The Enforcement Directorate has frozen three dozen bank accounts holding more than Rs 90 crore deposits after it raided various premises of a 'direct selling' company that is alleged to have duped numerous investors, the agency said Wednesday.
According to the Indian Direct Selling Association, the term 'direct selling' simply means selling direct to the end-users through a retail channel used by top global brands and smaller, entrepreneurial companies to market products and services to consumers.
The searches were conducted on Tuesday in Mumbai, Bengaluru and Chennai in connection with a money laundering case against Vihaan Direct Selling India Private Limited which is the master franchisee company of Qnet Ltd in India, the federal agency said in a statement.
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"During the searches, the ED has freezed a total of 36 bank accounts relating to various companies, individuals, proprietorship connected with the case with amounts involving more than Rs 90 crore," it said.
"Incriminating" documents and some digital devices were also seized, the agency said.
The money laundering case stems from an FIR filed by the Mumbai Police economic offences wing (EOW) against Qnet Ltd, Vijay Eswaran, Vihaan Direct Selling (India) Pvt. Ltd and other companies and individuals.
"Vihaan Direct Selling India Pvt. Ltd, a master franchise of Qnet in India, has used/floated various shell companies/dummy proprietorship for routing the funds received from huge number of innocent investors.
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"The company has duped huge number of innocent investors in India by way of investing their hard-earned money in the Ponzi scheme in the guise of direct selling business," the ED alleged.
The agency said the "investors were duped of their hard-earned money in the guise of huge profits without informing them of the nature of business and the details of utilisation of their invested money."
The EOW FIR stated the estimated "proceeds of crime" in the case is about Rs 400 crore.
"However, during the course of investigation, it has been observed that more than Rs 2,000 crore has been routed by way of opening various shell companies by these entities," it alleged.
