Rewind 2018: Illegal schemes busted, conmen fell flat

The modus operandi was simple they used a binary scheme where one person has to enrol two persons each.

Hyderabad: Money swindling companies and chit fund scamsters duping the people of crores in 2018. The famous frauds include the Heera Group of Nowhera Shaikh, the Rs 60-crore Rishabh chit fund and fraudulent multi-level marketing schemes..

In one of the major arrests, a marketing fraud was unearthed by the Economic Offences Wing of Cyberabad police after the New Delhi-registered Money Level Marketing money circulation scheme duped victims to the tune of more than Rs 1,200 crore. Police arrested the head, a Class VII drop out, and his associate and seized Rs 200 crore from them.

“Radhe Shyam, the chief managing director of Future Maker Life Care Global Marketing Pvt Ltd, discontinued his education after Class VII. He was arrested along with his associate distributor Surender Singh,” Cyberabad police Commissioner V.C. Sajjanar said.

The modus operandi was simple they used a binary scheme where one person has to enrol two persons each. These two persons have to enrol two more persons each and the chain continues. According to state CID officials, these companies usually target people from the middle and lower middle classes. They use different tactics to publicise the scheme, attract, and convince the victims that the company is authentic and that investors will get higher returns.

While this is so, there was some light at the end of the tunnel for the victims of the AgriGold scam that was unearthed in 2014 in which about 32 lakh people in many states, including Telangana state, Andhra Pradesh, Tamil Nadu and Karnataka were duped of Rs 6,380 crore. Andhra Pradesh leads the list with 19 lakh depositors.

The company lured several lakh customers on the promise that their investment would come back to them with higher returns. Several ‘agents’ were also sent out to convince people to invest in the group of companies. The company allegedly took this money and invested heavily in real estate, before branching out to other areas as well, and finally duped the customers.

In March this year, Andhra Pradesh Chief Minister N. Chandrababu Naidu distributed cheques worth Rs 5 lakh to each of the families of those who lost their lives due to the scam. The High Court has ordered the sale of Haailand, a resort in Vijayawada owned by the group, to refund depositors

The police arrested Heera Group managing director Nowhera Shaikh in October for an alleged deposit scam. She had started the company by collecting deposits in 2010. She promised the investors that they would get 36 per cent interest per year for every Rs 1 lakh they invest. She gave the money to investors initially, only to allegedly cheat them later. Nowhera Shaikh later expanded her business to several countries. Police said floated 15 companies under different names and cheated investors to the tune of Rs 1,000 crore, according to the Hyderabad police.

“Many companies are involved in collection of deposits and investment in different modes of gold schemes from people, where they commit to a return of around 36 per cent per annum for the invested amount. The exact number of investors and depositors is not known because the companies have not disclosed complete information to police,” a police official said.

He said Nowhera Shaikh has her business in countries like China, Canada and Dubai and states like Maharashtra, Karnataka, Tamil Nadu, West Bengal apart from Telangana and Andhra Pradesh. She rose to prominence after she formed a political party- the All India Mahila Empowerment Party - and contested in the Karnataka elections.

The Centre’s department of consumer affairs had notified the direct selling guidelines to serve as a framework on guiding principles for state governments to consider regulating direct selling and multi-level-marketing. It has advised states to adopt the guidelines to strengthen the existing regulatory mechanism on direct selling and multi-level-marketing.

( Source : Deccan Chronicle. )
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