Bhubaneswar: The Economic Offences Wing (EOW) of the Odisha Crime Branch has arrested Babu Singh Kushwaha, a chit fund company director and promoter, in a Rs 10 crore fraud case, officials said here Tuesday.
Kushwaha, promoter of Auroxa Deal Multitrade (OPC) Pvt Ltd, has been arrested from Gwalior in Madhya Pradesh and is being brought to Bhubaneswar on the strength of transit remand, the EOW officials said.
During investigation, the EOW found that the company Auroxa Deal Multitrade (OPC) Private Limited was functioning in a rented building in Balasore town of Odisha during the year 2019-20.
At that time, Kushwaha and his associates had collected more than Rs 10 crore from around 500 investors by promising them high returns and duped them subsequently.
They duped the investors under various lucrative schemes on direct selling of various household goods/electronic goods with high returns having cash back offers.
The deposits collected by the company are nothing but ponzi schemes and binary schemes. The business model of the firm is a simple pyramid structure, works as a binary scheme in which the early entrants earn money and as the number of investors increases, the scheme collapses at a point of time.
Thus, the deceit and fraud is camouflaged under the name of direct selling marketing and business, the officials informed.
The chit fund company is registered with registrar of companies (ROC), Gwalior (Madhya Pradesh) during May-2019 and the accused Babu Singh is its only director.