Hyderabad police have arrested nine people including four IIT Kharagpur dropouts in a multi-level marketing scam case.
All the accused of a multi-level marketing money circulation scheme fraud of INR 30 crores is arrested by the Economic Offences Wing of Cyberabad police.
The nine people were charged various sections of the Indian Penal Code and the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
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The nine of them started a company by the name Pro Healthy Ways International LLP in Malakpet area of Hyderabad city, according to Cyberabad Police Commissioner VC Sajjanar.
Working altogether they were successful in involving 40,000 distributors in both the Telugu states of Andhra Pradesh and Telangana.
For joining the scheme, each distributor has to pay INR 4,000 and then lure unemployed youth and elderly people to join the scheme.
Doing all this, they collected more than INR 30 crores from the members.
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Mr Sajjanar explains that the recruits attended meetings to understand the circulation scheme.
Each member has to enrol two more persons for which they would get 25 per cent commission.
The new members were then required to enrol two more members each, and the first recruiter would get commissions for that.
The company sells 18 items.
It procures Ved gain (for Increasing weight), Ved Fit (for weight reduction), Gilloy Juice (immunity booster), Ortho Oil, Heart Care, Herbs oil, Herbal Tooth Paste and Ved Life Herbal Powder.
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The Ved Moisturiser, tan gel, acne lotion, shampoo and anti-radiant chips are from different companies in Rajasthan, Punjab and Telangana.
Mohammad Rizwan, CEO of the firm, Bhattu Saikonda and Mohd Isaaq, the directors of the firm, and A Naresh, P Sai Charan, Venu Naik, Y Sathya, B Anil Kumar & K Srinivasulu, the distributors associated with the firm has been arrested.
Police have recovered INR 40 lakhs from the bank accounts of the accused and have registered a case for further investigation.
The core members had previously been associated with Resource Money Power, an MLM company which shut down in 2010.
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After that, they joined (MI) Life Style Marketing Pvt Ltd, another MLM firm based in Chennai where they worked for two years.
They were not provided with the promised commission and quit the company.
With all the experience they gained, they thought of starting their own multi-level marketing money circulation company funded by Rizwan Younus.
Ashish Khatri associated with the website and software development firm Logic Soft in Dehradun helped Rizwan to design software for the company.
Khatri worked for eight months with the firm. With the help of Smart Solutions’ CEO Kishore Verma, the company’s official website was designed and launched.