Three promoters of Agri Gold Group arrested for Ponzi Scheme Fraud Case worth ₹6,380
Those arrested have been identified as Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao, Avva Hema Sundara Vara Prasad, who are the main accused under the sections of the prevention of money laundering act (PMLA).
The accused were produced before the ED PMLA Court, Hyderabad, which granted them 14-day judicial custody.
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.
The ED claimed that 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 set up more than 150 companies and started collecting deposits from general public with a promise of providing developed plots/farm lands or withdrawal at a high rate of return on maturity/pre-term.
In the end, the gullible investors neither got plots nor could recover their deposits. The group collected the deposits illegally from across the country.
According to ED officials, the company duped lakhs of investors from Andhra Pradesh, Telangana, Karnataka, Odisha, Tamil Nadu, Maharashtra, Chhattisgarh and Andaman and Nicobar islands.
"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," it said.
Even SEBI has reported that the business of the 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," the ED said.
"Considering the huge discrepancy in the amount of land available, the group should have used all their resources in identifying, buying and developing more land parcels. Instead, Avva Venkata Rama Rao and his family went on a siphoning spree and illegally diverted the public deposits and invested in myriad verticals and in private companies which were directly owned by their family," the ED said.
During probe it was revealed that the accused also set up companies abroad and diverted large amounts of funds to off-shore entities.
Earlier, searches were conducted at the residences of Avva Venkata Rama Rao and other directors including the residences of auditors at Vijayawada and Hyderabad. Various property related documents, cash amount of ₹22 lakh, digital devices and other documents were recovered and seized.
Top stocks to watch – Infosys, Wipro, Jubilant FoodWorks, Bajaj Auto, Majesco, and others
There are one of only 17 Indian companies out of 500 that aced the Du Pont test
Wipro offers 10% more to buy back shares and signs a $700 million deal with Metro AG – everything that’s driving the IT services stock higher today