Odisha OPID Court Awards 7-Yr Jail Term To Gwalior Firm Director; 2 Others Get 5-Yr RI For Duping 500 People In MLM Scheme

Balasore: A court in Odisha’s Balasore on Thursday sentenced a man from Gwalior to rigorous imprisonment for seven years for cheating over 500 people in a multi-level marketing (MLM) scheme.

The designated Odisha Protection of Interest of Depositors (OPID) court also imposed a fine of Rs 3.4 lakh on Babu Singh Kushwaha, Director and promoter of M/s Auroxa Deal Multi-trade (OPC) Pvt. Ltd.

This apart, up-line members Sarat Kumar Nayak and Pravat Ranjan Das were also held guilty by the court and sentenced to rigorous imprisonment for five years and slapped a fine of Rs 1.25 lakh each.

As per the order of the court, on default of fine all the convicts will undergo further imprisonment of one year each. The company represented through Khushwaha was found guilty and directed to pay fine of Rs 2 lakh.

As per information, the case was registered following an enquiry conducted by the Economic Offences Wing (EOW) of Odisha police on a petition filed by Chandra Kanta Dash and others against the company and its director. They were accused of duping some 500 depositors of more than Rs 10 crore under false promise of high returns on their deposits and investment in different schemes launched by the company, registered with ROC, Gwalior in Madhya Pradesh.

The convict Kushwaha is the lone director of the company which promoted direct selling of various household goods and electronic goods promising high returns having cash back offers. The collection of deposits by the company under the cover or mask of direct selling was nothing but running of Ponzi schemes. The business model of the company is pyramidal MLM in nature, working as a MLM in which the early entrants are profited, and as the number of investors and depositors increases, the scheme collapses at certain point. Thus, the new and down line members are made to suffer. The fraud was camouflaged under the name of direct selling and marketing of different commodities.

The company had floated various lucrative schemes and 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 like 10% matching income and bonus for enrolling investors downline.

As per the offers, there was daily cash back for 250 days and booster income and bonus for every two direct sponsors. As per the brochures circulated by the company, there are eight number 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, 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.

Investigation revealed that the company through its director Kushwaha and up-line members Sarat Nayak and Pravat Ranjan Das has collected Rs 10 crore from more than 500 investors. The company had its activities mainly in Balasore and Bhadrak districts and their peripheral areas.

During investigation, Kushwaha was arrested from Gwalior whereas Nayak and Das were nabbed from Balasore. Two charge sheets were filed in the case on June 8, 2022 and December 12, 2023.