New Delhi: The Enforcement Directorate (ED) has arrested 3 promoters of the Agri Gold Group of companies in connection with Ponzi scam amounting to ₹6,380 crore collected from more than 32 lakh investors in six States.
The probe agency produced Avva Venkata Rama Rao, Avva Venkata Seshu Narayana Rao, and Avva Hema Sundara Vara Prasad before the ED court in Hyderabad which remanded them to 14 days of judicial custody.
The probe agency revealed that promoters had set up off-shore accounts and diverted funds to them.
ED had initiated investigation based on multiple FIRs lodged in the States of AP, Telangana & Karnataka. The scam was perpetrated by Avva Venkata Rama Rao through Agri Gold Group of Companies. Avva Venkata Rama Rao had earlier worked in the Golden Forest CIS Fraud scheme. Having learnt the tricks of the trade in that scheme, he hatched a well-planned conspiracy and along with his seven brothers and other associates setting up more than 150 companies and started collecting deposits from general public with a promise of providing developed plots/farm lands OR withdrawal at a high rate of return on maturity/pre-term.
Agents collected Rs 6,380 crore from 32 lakh investors
The group collected deposits illegally from across the country and for this, it employed thousands of commission agents to lure people with various schemes for hefty commission and managed to collect ₹ 6380 Crore from 32,02,628 such investor accounts. In the end, the gullible investors neither got plots nor could recover their deposits.
As per modus operandi, they would lure the gullible public to join as depositors in their schemes and encourage them to pay the desired deposits either directly or through the agents under the pretext of real estate deal. They tried to color it as a real estate business, but in reality it was an unregulated unlicensed collective investment scheme.
The Agri Gold Group of Companies did not obtain permission from RBI to collect such deposits.
32 lakh investors duped
Although the accused collected deposits from 32 lac investors, they never developed lands sufficient to give plots to all the investors. Even by their unverified claims, at the end they had only 5.5 lac plots available with them as shown below.
Considering the huge discrepancy in the amount of land available, the Group should have used all their resources in identifying, buying and developing more land parcels. Instead, Avva Venkata Rama Rao and his family went on a siphoning spree and illegally diverted the public deposits and invested in myriad verticals and in private companies which were directly owned by their family.
Accused promoters diverted public deposits to other areas
Investigation under PMLA also revealed that the accused also set up companies abroad and diverted large amounts of funds to off-shore entities. Their names also figured in the Paradise Leaks and they had incorporated companies with the help of the infamous Mossack Fonsenca in Cayman Islands.
Earlier, searches were conducted at the residences of Avva Venkata Rama Rao and other directors including the residences of auditors at Vijayawada and Hyderabad. Various property related documents, cash amount of ₹ 22 Lakh, digital devices and other documents were recovered and seized.
