Intensifying its crackdown on chit fund fraudsters, the Economic Offences Wing (EOW) of Odisha arrested the prime accused Auroxa Deal Multi-trade (OPC) Private Limited chit fund scam for alleged involvement in defrauding the investors to the tune of Rs 10 crore.

Babu Singh Kushwaha, director and promoter of the chit fund company was arrested from Gwalior in Madhya Pradesh and was brought under transit remand to Bhubaneswar.

The accused conniving with other personnel of the bogus money circulation company had duped several investors on the pretext of returning a high rate of interest on their deposits under various attractive schemes launched by the company. The amount defrauded by Kushwaha ran into more than Rs 10 crore.

The EOW took up the investigation of the matter Chandra Kanta Dash & others had filed a complaint in this regard, said EOW officials.

The Auroxa Deal Multi-trade Private Limited was registered with Registrars of Companies, Gwalior during May-2019 with the arrested Kushwaha operating it as its director. The bogus company under various lucrative schemes and packages promoted direct selling of various household goods, electronic goods with high returns with cash back offers.

The deposits collected by the company under the cover of Direct Selling are nothing but Ponzi Schemes and Binary Schemes.

The business model was of a simple pyramid structure, works as a binary scheme in which the early entrants earn money and as the number of investors and depositors increases, the scheme collapses at a point of time. Thus, the deceit and fraud is camouflaged under the name of Direct Selling Marketing and business, said EOW officials.

The ponzy firm was functioning in a rented building in Sahadev Khunta area in Balasore during 2019-20. The functionaries of the unit including Kushwaha by way of wide publicity had motivated the investors to join in various business packages. Little knowing the genuineness of the schemes, people invested only to be taken for a ride. The fraud perpetrated by the company was worth over Rs. 10 crore and over 500 investors had been duped by it, they added.