ED freezes bank deposits, cash worth over Rs 18 cr in FEMA probe against Pune-based firm, associates

Bank deposits and cash worth more than Rs 18 crore of a Pune-based company and a linked entity have been frozen after the ED recently raided them in a case linked to alleged foreign exchange violation, illegal crypto exchange trade, wallet services and "hawala", the agency said on Friday.

The searches were carried out under the Foreign Exchange Management Act (FEMA) on May 25 in Pune and the neighbouring district of Ahmednagar in Maharashtra against the VIPS Group of companies and Global Affiliate Business "managed and controlled" by Vinod Khute and his relatives, the Enforcement Directorate (ED) said.

Khute, the agency said in a statement, is presently living in Dubai and is the "mastermind" of various illegal trade, crypto exchange, wallet services being operated through the VIPS Group and the proceeds were being "siphoned off" through "hawala" to various foreign countries.

The ED said Global Affiliate Business sells products through e-commerce portals and an app called "Global Affiliate Business" available on Google play store as well as on Apple store.

"Global Affiliate Business has been running an illegal and unauthorised multi-level marketing scheme, wherein if a person opts for the scheme as a member and refers other consumers/clients on the app or website, a commission on his investment/expense on the app is credited in his account or wallet," the agency said.

An amount of Rs 125 crore was collected from various investors in this way, it added.

Global Affiliate Business has also been "marketing" the business of Kana Capital, a brokerage firm through which clients trade forex, crypto, stocks etc.

"Kana Capitals, in consultation with directors of VIPS Group of companies, also conducts various weekly training programmes for clients of Global Affiliate Business for investment in VIPSWALLET, VIPSFINSTOCK for purchase and sale of crypto, stocks and to lure other consumers/clients into illegal and unauthorised multi-level marketing schemes," the ED alleged.

It said D Dhanashree Multi-State Cooperative Credit Society Limited, Pune was another venture recently floated by Khute to "lure" investors in "fake" schemes where he offered a 2-4 per cent interest per month.

"Investment to the tune of crores of rupees from various clients/investors had been collected in cash also and the proceeds so collected by Global Affiliate Business had been siphoned off out of the country through hawala channels as well as through various shell companies.

"More than Rs 125 crore have been collected through banking channels as well as in cash from various investors in the garb of investment for earning interest/commission income," the federal agency said.

Based on the money trail, a sum of Rs 17.22 crore kept in the form of bank balances plus some cash, worth a total of Rs 18.54 crore, has been frozen under the provisions of the FEMA.