The case had shot to prominence last year after the Enforcement Directorate (ED) got a first-time access to freeze Swiss bank accounts of Sayed Mohammed Masood, Chairman of Mumbai-based 'City Limousine', whom the agency is probing for floating illegal ponzi (fraud investment plans) schemes by promising extraordinary returns which were not honoured.
The agency is probing the case under the Prevention of Money laundering Act (PMLA) alongside the Economic Offences Wing of Mumbai Police.
Subsequent to pressing these laundering charges, the ED provisionally attached a flat in Pune's Wakad area in the name of Ryewood Retreat Motels, which has Masood as its Additional Director.
The Adjudicating Authority, under Chairman K Raamamoorthy, for PMLA offences termed the purchase of the flat "as proceeds of crime" and that it is involved in money laundering by defrauding the hard earned money of gullible investors.
The probe agencies had filed a charge sheet in this case last year stating that close to 28,000 complaints from the investors were received by them in this regard and Masood's companies had cheated investors "to the tune of more than Rs 500 crore".
The charge sheet filed by EOW and taken cognisance by the ED, states the modus operandi of this fraud scheme case.
"...the companies (floated by Masood) had lured general public into various schemes offering astronomical returns to the tune of above 48 per cent interest per annum and after payment of the promised returns for some period, his companies failed to keep their promises and the cheques issued to various investors had bounced.
"Investigations conducted so far has revealed that more than 40,000 cheques issued to the investors had bounced due to paucity of funds and the fact of insufficient funds in the banks clearly demonstrates that the investor's money has been diverted by Masood for purposes other than declared business activities and thereby cheating the public at large. This had culminated into cheating of the investors/public by not paying the promised returns to the investors," the charge sheet said.
The Adjudicating Authority is the appellate mechanism for affected parties who are at the receiving end of strict enforcement action like attachment or sealing of properties by agencies like the ED.
The attachment, under PMLA, ensures that seized properties cannot be used by the accused and he or she cannot take any benefits from these assets.