Conviction of Director-cum-Promoter and two up-line members of Gwalior based Chit Fund Company for duping 500 people in a MLM scheme
Bhubaneswar, (Odishabarta ) Honorable OPID Court, Balasore, delivered the judgment on 13.03.2024 in EOW PS case No. 01 dtd. 31.01.2022 U/s. 406/420/467/468/471/120-B IPC /Sec 66 of IT Act / Sec 4,5 & 6 PCMCS (Banning) Act / Sec 6 of OPID Act, 2011, holding the accused Babu Singh Kushwaha, Director-Cum-Promoter of M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. guilty and sentenced him to undergo RI for 07 (seven) years and fine of Rs.3.45 lakhs. Similarly, up-line members Sarat Kumar Nayak and Pravat Ranjan Das were also held guilty and sentenced to undergo Rigorous Imprisonment for 05 (five) years and fine of Rs.1.25 lakhs each. On default of fine all the convicts will undergo further imprisonment of 01 (one) year each. Further, M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. represented through its Director Babu Singh Khushwaha was found guilty and sentenced to pay fine of Rs.2 lakhs. The above referred case was registered pursuant to an enquiry conducted by EOW on a petition filed by Chandra Kanta Dash & others against M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. and its Director & Promoter on the allegation of duping as many as 500 gullible depositors of more than Rs.10 Crores under false promise of high returns on their deposits/investment in different schemes launched by the company. M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. is registered with ROC, Gwalior (Madhya Pradesh). The convict Babu Singh Kushwaha is its lone Director. The said company under various lucrative schemes/packages promoted direct selling of various household goods/Electronic goods with high returns having cash back offers. The collection of deposits by the company under the cover/ mask of direct selling was nothing but running of Ponzi schemes. The business model of M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. is pyramidal MLM in nature, working as a MLM in which the early entrants are profited, and as the number of investors/ depositors increases, the scheme collapses at certain point. Thus, the new/ down line members are made to suffer. Thus the fraud was camouflaged under the name of Direct Selling/Marketing of different commodities. M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. had floated various lucrative schemes/ packages under which products like LED TV, Smart TV, Trolley bag, Mixture Grinder, LED Smart Fan are being offered to the public under direct selling with high returns having cash back offers like10% matching income/bonus for enrolling investors down line on left are right side. – Daily cash back for 250 days. – Booster income /Bonus for every two direct sponsors. – As per the brochures circulated by the company there are 8 No. of schemes ranging from the investment amount of Rs. 1500/- to Rs. 1,00,000/- carrying daily cash back offer of Rs. 11/- to Rs.800/- for a period of 250 days. – Besides this, the company also offered various reward incomes like star Achiever to Emerald Star Achiever with reward income of Rs. 5000/- /Mobile phone / Furniture depending upon the target achievement within 30 days to 150 days for enrolling down line depositors. As found on investigation, the Company M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. through its Director Babu Singh Kushwaha and up-line members Sarat Nayak and Pravat Ranjan Das has collected Rs.10 Cr. from more than 500 investors. The Company had its activities mainly in Balasore and Bhadrak Districts and their peripheral areas. During investigation Babu Singh Kushwaha was arrested from Gwalior whereas Sarat Kumar Nayak and Prabhat Ranjan Das were arrested from Balasore. Two Charge sheet were filed in the case on 08.06.2022 and 12.12.2023. -Shri Pranab Kumar Panda, Spl. PP, OPID Court, Balasore was conducting the prosecution. -DSP Ashis Kumar Mishra was the Investigating Officer of the case.
