Wednesday, 28 December 2016

Qnet scam: Rs144 crore recovered so far


M
Jayprakash S Naidu
Jayprakash S Naidu 
Hindustan Times
Highlight Story

Former billiards champion Micheal Ferreira is one of the prime accused in the Qnet scam. (HT Photo )

The Economic Offences Wing (EOW) of the Mumbai Police, probing the money trail in the QNet case, has so far recovered Rs144 crore by freezing several bank accounts of the accused.
The EOW has appealed to investors to come forward and file complaints against the accused, so that their money can be returned.
An EOW official said five lakh investors were affected and that the scam runs into Rs1,000 crore. The Rs144 crore was recovered by freezing bank accounts of the accused and those bank accounts where the money was transferred. A lot of money has been sent out of the country, the official said. The official added that so far, they have received written complaints from only 400 victims from across India and have hence appealed to other investors to come forward.
In all, 30 people have been arrested. The official said Srinivas Rao Vanka, the director of Vihaan Direct Selling India Pvt. Ltd and Michael Joseph Ferreira, former world billiard champion, are among the key accused.

Tuesday, 27 December 2016

'MLM' Pitchman, Donald Trump, Picks 'MLM' Racketeer, Betsy DeVos, as Education Secretary.


Donald Trump,Betsy DeVos

http://www.newyorker.com/news/news-desk/betsy-devos-trumps-big-donor-education-secretary 

Earlier today my Blog was swamped with visits to 'Amway' pages. I then discovered that Donald Trump has named Betsy DeVos as Education Secretary.

As Donald Trump gets set to take over as the next US President, media attention has again suddenly focused on what he will do with his business and whether his largely-opaque money making activities represent a conflict of interest prohibited by the US Constitution.


During the campaign,Trump never stopped boasting of his tremendous wealth and business skills. He now claims he will hand complete control of his business to his three eldest children - Donald Jr, Ivanka and Eric. However, this move has done nothing to allay fears that Trump will exploit the presidency to his own financial advantage and to that of his associates.


To date, only a few journalists have delved into Trump's 'MLM' racketeering activities, but perhaps the appointment of Betsy DeVos will change this situation.






For decades, the Utopian 'MLM income opportunity'  lie has been used to bedazzle, blame and steal billions of dollars from, millions of constantly-churning victims around the world. 


See original image


http://www.motherjones.com/politics/2014/01/devos-michigan-labor-politics-gop







See original image



http://www.thedailybeast.com/articles/2016/10/22/blackwater-founder-erik-prince-loves-anti-iraq-war-donald-trump0.html 


The appointment Ms. DeVos to an influential position of government in itself represents a huge conflict of interest. For a start, she is a prominent member of one of the original 'Amway' cultic crime families, whilst her brother, Erik Prince (the instigator of 'Blackwater'), has been one of the most-controversial figures in the USA in recent years.


David Brear (copyright 2016)




Wednesday, 28 September 2016

Sudden volte-face by Ministry of Consumer Affairs regarding Multi-Level Marketing

It appears that the Ministry of Consumer Affairs has inadvertently issued the advisory to the State governments and Union territories to frame guidelines for the direct selling industry. In other words it is nothing but volte-face on the part of the Consumer Affairs Ministry to issue such contradictory and controversial advisory to the State governments.
Way back in 2003, the same Ministry of Consumer Affairs clarified to the Central Economic Intelligence Bureau, New Delhi over the letter of Wajahat Habibullah, secretary of Consumer Affairs which stated that his department was considering the issue of direct selling/network/multilevel marketing as an alternative form of marketing of goods and the entire issue was looked from that angle. It was further clarified that the Consumer Affairs letter does not cover pyramid structured marketing schemes and that area also does not fall within the purview of the department. 
Earlier, answering to a question on December 20, 2002, in Lok Sabha on RBI action against Amway India, Minister of State in the Ministry of Finance and Company Affairs Shri Anandrao V Adsul stated that the RBI after once again examining the matter on the representation of Amway, had made it clear that the Amway’s activities attracted the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The minister also stated that the RBI had forwarded a report in this regard to the police authorities who are empowered under the Act for taking necessary action.
A quick glance at the definition of money circulation scheme under the provisions of the Prize Chits And Money Circulation Schemes (Banning) Act, 1978 reveals:
Section 2(c): “Money circulation scheme” means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the conservation for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.
Section 10 of Act says that all offences under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 are cognizable offences. Cognizable offence means police have to initiate action without any complaint from victim or loser or any person.
The Division Bench of the Andhra Pradesh High Court in 2007, held that from the whole analysis of the Amway India’s business scheme and the way in which it is structured it is quite apparent that once a person gets into this scheme he will find it difficult to come out of the web and it becomes a vicious circle for him. In any event the petitioners have not specifically denied the turnover they are achieving and the income they are earning towards the initial enrollment of the distributors, the renewal subscription fee and the minimum sales being achieved by the distributors as alleged in the counter affidavit. By no means can it be said that the money which the first petitioner is earning is not the quick/easy money. By promising payment of commission on the business turned out by the down-line members sponsored either directly or indirectly by the up-line members (which constitutes an event or contingency relative to enrollment of members), the first petitioner is earning quick/easy money from its distributors, apart from ensuring its distributor earn quick/easy money. Thus the two ingredients are satisfied in the case of promoter too.  We are, therefore, of the considered view that the scheme run by the petitioners squarely attracts the definition of “Money Circulation Scheme” as provided in Section 2(c) of the Act. (Para 35).
The Supreme Court of India in the case of Kuriachan Chacko Vs. State of Kerala (2008) 8 SCC 708 held: “The Kerala High Court also upheld the argument of the prosecution that the Scheme was a "mathematical impossibility". The promoters of the Scheme very well knew that it is certain that the Scheme was impracticable and inworkable, making tall promises which the makers of the promises knew trully well that it could not work successfully. It could work for some time. These schemes are like "Paul can be robbed to pay Peter" but ultimately when there is a large mass of Peters, they will be left in the lurch without any remedy as they would by then have been deceived and deprived of their money. (para 41)”.
The High Court of AP in the case of Speak Asia online Vs. State of A.P. CRLP No.5626/2011 heldthat mere informing a scheme, which covered under the money circulation scheme and enrolling members as subscribers, itself is an offence. It is not necessary to further elaborate on the same, since the Sections are unambiguous and clearly indicate the acts which attract an offence.
When the Indian judiciary unequivocally held that enrollment of members attracts the provisions of the PCMC Act and Amway India has exactly been doing that in its business scheme, how the Ministry of Consumer Affairs could turn volte-face and issue advisory to the Statement governments and Union territories for framing guidelines for direct selling industry.
Moreover, the Andhra Pradesh State Government way back in 2008 issued GOMS No 178 restraining Amway India from publishing any material/advertisements containing such material connected with any Prize Chits and Money Circulation Scheme promoted or conducted in contravention of the provisions of the PCMCS Act. The GO also declared that every copy of the newspaper and every copy of the publication containing such material or the advertisement to be forfeited to the State government of Andhra Pradesh.
The official websites of the police departments of Andhra Pradesh and Telangana States warned people not to join the schemes of Amway and others and lose their hard-earned money. The websites also warned people to report to the police in case they suffer any loss due to joining such schemes.
When the issue is crystal clear that the Amway India and other companies under the aegis of Indian Direct Selling Association are into the illegal activities, how the State government could frame guidelines as per the advisory of the Ministry of Consumer Affairs when Amway and other IDSA members are promoting illegal Money Circulation Schemes in the name of direct selling.

Wednesday, 21 September 2016

Ferreira rejected bail in QNet scam

New Delhi: Padma Bhushan Michael Ferreira, former world Billiards champion is all set to be arrested after the Supreme Court on Wednesday rejected Anticipatory Bail applications of all prime accused in the QNet scam.
The Supreme Court rejected the bail applications of five including, Srinivas Rao Vanka and Magaral Veervalli Balaji, both directors of Vihaan Directselling (India) Pvt Ltd, Suresh Thimiri, director of Transview Enterprises India Pvt Ltd, Malcolm Nozer Desai, who is a 20 per cent stakeholder in Vihaan and Michael Joseph Ferreira, former world champion of billiards and an 80 per cent stakeholder in Vihaan.
Earlier the Bombay High Court had rejected the anticipatory bail applications of all the accused calling the whole business of QNet as “prima facie illegal business”.
The order mentioned, "The motto of the company 'sell more, earn more' appears very attractive and innocuous. However, this motto is fully camouflaged. The company stands on a basic statement that people can be fooled. Thus, the true motto is 'sell more earn more' by fooling people. In fact it is a chain where a person is fooled and then he is trained to fool others to earn money. For that purpose, workshops are conducted where study and business material is provided with a jugglery of words, promises and dreams. Thus, the deceit and fraud is camouflaged under the name of e-¬marketing and business."
"It has very grave and serious impact on the economic status and mental health of the people on a large scale. On considering parameters of the Section 438 of the Code of Criminal Procedure, I am not inclined to protect the accused. It won't be out of place to mention that such circulation is required to be stopped. It is necessary for the prosecution to take injunctive steps against this business activity, which is prima facie, illegal.”
“The Serious Frauds Investigation Office had termed the whole business of the QI Group in India as a threat to the national security,” said the whistle blower, Gurupreet Anand, who submitted the SFIO report in Bombay High Court as well as the Supreme Court of India along with other documents.
A detailed Status Report was filed by Special Public Prosecutor Pradeep Gharat and after going through the contents of the said report the anticipatory bail applications of all the prime accused was forthwith rejected. Agencies


Monday, 19 September 2016

Ministry of Consumer Affairs nails Amway with guidelines

The Ministry of Consumers Affairs has taken a right decision in preparing an advisory issuing the model framework to prepare guidelines by the State governments and Union Territories to expose the illegal activities of the direct selling companies which are in fact indulging in illegal money circulation schemes in the guise of selling products and services. It exposed the true colours of the direct selling companies in general and Amway in particular. With the help of the model framework, now it is easier to pinpoint the illegal activities of these companies.
It has prohibited entry fee/registration fee charged by the companies to enroll members and also collection of renewal fee every year. It may be recalled that the AP High Court pointed out that the Amway has been illegally lining its pockets by charging registration fee and renewal fee from the members which is nothing but easy and quick money. Though the new set of guidelines is almost similar to the guidelines issued earlier, there are only thin differences.
The pyramid scheme is clearly defined in the model framework. Moreover, it prohibits compulsion of these companies to purchase huge quantities of goods which is detriment to the interest of the consumers. These companies encourage the members to stock in large quantities offering commission of 40 per cent or more. They are also compelled to take back the products if the consumer is dissatisfied. However, it should have been made clear that the companies should directly take back the products instead of the present practice of returning through the upline members.
The companies also need to provide a grievance redressal mechanism to solve the grievances in a time-bound manner. In view of the framework, it would be easier for the aggrieved consumers to file criminal cases against these fraudulent direct selling companies.
Some members, who are very senior in the upline, claim huge income after selling products. In fact, they do not pay any sales tax to the commercial tax department. With the condition of compulsory of PAN, they would be compelled to disclose their income if at all they get. Most of the income they claim is on the products purchased by the downline members as if they actually sold them. Now they cannot escape the tax liability. It may be noted here that the Supreme Court held that the income from the purchase of downline members is also easy and quick money. 
Some direct selling companies are euphoric over the framework issued by the Ministry of Consumers Affairs. In fact, this is only the model framework as an advisory to the State governments and Union territories to prepare guidelines in their respective states and union territories. Whenever there is a clash between the guidelines and the legislation, it is not necessary to mention that the legislation prevails over the guidelines. Even the state governments form guidelines, the Kerala experience would recur if the guidelines were ignored by these companies. These companies cannot do business without misrepresenting the facts to the new members and naturally they would come under fire.
The big loss to these companies would be removal of entry fee and renewal fee. This is the main source of income particularly where these companies make easy and quick money.



Ministry of Consumer Affairs nails Amway with guidelines

The Ministry of Consumers Affairs has taken a right decision in preparing an advisory issuing the model framework to prepare guidelines by the State governments and Union Territories to expose the illegal activities of the direct selling companies which are in fact indulging in illegal money circulation schemes in the guise of selling products and services. It exposed the true colours of the direct selling companies in general and Amway in particular. With the help of the model framework, now it is easier to pinpoint the illegal activities of these companies.
It has prohibited entry fee/registration fee charged by the companies to enroll members and also collection of renewal fee every year. It may be recalled that the AP High Court pointed out that the Amway has been illegally lining its pockets by charging registration fee and renewal fee from the members which is nothing but easy and quick money. Though the new set of guidelines is almost similar to the guidelines issued earlier, there are only thin differences.
The pyramid scheme is clearly defined in the model framework. Moreover, it prohibits compulsion of these companies to purchase huge quantities of goods which is detriment to the interest of the consumers. These companies encourage the members to stock in large quantities offering commission of 40 per cent or more. They are also compelled to take back the products if the consumer is dissatisfied. However, it should have been made clear that the companies should directly take back the products instead of the present practice of returning through the upline members.
The companies also need to provide a grievance redressal mechanism to solve the grievances in a time-bound manner. In view of the framework, it would be easier for the aggrieved consumers to file criminal cases against these fraudulent direct selling companies.
Some members, who are very senior in the upline, claim huge income after selling products. In fact, they do not pay any sales tax to the commercial tax department. With the condition of compulsory of PAN, they would be compelled to disclose their income if at all they get. Most of the income they claim is on the products purchased by the downline members as if they actually sold them. Now they cannot escape the tax liability. It may be noted here that the Supreme Court held that the income from the purchase of downline members is also easy and quick money. 
Some direct selling companies are euphoric over the framework issued by the Ministry of Consumers Affairs. In fact, this is only the model framework as an advisory to the State governments and Union territories to prepare guidelines in their respective states and union territories. Whenever there is a clash between the guidelines and the legislation, it is not necessary to mention that the legislation prevails over the guidelines. Even the state governments form guidelines, the Kerala experience would recur if the guidelines were ignored by these companies. These companies cannot do business without misrepresenting the facts to the new members and naturally they would come under fire.
The big loss to these companies would be removal of entry fee and renewal fee. This is the main source of income particularly where these companies make easy and quick money.



Thursday, 28 July 2016

Kingpin of ‘Crypto mining scam’ arrested

Here is yet another multilevel marketing scam which shocked the authorities and the police alike. The crooks started 3Gcoin with the promise of easy and quick money. Finally the kingpin of the scam was arrested.
The kingpin involved in the scam of ‘3gcoin,’ a multi-level marketing company involved in crypto mining (digital currency), was arrested from Bengaluru and produced in a city Court on July 27. A case was registered under various provisions of IPC and IT Act and the police took up investigation.
According to the Cyber Crime police of Cyberabad, the accused, B M Jagadeesha, cheated people to the tune of Rs 2.89 crore during the last two years. Jagadeesha is the head of operations for the company www.3gcoin.eu which is registered in Europe lured gullible IT employees interested in crypto mining. They promised to provide huge profits upon investment. The modus operandi involved active involvement of 500 agents, working on commission basis. The person who introduced the members will get 20 per cent of 30 Euros as commission. The accused promised them that the introducer would continuously get the commission on each introduction. He has collected Rs 2,89,12,500 from one group most of which was distributed as commission to agents. 
At the time of launching the company, they have declared that the value of each Crypto Coin was 30 Euros. They have projected the investors that if they take one crypto coin by investing 30 Euros they would get 128 crypto coins at the end of the second year of investment.

During the investigation it also came to light that there are several other similar websites such as wowcoin, onecoin, richcoin, litcoin, which are involved in similar businesses online. “Hence, it is advised to study about the operations of such companies before investing their hard earned money,” said Md Riyazuddin, Inspector, Cyber Crimes (Cyberabad East), who led the team to Bengaluru.
Corporate Frauds Watch appeals to the people from all over the world not to fall prey to the dubious promises of multilevel marketing companies like Amway. Herbalife, Tupperware which are followed by the crooks like 3gcoin and others.