HYDERABAD: Continuing its crackdown on fraudulent money circulation schemes, the Cyberabad Police on Tuesday busted a scam pulled off by three of a family that cheated over 7 lakh people across the country of nearly Rs 1,000 crore. Police arrested Hitik Malan, 31, one of the founders of eBiz Private Ltd, a multi-level marketing (MLM) company operating out of Noida, and froze Rs 70 crore of firm’s bank deposits.
The venture collected money from customers in exchange for e-learning courses and promised them returns if they admitted new members to the scheme. The racket came to light in the city after degree student S Vivek filed a complaint with the police.
The Jagtial resident paid Rs16,820 to become an eBiz member as he thought the e-learning courses would help him in his career. When he did not get any returns despite enrolling a few customers, he questioned the firm’s employees who told him that he would have to enrol more members to get his money back. Even after he convinced eight persons to join the programme, he wasn’t given any returns, following which he approached the police.
Cyberabad Police Commissioner VC Sajjanar said cases had been registered against the firm in Warangal and Adilabad districts and other parts of the country in the past. The firm run by Pavan Malhan, his wife Anitha Malhan and their son Hitik Malhan organises motivational lectures targeting students and unemployed youth and lures prospective customers promising them huge returns.
eBiz has a simple pyramid business model that benefits early entrants, but is loss-making for lower rung members. eBiz’s office at Noida has been sealed and police are on the look out for Pawan Malhan and Anitha Malhan.