KOCHI : The Enforcement Directorate (ED) has stated that Thrissur-based Highrich Online Shoppe Pvt Ltd was involved in one of the largest financial frauds in Kerala. The ED report filed at the PMLA Court in Kochi opposing the anticipatory bail plea filed by the company’s managing director K D Prathapan and his wife Sreena Prathapan, who was also its CEO, revealed that the company fraudulently collected Rs 1,157.32 crore from the public and the proceeds of crime stood at Rs 212.45 crore.
“An in-depth investigation is necessary against the petitioners as the scam is reportedly one of the largest in the state. It is noticed that several complaints were lodged by the affected parties in different police stations against the petitioners and registration of crimes is under way,” said the report. Highrich Online Shoppe, founded in 2019, collected funds from the public in the guise of online grocery stores.
Later, the firm initiated projects like Highrich OTT and cryptocurrency named HR coins to attract further investments. The company operates around 630 franchisees across India. To attract more customers to these franchisees, the company introduced the ‘first purchase’ scheme, ‘digital coupon’ scheme, and activation to privileged ID schemes.
According to ED, the accused collected deposits by promoting an illegal ‘money circulation scheme’ under the guise of selling grocery products.
“The company is not running any substantive income-generating business by using the deposits. The alleged business of direct selling of products to the members is not contributing any substantive income for the company. A major portion of the money collected from new members is utilised for distribution to existing members as incentives. The rest of the money is diverted as the profit of the petitioners,” the ED report said.
After questioning the chief operations officer, marketing manager, company promoters and associates, the ED found that the company collected Rs 1,157.32 crore as membership fees from members by attracting them into a fraudulent MLM scheme and recorded as purchase consignment advance in the book of account for the year 2023-24.
“The deposit collections by the company are grouped and parked under two heads- Grocery Pin of Rs 19.21 crore, and HR coin of Rs 1138.11 crore. Most of the money collected was utilised for redistribution to the members as an incentive/commission in the typical ‘Ponzi Scheme’ format. The rest of the money is the profit siphoned off by the company and its promoters which is a part of the proceeds of crime generated by the said company and its directors,” the report said.
The ED investigation revealed that the accused persons were engaged in promoting and trading cryptocurrency to do business at the international level using crypto coins. “It is revealed that, to date, no exchange has been formed and to cheat the public, the accused received crores of rupees by offering high interest rates. Rs 212.45 crore parked in the bank accounts of the petitioner’s company is proceeds of crime,” the ED said.