Multilevel marketing scheme case: ED attaches assets worth Rs 84.24-cr in Maharashtra, Rajasthan

New Delhi: The Enforcement Directorate (ED) has attached movable and immovable assets worth Rs 84.24 crore in the multilevel marketing scheme case of KBC Multitrade Pvt Ltd and Ors located in Maharashtra and Rajasthan.
These asses are located in Nashik, Thane, Sindurgarh, and Pali districts, among other areas across Maharashtra and Rajasthan. The properties were attached under the Prevention of Money Laundering Act (PMLA), 2002 on March 19.

The attached assets include movable and immovable assets, including the benami properties acquired by the promoters Bhausaheb Chhabu Chavan, Arati Bhausaheb Chavan, and others, DEMAT accounts, post office savings, silver and diamond jewellery, bullion, and bank account balances.
ED initiated an investigation on the basis of several First Information Reports (FIRs) registered in Parbani, Nashik, and other districts across Maharashtra under various sections of the Indian Penal Code (IPC), 1860, against KBC Multitrade Private Ltd and its promoters, Bhausaheb Chhabu Chavan and Arati Bhausaheb Chavan.
"ED investigations revealed that the Chavan family, along with co-accused principal agents of the company, hatched a conspiracy to allure people through an MLM (multilevel marketing) scheme run under the aegis of KBC Multitrade Private Limited and KBC Club and Resorts Private Limited, promising attractive refunds to the public on their investment and duping them of more than Rs 200 crore," the agency said in a statement.
"The public were subscribed as members on payment of fees under various packages and schemes propagated by KBC Multitrade Private Limited and KBC Club and Resorts Private Limited, with promises of binary and matrix commissions, awards, rewards and product gifts."
According to the federal agency, the commission was incumbent upon all members to enroll more members, as a portion of the subscription amounts so collected is distributed among the members at the top of the pyramid.

"The members got incentivized to invest, lured with such commissions even when there was no actual underlying business activity of the company."
Earlier, statements of the main accused were recorded by ED in Prabani district prison which revealed that the directors and promoters of KBC Multitrade Private Ltd Bhausaheb Chhabu Chavan and Arati Bhausaheb Chavan and other co-accused used the membership fees so collected from the public for acquisition of immovable assets, gold jewellery and investment in shares.

ED had also conducted search operations under the provisions of Prevention of Money Laundering Act (PMLA), 2002 on March 8 and March 11 this year at 11 official and residential premises in Nashik and Thane (Maharashtra) and placed various movable assets of the accused under restraint.