Four IIT-Kharagpur dropouts are among nine persons arrested by Cyberabad police in connection with floating a fraudulent multi-level marketing company and enrolling over 40, 000 members from both Telugu States and collecting ₹30 crore in the past two years.
The Economic Offences Wing of Cyberabad booked the accused under relevant sections of prize chits and Money Circulation Schemes (Banning) Act, 1978 and remanded them to judicial custody.
Cyberabad Commissioner of Police V.C. Sajjanar said following a complaint, Shamirpet police registered a case against the money circulation firm under the name of ‘Pro Healthywayz International’ in Malakpet and arrested its 23-year-old CEO, Mohammed Rizwan Younus of Dabeerpur here along with two directors, including Younus’ father Mohammed Ishaq (61), a retired employee, and Bhattu Saikonda Harshavardhan Raju (27), an IIT dropout and a native of Kurnool.
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The company’s bank accounts with a balance of ₹40 lakh was frozen.
The other arrested are Pappala Sai Charan (24) of Visakhapatnam; Vankudothu Venu Naik (26) of Warangal; Bhukya Anil Kumar (26) from Warangal, all dropouts from IIT-Kharagpur; Aluru Naresh (27) from Kurnool; Yerraganti Sathya Manikanta (24) of Visakhapatnam and Konda Srinivasulu (27) from Kurnool.
Earlier, they worked for two companies in Chennai and then decided to start their own firm, Mr Sajjanar said. The accused purchased substandard herbal products from Rajasthan, Ludhiana and Hyderabad.
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There are around 40,000 distributors of the firm in Telangana and Andhra Pradesh, the Commissioner said, and for enrolment, the distributor has to pay a minimum amount of ₹4,000. Then the distributor targeted youth, especially unemployed, and retired people.
A few distributors who spoke to The Hindu said they will continue with their activities and claimed that the arrests were fake.