New Delhi (13.03.21): Ebiz.com Private Limited and its Managing Director Pawan Malhan and 26 others stand accused of fraud and cheating in a PMLA Special Court.

On March 12, 2021, the ED filed a prosecution complaint against the accused for their involvement in multi-level marketing (MLM) pyramid fraud scheme.  

Earlier in 2019, the ED had already provisionally attached various movable/ immovable properties worth around ₹277.97 Crore of Pawan Malhan, his son Hitik Malhan and others. The provisional attachment has been confirmed by the PMLA Adjudicating Authority and the ED has taken possession of those assets.

The ED's investigation was initiated on the basis of the FIRs registered by the Telangana State Police against EBIZ.COM Pvt. Ltd. and its Directors/Associates for cheating the common public by propagating a pyramid scheme and luring the gullible public through the false hope of earning quick & easy money.

The MLM pyramid scheme promoted the sale of worthless products like  Computer Education packages (which were downloaded freely from the internet), cheap suit lengths, etc. These products were namesake in nature. The primary purpose for which the members were joining the scheme was to get a commission from enrollments and not for the products.

The accused, according to the ED, extensively advertised their commission model in which very high commissions were paid to sponsoring members for enrollment of new members in their downlink of the pyramid. The accused used to hold large conventions in which top-rung members of the pyramid scheme would give lofty speeches and display their newfound wealth earned from commissions and encourage thousands more to join this scheme.

The scheme was advertised through social media platforms like Facebook pages & groups. The enrollment fee paid by new members was used to pay commission to older members. The balance was being siphoned off by the Malhan family. The scheme destroyed the hard-earned savings of thousands of gullible public.