Multi-level Company Raided by Cyberabad Cops for Fraud Worth Rs 5,000 Crore; 17 Lakh People Duped


Hyderabad: Having duped more than 17 lakh people to the tune of Rs 5,000 crore across the country, a multilevel – marketing company named Pvt Ltd was busted by the police in Cyberabad.

The Managing director of the Noida-based company, Pawan Malhan, and his son Hitikh Malhan were nabbed from Delhi on Monday and were produced before the court on Tuesday.

The company, which goes with the tagline ‘Vision to Reality,’ targeted mostly unemployed youth and offered education packages, motivational lectures, e-learning software courses. The wide-range of services also included offers related to beauty, personal care and holiday packages.

According to the Cyberabad Police, the company’s business model is a ‘Pyramid Scheme’ – where the early entrants earn money as they increase the representatives. Every entrant is expected to payRs 17,000 at the time of joining.

“Multi-level Marketing, Network marketing, Referral marketing, Chain marketing, Direct Selling etc., whatever name these are called they are all Money Circulation Schemes. The fraudsters are cheating people in the name of part time jobs. Products are just a camouflage, while the back end is a Money Circulation Schemes banned in India under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act 1978,” Cyberabad Police Commissioner VC Sajjanar said on Tuesday.

Till now Rs 389 crore have been seized from the bank accounts of the company and it’s directors. Apart from these, the company’s offices, spread across 500 sq yards in a plush locality of Noida, were also sealed on Tuesday. Further investigation underway to nab the rest of the accused.

It all started with a complaint from a 19-year old student, Mohammed Sharooq, a resident of Hyderabad. Three other cases were also registered against this company in Cyberabad. Cyberabad is the area encircling the Hyderabad city.

A quick check revealed that there have been number of cases registered against this company across the country. A case is also registered in Enforcement Directorate and is under investigation, according to Cyberabad cops.

Pawan Malhan, who is the MD of the company, floated the eBiz in 2001 in Noida. His wife, Anitha Malhan, was the director and their son Hitik Malhan looked after the company affairs. According to the Police, the company has over 17 lakh representatives.

Cyberabad Police Commissioner VC Sajjanar said the group’s operations were rampant in Hyderabad, Bengaluru, Chennai, and Uttar Pradesh, Maharashtra, Goa, and also in Jammu and Kashmir and Delhi.