Cyberabad police busts Hisar-based MLM fraud worth Rs 1,200 crore

The Indian Express
September 08,2018
 Sreenivas Janyala 

The Economic Offence Wing of Cyberabad police on Saturday arrested two people for carrying a multi-level marketing (MLM) money circulation scheme fraud of more than Rs 1,200 crore. The two accused, Radhe Shyam, Chairman and Managing Director of M/s Future Maker Life Care Global Marketing and Director Surender Singh, operated from Hisar, Haryana, claimed officials.
In addition, the EOW officials have seized Rs 200 crores from the company which was registered at Registrar of Companies (ROC), New Delhi. Cyberabad Commissioner of Police V C Sajjanar claimed that Radhe Shyam, the CMD, who earlier worked with MLM companies formed his own company and floated a binary scheme–which means one person has to enroll two persons each and build a chain. The MLM charged a joining fee of Rs 7,500 for the scheme and promised a return of Rs 2,500 a month after joining and the remaining amount could be utilized to purchase clothes and medicines.
“The company promised that if a person enrolls two more persons, a pair commission of Rs 500 is given as an additional bonus apart from the Rs 2,500 which is credited every month up to 24 months which amounts to Rs 60,000. Thus, a person by investing Rs 7,500 initially will be getting Rs 60,000 in two years. This benefit is apart from the benefit derived from the enrolment of members to the scheme. Depending upon the number of persons enrolled, the commission promised by the company ranges from Rs 5,000 to Rs 1 crore,’’ an official of the EOW of Cyberabad Police said.
Officials said the company and its members have been targeting the unemployed youth, housewives and retired employees with the promise of part-time income. “It has come to our notice that several people in and around Hyderabad have been cheated and looted of crores of rupees by the company,” claimed officials.
The main victims are from Haryana, Delhi, Madhya Pradesh, Maharashtra, Orissa. During the course of investigation bank accounts of the company has been seized. It was found that the company had an account in IndusInd bank which had a balance of Rs 14.78 crores; Bandhan Bank 20.47 crores, Axis bank 56.20 crores, 125 crores in HDFC, and Rs 20 crores in Canara Bank.
Officials claim that Section 3 of Prize Chits and Money Circulation Schemes (PCMCS) Banning Act, 1978 makes the person liable in case he joins or enrolls others into the scheme. Thus, mere joining itself into such illegal schemes is an offense under this Act. The Supreme Court has observed that enrolment of members in a binary scheme leads to mathematical impossibility and ultimately leads to cheating. Hence, the promoters are held liable under Section420 of IPC.
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