The ED, in its counter affidavit opposing a bail petition by Highrich MD Kolatt Dasan Prathapan and Sreena Prathapan, revealed that a preliminary investigation indicated that the accused were enticing deposits through an illicit ‘money circulation scheme’, disguised as the sale of grocery products. The public was being deceived with promises of high commissions through simple enrollment of new members.
The Director and CEO of Highrich, along with a Driver has escaped the raid and arrest by the Enforcement Directorate ( ED ). The arrest evasion occurred in a black car, as per reports
Read More: Highrich MLM Scam: Director and CEO evade ED Raid and Arrest
The Enforcement Directorate ( ED ), currently investigating the Highrich fraud case, emphasized the need for a thorough and effective inquiry during its submission to the special court for Prevention of Money Laundering Act ( PMLA ) cases in Kochi on Monday. This financial scam is purportedly one of the largest in the state.
According to the agency, the petitioners were not operating a substantial income-generating business with the collected deposits. The affidavit stated that the alleged direct selling of products to members did not yield significant income, and the majority of funds collected from new members were redirected as incentives to existing members. The rest of the money was siphoned off as the petitioners’ profit.
ED highlighted that the public, unaware of the true nature of the scheme, was induced to join the company for product purchases and investments, resulting in the loss of their hard-earned money.
The agency pointed out that the products were being used to camouflage the fraudulent MLM Pyramid/Ponzi Scheme as a legitimate direct selling company. The promoters were allegedly organizing grand conventions and showcasing a luxurious lifestyle on social media platforms to attract unsuspecting investors.
Furthermore, the ED asserted that the petitioners were involved in promoting and trading cryptocurrency internationally using crypto coins. According to the scheme, investors were allotted tokens upon investing in the petitioner’s HR cryptocurrency, allowing them to trade within their exchange.
However, the agency revealed that no exchange had been established to date, and the petitioners had garnered crores of rupees by offering high-interest rates to deceive the public. The affidavit concluded by stating that the funds amounting to Rs 212,45,98,666 in the petitioner’s company’s bank accounts were considered proceeds of crime.
In a separate case, the ED accused the petitioners of collecting substantial sums under the guise of investments for OTT platforms, with the Director General of Goods and Services Tax Intelligence, Cochin, having previously booked a case against Prathapan for tax evasion of Rs 126.55 crore.
The Kerala High Court has scheduled the case for hearing on Feb 2.
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