly collected deposits from 19.17 lakh gullible investors spread across 10 states in the country and collected a total of ₹857 crore via their illegal schemes. Out of the collected amount, the firm had allegedly failed to return nearly ₹384 crore to the customers, which is the total proceeds of crime in this case.

ED’s probe revealed that the firm had allegedly cheated the public by collecting deposits without any legal permission from the Reserve Bank of India (RBI) and the market regulator, Securities and Exchange Board of India (SEBI). The firm allegedly collected investments from lakhs of investors who were encouraged to join by the agents, who were given a handsome commission to enrol new clients, and a hierarchy of agents was created in a pyramidal manner to earn high commissions, according to the agency.

Investors were lured into investing their life savings by promising sites in advertised real estate ventures and offering a high rate of return in various deposit schemes (weekly, monthly, and lump sum), according to the agency. The agency recently submitted its chargesheet in the case against the firm and its promoters/directors in the ponzi scam case in a special court in Visakhapatnam, Andhra Pradesh.