Managing Director of Noida-based multi-level marketing company "e-Biz" Pawan Malhan and his son Hitikh Malhan have been arrested by the police here for allegedly cheating public of about Rs 5,000 crore across the country.
Acting on a complaint by a city resident, who is among those allegedly cheated, the Cyberabad police arrested the two in New Delhi on Monday and produced them in a court here on Tuesday, a police official involved in the investigation of the case told PTI.
The case was registered under various Indian Penal Code sections and Prize Chits and Money Circulation Schemes (Banning) Act 1978.
A case had also been registered against the company by the Enforcement Directorate earlier, police said.
The business model adopted by eBiz was a simple pyramid scheme in which the early entrants earn money and as the number of representatives increases, a police release said.
Till now deposits of Rs. 389 crores had been frozen in the bank accounts of eBiz.Com Pvt. Ltd company, its Directors and accused persons and the company's head office in Noida in Uttar Pradesh had been sealed, it said.
Further detailed investigation was underway, it added.
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