Mumbai: The Directorate of Enforcement (ED) has conducted searches at Ahmedabad during the weekend for alleged FEMA violations by VIPS Group of Companies and Global Affiliate Business managed and controlled by Vinod Khute and his relatives resulting in seizure of cash of ₹2 crore and bank balance of ₹10.38 crore.
The ED has already seized ₹3.14 crore in cash and frozen bank balance of ₹28.60 crore in the alleged money laundering case against Khute and his family members.
The ED had last month conducted searches at Pune and Ahmednagar premises of the company and frozen bank balances of ₹18.54 crore.
The probe agency had initiated FEMA investigation against alleged fugitive Khute who is hiding in the UAE. He is allegedly the mastermind of various illegal trade, crypto exchange and wallet services being operated through VIPS Group of Companies and siphoning off the proceeds of the transactions through hawala to various foreign countries.
According to ED officials, Global Affiliate Business sells products through an e-commerce shopping portal, and its app by the same name is available on Google Play Store and Apple Store.
Unauthorised multi-level marketing schemes
The probe into the firm revealed that the company has been running illegal and unauthorised multi-level marketing schemes where consumers opt for the scheme to become members and refer other consumers on the application and website and a commission on the investment was credited in mobile wallet.
The probe agency alleged that funds of ₹125 crore were collected from various investors by the company by marketing the business of Kana Capital engaged into brokerage under which various clients trade in forex, crypto, stocks, etc.
The ED investigation further led to the Pune-based Dhanashree Multi State Co-op Credit Society Limited, another venture floated by Khute to lure investors in fake schemes wherein he was offering high interest rates of 2–4% per month. The investigation also revealed that several crores of investment from various clients and investors had been collected in cash and Global Affiliate Business accounts and were siphoned out of the country through hawala channels and shell companies. ED officials identified ₹125 crore collected through banking channels and cash from investors lured with high interest and commission income.
The anti money laundering investigation based on the financial trail led to freezing of ₹17.22 crore bank balances under the provisions of FEMA violations.