July 24, 2024

The company was discovered to be involved in cryptocurrency trading

New Delhi – On Friday, the Enforcement Directorate announced that it had carried out a series of raids across the country as a part of its ongoing investigation into a Ponzi scheme run by a Kerala-based firm. The financial fraud allegedly defrauded investors to the tune of Rs 1,500 crore.

The raids commenced on June 11, primarily focusing on the key players of HighRich Online Group with properties in Kerala, Maharashtra, and Chhattisgarh. These ongoing investigations are due to several FIRs filed earlier by the Kerala Police.

The enforcement team has managed to freeze upwards of Rs 32 crore in various bank accounts associated with the corporation, the promoters, as well as their family members. They have also seized physical assets such as about Rs 70 lakh in cash, jewellery, and four vehicles.

“The raids uncovered immovable assets worth Rs 15 crore tied to the promoters and various members of the HighRich Online group, which are believed to be the gains from the alleged crime.” “It has been discovered that the company and its leading members were deeply involved in cryptocurrency trading, even creating their own coin- named HR Crypto Coin,” the agency further clarified.

In addition to defrauding investors, the corporation also managed to sell its HR Crypto Coin for Indian rupees and USDT (a form of cryptocurrency), thus extending their Ponzi scheme. Investors were drawn in with promises of gaining 15 per cent per annum in interest.

Referrals were a popular sales strategy for the company. By enticing existing members to bring in new investors, the company promised referral incentives of 30 per cent.

The sale of memberships or digital IDs was the company’s main product, allowing members to recruit new investors and adding to the MLM (multi-level marketing) nature of the scheme.

This case exhibits a textbook example of a Ponzi scheme. It involves the recruitment of new members, offering incentives from the funds collected from new recruits.

“The sum collected from this Ponzi-type MLM scheme is an estimated Rs 1,500 crore,” stated the agency.

Nearly Rs 250 crore of this sum has been channelled by the executives – K D Prathapan and Sreena Prathapan, among a few others, into their personal accounts.

(Note: This article has been sourced from a syndicated news feed, with only the title edited.)

Frequently Asked Questions

1. What’s a Ponzi scheme?

A Ponzi scheme is a fraudulent investment operation where the operator provides fabricated reports and generates returns for older investors with money taken from new investors.

2. How was cryptocurrency involved in this scheme?

HighRich Online Group established their own cryptocurrency named HR Crypto Coin which they sold as part of their Ponzi scheme. They accepted both Indian rupees and USDT (a type of cryptocurrency) as payment for HR Crypto Coin.

3. What was the outcome of the Enforcement Directorate’s investigation?

As an outcome, they froze around Rs 32 crore in various bank accounts related to the company, promoters and their family members. They also were able to seize valuable objects amounting to about Rs 70 lakh in cash, jewellery, and four vehicles.