The Directorate of Enforcement (ED) has taken major action in the Multilevel Marketing Scheme case involving M/s KBC Multitrade Pvt Ltd & Ors under the Prevention of Money Laundering Act (PMLA) of 2002. On March 19, 2024, the ED provisionally attached movable and immovable properties across Maharashtra and Rajasthan, mainly in the districts of Nashik, Thane, Sindurgarh, and Pali, valued at Rs. 84.24 crore.
Assets Seized: ED’s Action against KBC Multitrade
The assets subject to temporary attachment include a wide range of properties and financial instruments. These possessions include properties gained through benami arrangements, which are assets purchased by individuals but held in the name of others to conceal ownership. Furthermore, the ED has identified DEMAT accounts, which are electronic accounts used to store and trade securities such as stocks and bonds. Postal savings, another type of financial investment, have also been included on the list of frozen assets. Furthermore, the attachment includes tangible items such as silver and diamond jewelry/bullion, which demonstrate the accused’s enormous wealth. Finally, bank account balances were seized, confirming the presence of large financial resources owned by the promoters Bhausaheb Chhabu Chavan and Smt. Arati Bhausaheb and their associates.
The Enforcement Directorate (ED) initiated the probe after receiving a series of First Information Reports (FIRs) from Parbani, Nashik, and other areas in Maharashtra. These FIRs were filed under various sections of the Indian Penal Code, 1860, against M/s KBC Multitrade Private Ltd. and its principals, Bhausaheb Chhabu Chavan and Arati Bhausaheb Chavan. These legal complaints are most likely related to allegations of financial irregularities, fraudulent acts, or other illegal conduct attributed to the aforementioned companies and people. The ED’s engagement represents a concentrated effort to investigate and resolve the alleged offenses detailed in these FIRs, intending to protect the integrity of financial transactions and combat illegal activities in the realm of multilevel marketing schemes.
The MLM Deception: ED’s Revelations
The Chavan family and their co-accused major agents of the corporation were involved in a well-planned conspiracy, as the Enforcement Directorate’s (ED) investigations demonstrated. M/s KBC Multitrade Private Limited and M/s KBC Club and Resorts Private Limited lured gullible people into their web of deceit by operating under the pretense of Multilevel Marketing (MLM). They enticed the public into their plan by offering handsome returns on investments, only to swindle them of an astounding amount that exceeded Rs. 200 crore.
The MLM scam, a fraudulent business model in which people were tricked into becoming members by paying fees under numerous alluring packages and schemes, was at the heart of their illegal operation. By providing alluring incentives, including commissions from Binary and Matrix trades, prizes, rewards, and free products, the scammers took advantage of the gullibility of gullible investors. Members received commissions in a hierarchical system that favored individuals at the top of the pyramid, providing an incentive for them to recruit more members and continue the program. It’s crucial to remember that this operation had no real commercial activity going on; rather, it was just a front used to hide their illegal goals and carry out more fraud.
Previous statements from the main accused, recorded by the ED in Parbani District Prison, revealed that the directors/promoters of M/s KBC Multitrade Private Ltd., Bhausaheb Chhabu Chavan, Arati Bhausaheb Chavan, and other co-accused used membership fees collected from the public to acquire immovable assets, gold jewelry, and stock investments.
Previously, on 08.03.2024 and 11.03.2024, the ED conducted searches at 11 official and residential premises for the promoters of KBC Multitrade in Nashik and Thane (Maharashtra) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, restraining the accused’s various movable assets.
The ED’s investigation into this incident is ongoing, with additional inquiries being undertaken for KBC Multitrade and the individuals linked.
