The economic offences wing of the Cyberabad police on Saturday arrested nine youths, including four IIT-Kharagpur dropouts, in an alleged multi-level marketing (MLM) fraud case. The case worth around Rs. 30 crores.
According to Cyberabad Police Commissioner VC Sajjanar, the accused persons started a company named Pro Healthy Ways International LLP. The company was based in Malakpet area of Hyderabad and enrolled around 40,000 distributors in both Telugu states. They collected Rs. 4000 from each distributor.
The members would have to enroll two more people in the binary scheme under the garb of promoting the products of Pro Healthywayz. There were lucrative commissions and performance-based rankings. This lured unemployed youths to fetch them additional income.
The company sold 18 items that it procures from different companies in Rajasthan, Punjab and Telangana.
The fraud activated relevant sections of the the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and the Indian Penal Code (IPC). After producing them in front of a local court, they were sent to judicial remand. Rs 40 lakhs have been seized from the bank accounts of the accused.