The economic offences wing of the Cyberabad police on Saturday arrested nine youths, including four IIT-Kharagpur dropouts, in an alleged multi-level marketing (MLM) fraud case.

Eight of the arrested are aged below 30 years. According to Cyberabad police  Commissioner V C Sajjanar, 23-year-old Mohammed Rizwan Younus had registered a company named Pro Healthywayz International LLP two years ago with financial help from his father Mohammed Ishaq. Younus is a business management graduate.

IIT-Kharagpur dropouts Bhattu Saikonda, Harshavardhan Raju, Bhukya Anil Kumar, Pappala Sai Charan and V Venu Naik joined the company in various capacities, along with Aluru Naresh, Y Satya Manikanta and Konda Srinivasulu.

The company appointed 40,000 distributors in Telangana and Andhra Pradesh, collecting a minimum of Rs 4,000 from each. These distributors were assigned to lure unemployed youths, homemakers and retired persons into the marketing network.

The members would have to enroll two more people in the binary scheme under the garb of promoting the products of Pro Healthywayz. There were lucrative commissions and performance-based rankings that fetched them additional income.

The company sold 18 items that it procures from different companies in Rajasthan, Punjab and Telangana.

All the accused had worked in two companies earlier. While the first company was shut down, the second one that was in Chennai, could not pay them the commissions in time. With the experience they earned from their previous jobs, they floated the MLM to make quick money.

A case has been registered on the charge of cheating and various sections of the Prize Chits and Money Circulation Schemes (Banning) Act. The police seized three costly cars and Rs 40 lakh cash balance in the bank accounts of the accused.