ED attaches assets worth ₹84.24 crore in Multi-level marketing scheme scam

The Enforcement Directorate (ED) has provisionally attached movable and immovable assets worth ₹84.24 crore in the multilevel marketing (MLM) scheme case of M/s KBC Multitrade Pvt. Ltd. & Ors under the Prevention of Money Laundering Act (PMLA), 2002, on March 19, an ED official said in a statement. The assets are located in Nashik, Thane, Sindurgarh, and Pali districts among other areas across Maharashtra and Rajasthan.  

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. 

Officials from the ED said that the investigation was initiated based on several FIRs registered in Parbhani, Nashik, and other districts across Maharashtra under various sections of IPC, 1860 against M/s KBC Multitrade Private Ltd. and its promoters, Bhausaheb Chhabu Chavan and Arati Bhausaheb Chavan.  

ED investigations revealed that Chavan family along with co-accused principal agents of company hatched a conspiracy to allure people through an MLM scheme run under the aegis of M/s KBC Multitrade Private Limited and M/s KBC Club and Resorts Private Limited promising attractive refunds on their investment and duping them of more than ₹200 crore. People were subscribed as members on payment of fees under various packages/schemes propagated by M/s KBC Multitrade Private Limited and M/s KBC Club and Resorts Private Limited, with promises of Binary and Matrix commissions, awards, rewards, and product gifts,” ED officials informed.  

The commission was incumbent upon all members to enrol 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 incentivised 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 Prabhani district of Maharashtra prison which revealed that the Directors/Promoters of M/s KBC Multitrade Private Ltd. Bhausaheb Chhabu Chavan and Arati Bhausaheb Chavan and other co-accused used the membership fees collected from the public for acquisition of immovable assets, gold jewellery, and investment in shares.  

The ED also conducted search operations under the PMLA on March 8 and 11 at eleven official and residential premises in Nashik and Thane in Maharashtra and placed various movable assets of the accused under restraint. Further investigation is under progress, said the ED officials.