Cops bust 1,000 cr MLM fraud; one held

Hyderabad: The Cyberabad police on Tuesday busted a multi-level marketing scam worth Rs 1,000 crore involving a Noida-based company eBiz.com Private Ltd and arrested a man who allegedly ran it and froze its bank deposits worth more than Rs 70 crore.

Cyberabad Police Commissioner V C Sajjanar told reporters that "This case of cheating and money circulation by eBiz.com was busted by the sleuths of Cyberabad police in which one person named HitikMalhan (31 years), son of Pawan Malhan (MD) and AnithaMalhan (Director), was arrested under sections 406, 420, 506 IPC and Sections 3, 4, 5, 6 r/w 2(C) of Prize Chits and Money Circulation Schemes (Banning) Act 1978.

The office of eBiz at Noida is sealed and an amount of Rs. 70.5 crore has been frozen in the bank accounts of the company, its directors and accused persons, he added.The Cyberabad police, acting on a complaint by a 20-year old student from Hyderabad, probed the case and busted the scam. "The scheme is rampant in cities of Hyderabad, Bangalore, Chennai and States of Jammu and Kashmir, Delhi, Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu and Goa," he said, adding that a detailed investigation was being done into the whole scam.

Sajjanar also said eBiz is a money circulation company established in 2001 based at Sector 63, Noida in Uttar Pradesh, It was registered with Registrar of Companies, India (ROC) in New Delhi. The company has got around 7 lakhs representatives as its members and the amount of cheating to the tune of more than Rs.1,000 crore.

eBiz promoters give motivational lectures to the public especially targeting students and unemployed youth stating that there is a business opportunity project which will yield huge profits to them.Once the customer joins by paying through Demand Draft (DD) to the company through their introducer person, a username and password will be generated.

Each person would join by paying Rs 16,821. Each member would in turn, had to enrol more members who would be part of the chain. After paying the money the new comer would get some products/e-learning courses/holiday package and the promoter got commission. The new representatives were required to enrol three more members.

As the number of persons increased down the line the older recruits would get more money as commissions, he said."However, as finding new members becomes difficult, the chain gets broken somewhere and the scheme collapses at one point of time. All those who invested in the form of deposits, would lose their money," the police commissioner said.