Owners of Bengaluru-based Indus Viva arrested in Rs. 1,500 cr scam by ED

ED launched an investigation based on an FIR registered by the Gachibowli police station. It found that the company was involved in a multi-level marketing scam having an illegal pyramid-type structure and was working under the guise of direct selling business.

The company had engaged a large number of distributors stating that there was a great opportunity to make quick and easy money by becoming a member and then in turn making further enrollments under one's downline.

In order to project their fraud pyramid scheme as a legitimate business, the company had introduced some products which were by their own admission valued at only 20% of the sale revenue and in reality were completely worthless. The membership fee paid by new clients was used to pay commission to old clients. By giving false promises and inducements, the company had enrolled around 10 lakh members and collected around Rs. 1,500 crore since its inception.

During the investigation, it is noticed that Anzar and Abhilash had floated subsidiary companies in Indus Viva Group and diverted the funds to these entities. They had also blatantly siphoned off the funds into their personal accounts. The diverted funds were used to acquire properties/assets in the name of individuals and companies.

The accused were produced before the PMLA special court, Rangareddy, and remanded to 14 days of judicial custody from 16 to 30 December.

The Scam

On February 20, 2021, Gachibowli police station received a complaint from a person who was cheated by the company. The complainant had invested Rs. 12,500 in the company through his promoters Hari Prasad and Rajabanoth. However, the complainant did not receive any commission on his investment as promised by the promoters.

In order to become a member of Indus Viva Health Sciences Pvt. Ltd, a person has to pay Rs. 12,500 and buy the company's products. They will be awarded 100 Point Value. Then he or she will be issued a user ID and password to continue the scheme. Now, the member has to bring in new members - one person to the left and one person to the right - by paying Rs. 12,500 each. Then he or she will earn Rs. 1,000 as a bonus. But in order to get these benefits, the member (who has already joined the scheme) has to enroll two other members in the scheme within a week. The member has to enroll more persons to earn more money.

The company has several such schemes including President Club Member Plan where a person can become a member by paying Rs. 1, 50,000. A member is given an incentive depending on the number of persons he or she has enrolled. For example, a member who refers 4,000 members gets a one-week trip to South Africa, while one who refers 10,000 members gets a Mercedes Benz and a one-week trip to the US.

These persons were booked under sections 406, 420 of the IPC and 4,5,6 r/w 3, 2(C) of Prize Chits and Money Circulation Schemes (Banning) Act-1978.