Agri Gold Group case: ED files complaint in money laundering case against Agri Gold firms

Hyderabad: The Directorate of Enforcement (ED) here has filed a supplementary prosecution complaint (PC) in the case of Agri Gold Group allegedly floating a fraudulent investment scheme in the guise of real estate business.

The complaint named many firms and individuals under the Agri Gold Group banner including Agri Gold Exims, Amruthavarshini Dairy Farms, Avvas Infotech, Mathaangi Infra Ventures, Shakti Timber Estates, Avva Sita Rama Rao, Avva Venkata Subrahmanyeswara Sarma and Sanctuary Homes under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.

The prosecution complaint which was filed earlier was against 14 accused persons/entities including Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao, Avva Hema Sundara Vara Prasad, Agrigold Farm Estates India and Agri Gold Constructions and submitted before the Special Court (PMLA) here in February.

The case involving 19 lakh customers and 32 lakh account holders

The ED initiated an investigation based on several FIRs registered by the police of several States including Andhra Pradesh, Telangana, Karnataka, Odisha and Andaman and Nicobar against the Agri Gold group of companies.

The FIRs were registered based on numerous complaints from depositors against the Agri Gold Group of companies which had collected deposits from around 19 lakh customers and 32 lakh account holders in the name of real estate investment with promises of high returns or residential plots.

Thousands of commission agents were engaged by the Agri Gold group who managed to collect Rs 6,380 crores into 32 lakh investor accounts.

What did the ED investigation reveal?

The ED investigation revealed that the Agri Gold Group allegedly ran a fraudulent collective investment scheme in the guise of real estate business, for which more than 130 companies were floated.

These companies were used to collect deposits as ‘advances for plots’ from depositors, without commensurate land being available with the company, and without specifying the plot and survey numbers and the location of the land.

The group also reserved the rights to offer plots from other ventures, instead of the ones that were advertised and sold.

Agri Gold diverted real estate investments to other ventures

It was further advertised that in case the customer is not interested in buying plots offered by the Agri Gold Group, the entire investment would be refunded with a bonus. By adhering to this business model, the Agri Gold Group led by Avva Venkata Rama Rao and other directors lured lakhs of gullible persons and their deposits, the ED said.

The deposits were later diverted to various industries such as power/energy, dairy, entertainment, health (Ayurvedic), farmland ventures etc., without the knowledge of the depositors.

When the companies faced losses, they couldn’t return the deposits, either in cash or in kind as agreed upon. During the investigation, properties worth Rs 4,141.33 crores were attached by the ED. Further, Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao and Avva Hema Sundara Vara Prasad were arrested in December 2020.