ED files charge-sheet against Ebiz.com, its MD in money laundering case
New Delhi, March 13 (IANS): The Enforcement Directorate (ED) said on Friday that it had filed an indictment before a special PMLA court against Ebiz.com Private Limited, its managing director Pawan Malhan and 26 others in connection with its investigation into the fraudulent MLM Pyramid scheme.
ED said in a statement that an investigation conducted under the Anti-Money Laundering Act (PMLA) revealed that the funds had been fraudulently collected by subscribers as membership deposits through a chain of agents spread across India.
“The deposits thus collected were illegally redirected to the personal accounts of directors, members of their families and other associates under various chapters – dividends, salaries / incentives, etc. – and were used to purchase property for themselves or their relatives,” it says in it.
The statement went on to say that the defendants were cheating on the public, claiming that their fraud pyramid scheme was a legitimate network scheme for direct sales by introducing non-standard products such as the length of the suits.
Earlier in 2019, ED temporarily attached various movable / immovable property worth about 277.97 crores from Malhan, his son Hitik Malhan and others.
ED had filed a lawsuit based on FIRs registered by Telangana police against Ebiz.com Pvt Ltd and its directors or associates for deceiving the general public by spreading a pyramid scheme and enticing the trusting public through the false hope of making quick and easy money.
He claims that they operated this scheme under the guise of direct sales to multi-level marketing companies to sell useless products such as computer training packages (which are downloaded freely from the Internet), cheap lengths of suits, etc.
ED said the main purpose for which members join the scheme is to get a commission on subscriptions, not for products.
“They widely advertised their commission model, in which sponsoring members were paid very high commissions to enroll new members in their downlink to the pyramid. They used large conventions in which the highest members of this pyramid scheme would pay exalted speeches and showcasing their newly discovered wealth, earned by commissions, and encouraging thousands more to join the scheme, “said ED.
“The balance is being pushed out by the Malkhan family. Such schemes are inherently unsustainable and they collapse as soon as there is a run in the business. In such Ponzi schemes, only the best members make significant profits, leaving varnishes at the base of the pyramid. poor in their investment, “it said.