Money laundering companies thrive

Published: 09th August 2012 12:05 PM  |   Last Updated: 09th August 2012 12:05 PM   |  A+A-


Notwithstanding raids by the State Crime Branch and negative campaigns against the chit fund organisations and Multi-Level Marketing (MLM) companies, the mushrooming money-circulation and network business in Balasore district has left market experts worried.

Official sources said the coastal district has close to 200 such organisations, which are spread across all 12 blocks, the vulnerable pocket being the northern region.

The organisations include real estate companies, micro-finance and self- help cooperative societies.

Although none could figure out the exact amount of money involved in the business,  sources at the Crime Branch indicated the MLMs have done a business of roughly over Rs 500 crore in the last seven years in the district alone.

Promising to double their investment in two to three years, such companies have collected deposits from over 2.5 lakh unsuspecting depositors.  

The chit fund embezzlements came to light in July 2009 when the Crime Branch unearthed a scam of ` 200 crore involving seven MLMs. The CB has already frozen about Rs 191 crore deposited in several bank accounts across the country. Altogether five persons, including producer and actor of Bollywood flick ‘Shadow’ Naseer Khan and his aide were arrested in this connection.

Prior to the raid while companies from neighbouring states have been collecting deposits through their branches across the district, sources said, most of the local companies flourished after 2009 under the nose of the police and all law enforcement agencies.

What has left the intelligentsia astonished is the dwindling business of the banks and postal department,  earlier considered safe for savings. While banks and Postal Department have been providing returns at an interest rate of 8.5 to 9 per annum, the non-banking organisations are luring the depositors  with 15 to 18 per cent interest which is not viable and illegal.

As per the recent report of the district small savings officer, while Rs 52 crore were deposited with the Postal Department in the last fiscal, so far only Rs 10 crore has been deposited in the current financial year. 

A social activist Dilip Kumar Parida said though the CB had unearthed the scam, the raids conducted by the agency are not sufficient. “It should conduct raids frequently and take necessary legal steps to seal the companies to ensure that they won’t collect deposits anymore,” he suggested besides demanding refund of the deposited hard-earned money.

The CB in the last couple of months has raided three more such MLMs, which include Seashore Group, Sai Pragati Assets and Properties Pvt Ltd and Ashore Group. A CB official said the investigation of the 2009 scam has been completed and chargesheet submitted in the High Court. “We are waiting for the judgment,” he said.

Additional Director-General of Police (Crime Branch) Bijay Kumar Sharma said the agency was keeping a tab on the fraudulent activities and would soon launch raids on a number of such organisations.


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