ED attaches Rs 300-crore assets of Telangana group in Ponzi scam

New Delhi, Aug 16: The Enforcement Directorate (ED) on Friday said it has attached assets worth about Rs 300 crore in connection with its money laundering probe in an alleged Ponzi scam involving a Telangana-based multi-level marketing group.

The attached properties belong to promoter Nowhera Shaikh, arrested by the ED in the case, of Heera Group of Companies and others, and are spread across multiple states. The agency has issued a provisional order under the Prevention of Money Laundering Act (PMLA) for attachment of the assets valued at Rs 299.99 crore, it said.

"The attached assets comprise 96 immovable properties located in Telangana, Kerala, Maharashtra, Delhi and Andhra Pradesh worth Rs 277.29 crore in the form of agricultural lands, commercial plots, residential buildings, commercial complexes and balances in bank accounts worth Rs 22.69 crore," the Enforcement Directorate (ED) said in a statement.

The case pertains to the fraudulent money circulation scheme, called a Ponzi or chit fund, allegedly perpetrated by the Heera Group in Hyderabad and the ED had filed a criminal case of money laundering in the instance based on multiple Telangana Police FIRs over allegations of illegally collecting deposits from lakhs of investors by promising high returns.

The federal probe agency said the group "collected an amount of about Rs 5,600 crore as unauthorised deposits from around 1,72,000 investors across the country by engaging a network of marketing executives and direct selling agents with a false promise of paying high rate of returns of 3 per cent per month or 36 per cent per year." Shaikh floated multiple schemes and extensively advertised the schemes to lure the victims, it said.

She launched 24 firms/entities under Heera Group and 182 bank accounts were opened in different banks at different parts of the country in the name of these two dozen entities, the ED alleged. "Ten bank accounts were also opened in foreign countries such as UAE, Saudi Arabia for collecting these deposits and Shaikh did not possess any valid permission either under the Banking Regulation Act, Companies Act, RBI Act or from any other government agency such as SEBI etc for collecting deposits," it said.

Shaikh, the ED charged, started gold, food and textile trading businesses only to create the impression that she is earning legitimate profits, but in reality, the pay-outs to the new members were simply being funded from the cash flows generated from new members/investments. "The volume of business in her gold, textile and food marts was minuscule and not sufficient to justify the high returns promised by her," the ED statement said.

"Shaikh along with her family members and close associates diverted the depositors' money to their personal accounts and amassed huge movable and immovable assets for wrongful personal gain. "The diverted funds were further layered into various shell companies and in the form of benami assets so as to ultimately cheat lakhs of innocent victims and to launder these crime proceeds for personal benefit," it said.