Hyderabad: Directorate of Enforcement (ED) has arrested the main accused in Rs 6380 Crore Agri Gold Ponzi Scam.
They have been identified as Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao, Avva Hema Sundara Vara Prasad. The accused were produced before the ED in the Prevention of Money Laundering Act (PMLA) Court, Hyderabad, which has sent them to 14 days of judicial custody.
In a statement, a spokesman of ED said the agency initiated the investigation based on multiple FIRs lodged in AP, Telangana, and Karnataka.
"The scam was perpetrated by Avva Venkata Rama Rao through Agri Gold Group of Companies. Avva Venkata Rama Rao had earlier worked in the Golden Forest CIS Fraud scheme. Having learnt the tricks of the trade-in that scheme, he hatched a well-planned conspiracy and along with his seven brothers and other associates setting up more than 150 companies and started collecting deposits from the general public with a promise of providing developed plots/farmlands or withdrawal at a high rate of return on maturity/pre-term. Thousands of commission agents were engaged to lure people with various schemes for hefty commission and managed to collect Rs 6380 Crore from 32,02,628 such investor accounts," he said.
The spokesman noted that the gullible investors neither got plots nor could recover their deposits. "The group collected deposits illegally from across the Country. The modus operandi of the scheme of the Agri Gold Group Companies was that, they would lure the gullible public to join as depositors in their schemes and encourage them to pay the desired deposits either directly or through the agents under the pretext of real estate deal. These companies did not mention either the actual market value of the land or its location or its boundaries or survey numbers or the permissions required to be obtained for the layouts from the concerned authorities. They tried to color it as a real estate business, but in reality, it was an unregulated unlicensed collective investment scheme," he said.
The ED said Agri Gold Group of Companies did not obtain permission from RBI to collect such deposits. "SEBI has reported that the business of the M/s Agri Gold Farm Estates India Private Limited was nothing but a Collective Investment Scheme and ordered the company to stop taking further deposits and return the money to the depositors. Instead of complying with the directions of the SEBI in letter and spirit, accused Avva Venkata Rama Rao opened new Companies and started collecting deposits in the names of new companies on the pretext of real estate business with the help of an army of commission agents, thus, turning this into a Ponzi scam," he said.
The spokesman noted that although the accused collected deposits from 32 lakh investors, they never developed land sufficient to give plots to all the investors. Even by their unverified claims, in the end, they had only 5.5 lakh plots available with them.
"Investigation under PMLA also revealed that the accused also set up companies abroad and diverted large amounts of funds to off-shore entities. Their names also figured in the Paradise Leaks and they had incorporated companies with the help of the infamous Mossack Fonsenca in the Cayman Islands. Earlier, searches were conducted at the residences of Avva Venkata Rama Rao and other directors including the residences of auditors at Vijayawada and Hyderabad," he said.
The spokesman said various property-related documents, a cash amount of Rs 22 Lakh, digital devices, and other documents were recovered and seized. "On the basis of the investigation carried out so far, accused Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao, Avva Hema Sundara Vara Prasad have been arrested for their involvement in committing the offence of Money Laundering. ED will be seeking their Custody for interrogation," he said.