Bhubaneswar: A man from Gwalior has been sentenced to seven years of rigorous imprisonment by a court in Odisha’s Balasore for cheating over 500 people in a multi-level marketing (MLM) scheme. Babu Singh Kushwaha, Director and promoter of M/s Auroxa Deal Multi-trade (OPC) Pvt. Ltd., was also fined Rs 3.4 lakh by the designated Odisha Protection of Interest of Depositors (OPID) court.
In addition, up-line members Sarat Kumar Nayak and Pravat Ranjan Das were found guilty and sentenced to five years of rigorous imprisonment each, with a fine of Rs 1.25 lakh each. The court ruled that in case of defaulting on the fine, all convicts will undergo further imprisonment of one year each. The company represented by Kushwaha was directed to pay a fine of Rs 2 lakh.
The case stemmed from an inquiry conducted by the Economic Offences Wing (EOW) of the Odisha police following a petition filed by Chandra Kanta Dash and others against the company and its director. They were accused of defrauding around 500 depositors of more than Rs 10 crore under false promises of high returns on their deposits and investments in various schemes launched by the company, registered with ROC, Gwalior in Madhya Pradesh.
Kushwaha, the sole director of the company, promoted direct selling of various household and electronic goods promising high returns with cash back offers. However, the court found that the collection of deposits by the company under the guise of direct selling was nothing but a Ponzi scheme. The business model operated as a pyramidal MLM, where early entrants profited at the expense of later investors, ultimately leading to a collapse of the scheme.
The company had introduced various lucrative schemes and packages offering products like LED TVs, smart TVs, trolley bags, mixture grinders, and LED smart fans under direct selling with high returns and cash back offers. Investigations revealed that the company, through its director and up-line members, collected Rs 10 crore from more than 500 investors, mainly in Balasore and Bhadrak districts and their surrounding areas.
Kushwaha was arrested from Gwalior during the investigation, while Nayak and Das were apprehended from Balasore. Two charge sheets were filed in the case on June 8, 2022, and December 12, 2023.
