Probe Agency Raids Kerala-Based Ponzi Company That Duped Depositors Of Rs 1,500 Crore

The Enforcement Directorate Friday said it raided multiple locations in various states as part of a money laundering investigation against a Kerala-based company that allegedly duped depositors to the tune of Rs 1,500 crore through a ponzi scheme.

The searches were launched on June 11 on the premises of the promoters of HighRich Online Group in Kerala, Maharashtra and Chhattisgarh.

The money laundering case stems from multiple FIRs filed by the Kerala Police.

The searches have led to the freezing of around Rs 32 crore of proceeds of crime in various bank accounts of the company, promoters and their family members, seizure of about Rs 70 lakh in cash, jewellery and four four-wheeled vehicles, the central agency said in a statement.

"The search also led to tracing of immovable properties worth Rs 15 crore with promoters and various leaders of HighRich Online group which have been acquired out of the proceeds of crime." "Searches have also revealed that the company and its promoters and leaders were involved in trading in cryptocurrency on few exchanges and sold their own so-called crypto coin named HR Crypto Coin," it said.

The crypto coin, the agency claimed, was sold in exchange for Indian rupee and USDT (a type of crypto currency) and it was also a part of ponzi scheme where people were lured to invest their money for which they got 15 per cent interest per year.

When the customer introduced a new customer, they got 30 per cent direct referral income, it said.

The agency said the company was selling the memberships in the form of digital IDs which consisted of the user credentials (user name and password) of the individual investors to access the website-- www.highrich.net.

"The members would further sell the memberships/digital ids to other people to earn commission," the ED said.

It was found that the company would give incentives to these individuals when they refer new members to join the marketing scheme which is nothing but sharing of the commission received on joining of new members, the agency said.

There is no real underlying business of sale of goods and this is the typical modus operandi of a Ponzi scheme, it said.

"The total amount collected from people at large in this Ponzi type MLM (multi-level marketing) scheme is approximately Rs 1,500 crore, " the ED said.

The collected money was partly redistributed as rewards to the members of the scheme at the top of the pyramid and the profit of around Rs 250 Crore was siphoned off by the promoters of the company like K D Prathapan, Sreena Prathapan through their family members and various entities, the agency said.

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