Balasore Court Sentences Chit Fund Firm’s Staff to 7 Years in Jail for Duping 500 People of ₹10 Cr

Balasore: The OPID court in Balasore sentenced a Madhya Pradesh man and two upline members to rigorous imprisonment for running a fraudulent Multi-Level Marketing (MLM) scheme. The company, Auroxa Deal Multitrade (OPC) Pvt. Ltd., duped over 500 people in Balasore and Bhadrak districts to the tune of Rs 10 crore.

The court sentenced the company’s director, Babu Singh Kushwaha, to seven years of rigorous imprisonment and imposed a fine of Rs 3.4 lakh. The investigation revealed that Kushwaha, the sole director of the company registered in Gwalior, lured investors with promises of high returns on deposits and investments in various household and electronic goods.

The court also convicted upline members Sarat Kumar Nayak and Pravat Ranjan Das, sentencing them to five years of rigorous imprisonment each with a fine of Rs 1.25 lakh each. The company’s business model was identified as a classic pyramid scheme, where early investors profited while later entrants suffered financial losses.

The company disguised its fraudulent activities under the guise of direct selling. They offered lucrative packages with products like LED TVs, smart TVs, and other household items, promising high returns and cashback offers. These offers included daily cashback, bonuses for enrolling new members, and rewards for achieving enrolment targets within specific timeframes.

Following a complaint filed by Chandra Kanta Dash and others, the Economic Offences Wing (EOW) conducted an inquiry that exposed the company’s fraudulent practices. The investigation revealed that the company collected over Rs 10 crore from more than 500 investors. Based on the investigation, two charge sheets were filed against the accused in June 2022 and December 2023.