A jewellery chain based in Trichy, with branches in various locations in Tamil Nadu and Puducherry, including Chennai, is currently being investigated by the Enforcement Directorate for allegedly operating a Ponzi scheme and defrauding investors of Rs 100 crore. The agency has conducted searches on the properties of individuals associated with the company.
According to reports, the company’s stores abruptly closed in October, leading to complaints and a subsequent case being registered against the owner, identified as Madhan, by the Economic Offences Wing in Trichy. Lookout notices were also issued against Madhan and his wife earlier this month.
In a statement released on Wednesday, the Enforcement Directorate announced that it was investigating the case registered by the Economic Offences Wing. On Monday, they conducted searches under the Prevention of Money Laundering Act (PMLA), 2002, targeting individuals accused of running the Ponzi scheme. During these searches, Rs 23.7 lakh in cash, 11.6 kg of gold jewellery and bullion, and incriminating documents were seized.
The statement revealed that Pranav Jewellers had collected Rs 100 crore through a gold investment scheme that promised high returns. However, not only did the promised returns fail to materialize, but the invested amount was also not returned to the investors.
Further investigation uncovered that the company and the accused individuals diverted funds to shell entities and accommodation entry providers, disguising them as purchases of bullion or gold ornaments. Accommodation entry providers facilitate fraudulent activities or help evade taxes by incorporating unaccounted income into legitimate transactions.
The Enforcement Directorate stated that the searches revealed some suppliers listed in Pranav Jewellers’ books were actually accommodation entry providers. During the investigation, these suppliers admitted to providing accommodation entries amounting to over Rs 100 crore to the company. They also confessed to providing cash to the accused in exchange for bank payments.
The investigation into this alleged Ponzi scheme continues as authorities work to bring justice to the defrauded investors.
