NEW DELHI: The Enforcement Directorate (ED) conducted searches at eight locations across Tamil Nadu and Kerala linked to Dream Makers Global Pvt Ltd (DMGPL) as part of a money laundering probe into an alleged multi-level marketing and Ponzi scheme, the agency said on Thursday.
The searches were carried out on June 30 under the Prevention of Money Laundering Act (PMLA), 2002, at Coimbatore and Krishnagiri in Tamil Nadu, and Malappuram and Thrissur in Kerala.
The ED initiated the investigation based on a case registered by the Economic Offences Wing of the Tamil Nadu Police under provisions of the Indian Penal Code, 1860, that constitute scheduled offences under the PMLA.
According to the agency, DMGPL and its key managerial personnel — S. Sathish Kumar (since deceased), Gunavathy and Mugunthan Nair — collected large sums of money from thousands of depositors on the pretext of investing in software projects, promising high daily returns and doubling investments within 150 days.
The ED alleged that initial returns were paid to attract more investors, but the scheme later defaulted, causing massive losses to depositors.
Gunavathy, a director of DMGPL, and her husband, Sathish Kumar, the company's managing director, allegedly colluded with associates to collect deposits worth hundreds of crores of rupees from the public in the company's name.
Mugunthan Nair, described as a manager at the firm, is accused of organising promotional meetings and soliciting public participation through false promises.
The agency alleged that the proceeds of crime, disguised as "returns" or "commissions", were used to acquire immovable properties, vehicles and other personal assets.
The ED said bank accounts, fixed deposits and other financial instruments linked to the accused and their associates have been identified, with several already frozen by other law enforcement agencies.
"During the searches, several incriminating documents, diaries, digital records and details of immovable properties purchased from the commissions received from M/s DMGPL were recovered and seized under the provisions of the PMLA, 2002," an ED official said.