On 24 March 2023, the Enforcement Directorate (ED) carried out search operations at seven locations, four in Hyderabad and three in Bengaluru, in connection with a money laundering case against M/s Vihaan Direct Selling (I) Private Limited, a sub-franchisee company of M/s Qnet Ltd. The searches led to the discovery of various incriminating documents and digital devices, as well as the freezing of more than Rs. 137 crores in over 50 bank accounts.
The ED’s investigation revealed that Vihaan Direct Selling had received substantial funds from investors through the sale of their products and services, which included wellness and healthcare products, energy products, and holiday packages. However, it was discovered that the company was running a Ponzi scheme, where the funds received from new investors were used to pay off the old ones, without any actual sale of the products or services taking place.
The investigation found that Vihaan Direct Selling had over 12 lakh registered members, who were lured into investing their money in the company through false promises of high returns on their investments. The company’s business model was found to be fraudulent, as it had no real products or services to sell, and was solely dependent on the continuous influx of new investors to sustain its operations.
The ED’s search operations have dealt a major blow to the scamsters, as it has frozen a significant amount of their ill-gotten wealth, and uncovered crucial evidence against them. The investigation is still ongoing, and more arrests and seizures are expected in the coming days.
It is crucial for investors to exercise caution while investing their money in any scheme or company, and to thoroughly research the company and its products or services before making any investment. It is also important for regulatory authorities to be vigilant and take strict action against fraudulent companies and Ponzi schemes to protect innocent investors from falling prey to such scams.