KOCHI: The Enforcement Directorate (ED), which is looking into allegations of money laundering against Thrissur-based Highrich Online Shoppe, has found that the company started a Ponzi scheme business in Jharkhand even after its accounts were frozen following investigations launched by multiple agencies in Kerala.
According to ED, between Rs 5-18 crore was transferred into the accounts of five persons who are close associates of managing director K D Prathapan and his wife Sreena Prathapan.
Prathapan was arrested and produced before the Prevention of Money Laundering Act (PMLA) court in Kochi on Friday. He was later remanded to judicial custody.
According to ED, after the bank accounts were freezed, Prathapan relaunched his illegal Ponzi scheme under the guise of another entity — HR Innovation.
He registered it in the name of a person named Fijish in Jharkhand on April 24 and continued collecting money from gullible investors. He opened a bank account with India Overseas Bank to operate the scheme, the central agency said in a report filed with the court.
More than Rs 68 lakh was collected over 24 days into a bank account opened in Jharkhand. This was intended to hide the fact that the new scheme was similar to the one run in the name of Highrich Online Shoppe, the report said.
Similarly, data seized during the search of the premises of Highrich revealed that a large chunk of the proceeds of the crime was transferred to the bank accounts of those at the top of the multi-level marketing (MLM) chain.
Among the recipients, according to ED, were Riyas Vellachithodukayil (Rs 18.26 crore), Rahul Gendrej Nerkar (Rs 10.06 crore), Rajkumar Manhar (Rs 7.96 crore), Dinuraj K R (Rs 5.97 crore), and Suresh Babu (Rs 5.35 crore). The investigation also revealed that these persons had made little or no investments.
Cheated people of Rs 1,157.32 crore
Highrich allegedly cheated the public of Rs 1,157.32 crore, collected as membership fees from members under a fraudulent MLM scheme.
“It is pertinent to note that with geometric 2 progression of the scheme, the number of members would cross India’s population in 30 rounds. That pyramid scheme is designed to go bust, and at any point when it goes bust, 88% will lose their money,” the report said.