All three defendants had cases filed against them in Telangana, Andhra Pradesh and Karnataka for allegedly defrauding investors of 32 lakh.
The Directorate of Enforcement (ED) arrested three promoters of the AgriGold Group of companies on Wednesday, who were charged with money laundering and operating a Ponzi scheme, allegedly misleading 32 lakh investors out of Rs 6,380 crore. The three defendants, Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao and Avva Hema Sundara Vara Prasad, had cases registered against them in Telangana, Andhra Pradesh and Karnataka.
The defendants raised money from the public by promising to provide high interest rates for their investments or to provide built-up parcels and farmland for the sum invested. Venkata Rama Rao, along with his seven brothers and other associates, had created several shell companies to funnel investor money abroad, an ED official said, The Hindu reported.
AgriGold had hired several agents on commission so that people would invest with them. Of the 32 lakhs of investors, around 11.58 lakhs of people who were duped were from Andhra Pradesh, followed by 4.81 lakhs from Karnataka and 1.67 lakhs from Telangana. The company claimed to the ED that it owned only 5.5 lakh of parcels, of which 1.06 lakh of parcels were registered to investors.
Investors were not informed about the market value of the land, survey numbers and other details, nor did the company have permission from the Reserve Bank of India to collect deposits from the public.
Investors’ money was found to have been allegedly diverted to foreign countries and invested in other private companies owned by relatives of Avva Venkata Rama Rao. So far, the ED has estimated Rs 943.96 crore diverted to sectors such as electrical infrastructure, entertainment, food industry, travel agencies, chemicals, insurance, data processing, wood, software and other sectors.
The AgriGold group was also named to Paradise Papers Leak, where global data on the overseas holdings of various entities was released in 2017. The company had hired a law firm in the Cayman Islands to help them funnel money overseas, claimed the ED.
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