July 17, 2024

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The Enforcement Directorate (ED) is investigating Thrissur-based Highrich Online Shoppe for alleged money laundering. Interestingly, Highrich has started a Ponzi scheme in Jharkhand, despite its accounts being frozen due to ongoing investigations by various Kerala agencies.

The ED discovered that between Rs 5 crore to Rs 18 crore was channelled into the accounts of five individuals associated with K D Prathapan, the Managing Director, and his wife Sreena.

Prathapan was arrested and presented to the Prevention of Money Laundering Act (PMLA) court in Kochi last Friday, then sent to judicial custody.

Once Highrich’s accounts were suspended, Prathapan established another entity, ‘HR Innovation’, to resurrect his illicit Ponzi scheme. The new business, registered under a man named Fijish in Jharkhand on April 24, allowed Prathapan to continue fleecing innocent investors. A bank account was opened in India Overseas Bank to manage the scheme.

In the span of just 24 days, 68 lakh rupees were collected in the newly established Jharkhand bank account, obscuring the relationship between the new scheme and Highrich Online Shoppe.

A significant portion of the proceeds from illicit activities was transferred to those at the helm of the multi-level marketing chain. The primary recipients, as per the ED, include Riyas Vellachithodukayil, Rahul Gendrej Nerkar, Rajkumar Manhar, Dinuraj K R, and Suresh Babu, all having little or no initial investments.

Highrich allegedly defrauded the public of Rs 1,157.32 crore, garnered as membership fees from a deceitful multi-level marketing scheme. The report notes that when the pyramid scheme inevitably collapses, about 88% of members will lose their money.

Frequently Asked Questions

What is a Ponzi scheme?

A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The scheme leads investors to believe that profits are coming from genuine business activity, but in reality, it is a type of pyramid scheme.

Who are some of the notable recipients of the proceeds from the Highrich scheme?

The Enforcement Directorate found that a significant chunk of the proceeds from the Highrich Ponzi scheme was funneled to individuals at the top of the multi-level marketing chain, namely Riyas Vellachithodukayil, Rahul Gendrej Nerkar, Rajkumar Manhar, Dinuraj K R, and Suresh Babu.

How much money has Highrich allegedly scammed from the public?

According to recent reports, Highrich has reportedly swindled the public of Rs 1,157.32 crore. This money was primarily collected as membership fees under an illicit multi-level marketing scheme.