The Directorate of Enforcement (ED), in its investigation into alleged FEMA violations, has seized cash and frozen bank balances amounting to ₹18.54 crore. The ED conducted searches at Pune and Ahmednagar last month targeting VIPS Group companies and Global Affiliate Business, which are managed and controlled by Vinod Khute.
Mastermind Khute suspected to be hiding in UAE
It is suspected that Khute is currently hiding in the UAE and is believed to be the mastermind behind several illegal trade activities, including crypto exchange and wallet services. These activities are being conducted through the VIPS Group of companies, and the proceeds of these transactions are allegedly being siphoned off to various foreign countries through the use of hawala channels.
The modus operandi
According to officials from the ED, their investigation revealed that Global Affiliate Business operates as an affiliate program, promoting business through affiliate marketing and selling products via an E-Commerce Shopping Portal accessible through the mobile application called “Global Affiliate Business,” which is available on the Google Play Store and Apple Store. The probe uncovered the presence of illegal multi-level marketing schemes, wherein participants join the scheme, refer others through the application and website, and earn a commission on their investments credited to their mobile wallet. The Global Affiliate Business collected funds amounting to ₹125 crore from various investors by marketing the business of Kana Capital, which is engaged in brokerage services for trading forex, crypto, stocks, and more. A senior probe official further explained that Kana Capitals conducted weekly training programs for Global Affiliate Business clients, instructing them on investing in VIPSWALLET, VIPSFINSTOCK for buying and selling crypto and stocks, as well as techniques for enticing other consumers into participating in illegal and unauthorised multi-level marketing schemes.
ED investigation led to Pune-based venture
As a result of the ED investigation, the authorities were led to Pune-based Dhanashree Multi State Co-op Credit Society Limited, which was another venture established by Khute to deceive investors with fraudulent schemes. In these schemes, Khute enticed investors by offering high monthly interest rates of 2%-4%. The investigation further uncovered that a significant amount of investment, amounting to several crores, had been collected from various clients and investors in cash. Additionally, funds from Global Affiliate Business accounts were illegally transferred out of the country through hawala channels and shell companies. ED officials have identified ₹125 crore that was collected from investors through both banking channels and cash, enticing them with promises of high interest and commission income.
Bank balances worth ₹17.22 crore frozen
Based on the financial trail, the anti-money laundering investigation resulted in the freezing of bank balances amounting to ₹17.22 crore. This action was taken under the provisions of FEMA violations, as part of the efforts to combat money laundering activities.
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Published on: Friday, June 02, 2023, 11:59 PM IST