Tupperware is another American company which set foot in India in the name of direct selling after liberalization was introduced in the country. It also claims like other members of Indian Direct Selling Association (IDSA)that it is a good business opportunity and the consumers would get benefit through this business model.
Like the products of all these direct selling association members, the products of Tupperware are also exorbitantly priced and one has to become a member by paying certain amount. Never ask the question why should anybody become a member to purchase products. That is the racket behind the business model.
But there is a difference in this business model. The Tupperware targets women, that too, upper middle class women, all over world. Generally, they are all housewives with 'disposable' income. They are induced with the pep talk of easy and quick money and good business opportunity sitting at home.
Once they fell for the trap, they are encouraged to make their friends and relatives to buy products by becoming members. The members who introduced the new members would also be rewarded with commission.
The women try their hand to enroll new members and sell the products to them. But it would be very difficult to sell a plastic water bottle for Rs. 250 though it is guaranteed to last for a life time. By the time they realised that it is not easy, they would be losing some thousands of rupees by way of buying kitchen plasticware.
Anyway, they do not realise that they are cheated. They believe that they could not do that 'wonderful business' like everybody and they themselves are to be blamed for the failure. They never realised that the scheme itself is cheating. On the other hand, they are afraid that their husbands would scold them if they learnt about it. Moreover, their friends and relatives who were joined into the scheme by them would never trust them again.
Vijayawada-based Corporate Frauds Watch filed a criminal case against the Tupperware. So far, the police could spare no time to investigate into the scam. Already several millions of Indian were duped into the scam and several hundreds of crores of rupees were siphoned out of our country.
Monday, 31 December 2012
Tupperware indulges in illegal multilevel marketing
Wednesday, 26 December 2012
In the name of ducks, consumers lost several crores
Consumers need to think twice when someone approaches them with the offer of 'good business opportunity' or 'good investment opportunity'.
Duck Development Society is a classic example to study how easy is it to dupe the gullible in the name of good investment opportunity.
Prakasam district-based Duck Development Society offered people a good investment opportunity with abnormal returns within a short span of three months. All the investors have to do is investment the amount and wait for three months. Meanwhile, if they want to make extra amount, they could refer the investment opportunity to their friends and relatives to get commission from the recruitment of new investors.
The modus opereandi is simple. The Duck Development Society would be paid Rs. 23,000 by each investor and the amount would be spent to purchase some ducklings and the society would undertake the responsibility to rear them. After three months, the grownup ducks would be sold for an unspecified amount and the investor would be paid Rs. 38,000.
It is an attractive proposal of getting returns of Rs. 15,000 in three months with an investment of Rs. 23,000.
Many people fell for it and soon the Duck Development Society spread its tentacles all over the State.
An anxious investor from Gadval in Mahaboobnagar district approached Vijayawada-based Corporate Frauds Watch to know whether it is a good investment opportunity. After telling him that it is a fraud, the Corporate Frauds Watch has also taken up the matter to the notice of the police.
Surprisingly, the police were still under the impression that it was a good business opportunity.
Corporate Frauds Watch told the police that if duck-rearing is really good business opportunity and fetches good returns, the Society should approached the commercial banks with its project. The Banks would be too happy to extend financial support for such projects. Why the Society is collecting money from people? The police have seen the gameplan of the Society and registered a criminal case against the society.
Even after the criminal case was registered, the Society continued its operations for sometime. However, the Society soon started defaulting the payments. People took to streets demanding payments. But by that time the Society has already garnered about Rs. 80 crore and vanished.
The Duck Development Society has indulged in several crimes. One, collecting deposits from public without the permission of the Reserve Bank of India is a crime under the provisions of the AP Protection of Depositors Act, second enrollment by paying commission is a crime under the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, thirdly knowing fully the chain would break sooner than later, they encouraged the chain scheme and it is a crime under the Section 420 read with Section 34 (jointly and severally liable) of Indian Penal Code.
The organisers were caught later and spent sometime behind the bars before they were released on bail. The case is still under investigation.
Friday, 21 December 2012
Andhra Pradesh High Court dismisses RMP Infotech writ petition, disallows to withdraw funds
HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU
Crl.P.Nos.9771, 10597, 10603, 11729, 12472, 12476,
12610, 12913 of 2011 and W.P.No.17544 of 2012
COMMON ORDER:
Crl.P.No.10597 of 2011 is filed by A.5 in Cr.No.338 of 2011 of Arundalpet Police Station, Guntur; Crl.P.No.10603 of 2011 is filed by the accused in Cr.No.267 of 2011 of Old Guntur Police Station; Crl.P.No.11729 of 2011 is filed by A.1 in Cr.No.206 of 2011 of II Town Police Station, Ongole; Crl.P.No.12472 of 2011 is filed by RMP Infotech Private Limited relating to Cr.No.82 of 2011 of Santhamagulur Police Station; Crl.P.No.12476 of 2011 is filed by the accused company in Cr.No.370 of 2011 of Pattabhipuram Police Station, Guntur; Crl.P.No.12610 is filed by RMP Infotech Private Limited in Cr.No.387 of 2011; and Crl.P.No.12913 of 2011 is filed by the same Company in Cr.No.95 of 2011 of Kothapeta Police Station for quashing respective FIRs under Section 482 Cr.P.C. One of the main grievances of the petitioners in these petitions is that the accused are being harassed by the police in Guntur
2. It is contended by Senior Counsel for the petitioners that business activity of RMP Infotech Private Limited does not attract any penal provisions of any enactment. All the above cases were registered by the respective police against the respective accused in each case for offences punishable under Section 420 IPC and Sections 4 & 5 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (in short, the Act). It is contended that there is no element of cheating in the business activity attracting Section 420 IPC muchless activity of the petitioners and more particularly RMP Infotech Private Limited (in short, the Company) does not attract definition of ‘Money Circulation Scheme’ contained in Section 2(c) of the Act. On the other hand, it is contended by counsel for the de facto complainant in Santhamaguluru Police Station that activity of the Company through its local branches in different parts of the State squarely attracts the definition under Section 2(c) of the Act. It is further contended on behalf of the de facto complainant that activity of the Company resembles that of Speekasia Online Private Limited covered by unreported decision of this Court dated 30.08.2011 in Crl.P.No.5626 of 2011 and also that of Amway Case as laid down by this Court in Amway India Enterprises v Union of India[1].
3. In police proceedings/special report of the police which is FIR in Cr.No.338 of 2011 of Arundalpet Police Station, Guntur
“2. Mr.Pravin Jaya Chandan is the Managing Director, Mr.Dhaval Jaya Chandan is the Chairman along with few more directors of our company.
3. Head office is located in Chennai, Mahalingapuram.
4. In the beginning through multi level marketing I have purchased an Oven and Siyaram suit length for 6500 from RMP Infotec Private Limited and from that time I am working as independent distributor.
5. In the beginning when I joined the company as independent distributor, I submitted a demand draft of Rs.6500 in favour of RMP Infotec Private Limited payable at Chennai along with a completed application, ID Proof, Age proof and Pan card at the franchisee located in Gandhinagar, Vijayawada
6. There are 16 products in our company.
7. Whenever I sell these products to two people, the company gives a commission of Rs.1000 on my name.
8. In this way I have said my friends and relatives about this scheme and products, likewise 1 person grew into 2, 2 grew into 4 and so on and as of now I am earning Rs.60,000 as commission per week.
9. In the same way I have given training to other people and help them to increase the turnover.
10. There are 98 franchises of our company in India
11. We are buying products and applications from these franchisees by paying the concerned prices through DD.
12. After purchasing product, all independent distributors are paid commissions on product sales.
13. We consider this as multi level marketing.
14. There are around 18000 people who have purchased products and are placed below me as distributors.
15. My ceiling money does not exceed 1,30,000 per week.
16. We some times conduct Business Opportunity presentation.
17. We keep on training our distributors and that’s how we increase our company sales.
18. We create complete confidence on our company to the public and cheat them by telling that they can make huge money in less time and make them join us as distributors.”
4. It is contended for the petitioners that the Company which is based in Chennai is indulging in direct selling of products to the customers for lower cost which is upto 70% of maximum retail prize (MRP) of the products by directly securing them from reputed Companies like Siyaram, Big Bazar, Wipro, HCL etc. and in that process, the Company avoids C & F Agent, Super Stockist, Stockist, Distributor, Wholesale dealer and retail dealer and also avoids cost of advertisement and that by virtue of direct selling of products to the customer/buyer who joins as independent distributor/member of the Company and that in that process, the company earns huge profits out of which 35% is distributed among independent distributors. In the process of business of the Company, when a member joins as independent distributor, by purchasing products of the Company, he has to sell the Company’s products to at least two new customers and in which event, he gets profits/commission from out of value of products sold by him to those two new members and also certain percentage of money paid by those two new members towards their membership. Those two new members/independent distributors have to again sell the products by each of them to two more outsiders; and the activity percolates to the downwards. In all such types of Direct Selling or Multi level marketing, the process reaches a saturation level when new members joining at that level will not be able to sell products to any new members.
5. In State of West Bengal
“On a plain reading of the said definition, the requirements of a money circulation scheme are-
(i) there must be a scheme;
(ii) there must be members of the scheme;
(iii) the scheme must be for the making of quick or easy money on any event or contingency relative or applicable to the enrolment of members into the scheme or there must be a scheme for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to the enrolment of members into the scheme;
(iv) the event of contingency relative or applicable to the enrolment of members into the scheme will however not be in any way affected by the fact whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscription.”
6. This Court is of the opinion that at the threshold of the investigation, it may not be proper for this Court to scrutinize the alleged activity of the Company and its branches, independent distributors etc. and to come to any conclusion whether the said activity attracts the definition of Money Circulation Scheme contained in Section 2(c) of the Act or not.
7. Senior Counsel for the petitioners also fairly submitted that even if investigation is allowed to be proceeded further, freezing of bank accounts of the Company by the police during investigation is causing untold hardship to the Company in its business activity. For that reason, the Company filed Crl.P.No.9771 of 2011 questioning the same and seeking quashing of directions of Sub-Inspector of Police, Arundalpet (L&O) Police Station, Guntur directing IDBI Bank to freeze two CMS accounts of the Company in that bank, by way of letter dated 04.10.2011 addressed to the bank. Further, after CID took over investigation of all the cases, Inspector of Police, CID, RCIU, Guntur addressed another letter dated 15.05.2012 to ING Vysya Bank Limited, Chennai to freeze another account of the Company pending investigation. Questioning the same, the Company filed W.P.No.17544 of 2012.
8. It is contended by the Public Prosecutor that Section 7(1)(d) of the Act empowers the Investigating Officer to seize all things which are intended to be used or reasonably suspected to have been used in connection with any Money Circulation Scheme. It is further contended that it is only for the purpose of ultimate seizing of money which is derived from the Money Circulation Scheme covered by these offences, the Police Officers have frozen bank accounts of the Company.
9. As interim measure in Crl.P.No.9771 of 2011, this Court permitted the Company to withdraw Rs.11.00 crores from IDBI Bank to meet immediate needs of the Company towards his obligations to its employees etc. It is reported that the Company could not withdraw the said amount as by then the Kerala High Court also have passed an order relating to freezing of the said accounts. In the circumstances and having regard to there being prima facie case for the prosecution, this Court is of the opinion that it would not be just and proper to allow the Company to deal with the bank accounts as it likes.
10. I find no legal or justifiable reason either for quashing FIRs in these crimes or for quashing letters of Police Officers freezing bank accounts of the Company pending investigation.
11. In the result, all the criminal petitions as well as writ petition are dismissed. At the same time, in case of any compulsive circumstances and dire necessities, the Company is at liberty to approach this Court by separate and independent petitions for withdrawal of portions of monies lying in the bank accounts.
_____________________________
SAMUDRALA GOVINDARAJULU,J
Dt.11th December, 2012
PNV
Money Circulation under Multi Level Marketing Scheme: RBI
The Ponzi and Multi-Level Marketing (MLM) schemes fall within the purview of ‘Money Circulation’ which is an offence under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. That Act is administered by the Ministry of Finance (Department of Financial Services) through the State Governments. Recently Ministry of Finance in consultation with the Reserve Bank of India, have circulated Model Rules to be notified by the States. These rules make it amply clear that investment schemes run in the MLM mode are illegal under the above Act and organizers of such schemes need to be prosecuted.
While coordinating action against such schemes lies with the States and the nodal Ministry, the Ministry of Corporate Affairs has till November 2012 received complaints against 86 Companies mostly located in West Bengal and Tamil Nadu States and one company registered outside India doing business on-line in association with some Indian companies.
Ministry of Corporate Affairs has ordered investigation into the affairs of 7 companies under Section 235 of the Companies Act, 1956 to be conducted by Serious Fraud Investigation Office (SFIO) and scrutiny of balance sheets under section 234 and/or inspection of the Books of Accounts and other records of the remaining 80 companies under Section 209A of the Companies Act, 1956 to ascertain, if the activities involve violation of the provisions of the Companies Act, 1956.
Wednesday, 19 December 2012
Andhra Pradesh High Court dismisses the writ petition of RMP
Justice Samudrala Govindarajulu of Andhra Pradesh High Court last week dismissed the writ petition filed by the fraudulent multilevel marketing company Resource Money Power Infotech a.k.a. RMP after patiently hearing the arguments of its counsels and the counsels of Corporate Frauds Watch.
It may be recalled that RMP filed the writ petition seeking declaration of its business model legal which is in fact an illegal money circulation scheme.
The judge has apparently seen through the dubious marketing techniques of the fraudsters who have been making illegal gains in the name of selling products and services. However, it could not convince the High Court that its business model is beneficial to the consumers.
The full text of the judgement would be published as soon as it appears on the High Court website.
The NMart fraudsters have, in a tactical move, withdrawn their writ petitions fearing caustic remarks from the High Court. They are not in a position to resubmit the writ petitions.
The GoldQuest racketeers could not dare to file a writ petition in the High Court since they know it would be suicidal.
In essence, there is hardly any future for these racketeers who are promoting network marketing, direct selling, referral marketing, multilevel marketing or any other marketing to loot the public in broad daylight.
Sunday, 16 December 2012
Multilevel marketing is illegal in China
In 1998, when MLM pyramid selling schemes first swept across China – and China was being hailed by the MLM industry as the next frontier – the government banned all direct selling. This was because in China, as in America where many of the scams originated, direct selling had become the main disguise for pyramid schemes. On Wall Street and in financial centers around the world, pyramid schemes disguise themselves as "investment" opportunities and "hedge funds." But on Main Streets all over the world, pyramid schemes are disguised primarily as "business" opportunities and "direct selling."
After the ban in China, the US-based multi-level marketing industry launched a major lobbying campaign to get China's government to legalize multi-level marketing. It even gained the help of the US Trade Representative at that time, Charlene Barschefsky, who worked for the Clinton Administration. Ms. Barschefsky was publicly thanked by Amway for her efforts to help the MLM industry. The usual false claims were put forth by the MLM industry and Ms. Barschefsky that MLM is really "direct selling", not pyramid schemes.
MLM Trying to Recruit Illegally
China's government used consulting firms to investigate the distinctions between MLM and obvious pyramid schemes such as "gifting clubs." In the end, it determined that MLM is only a disguised pyramid scheme. There were differences without distinction. It concluded that MLM is a fraud industry. It decided to maintain the ban. Pyramid Scheme Alert provided videos, news reports, analysis, and technical assistance to the main consulting firm that was working with the Chinese government. It recommended that the government maintain and reaffirm its ban on MLM, which the government ultimately agreed with. In 2005, the ban was reaffirmed while true direct selling (sales by direct sellers to retail customers) was allowed. This action was a great shock to the MLM industry which needs new territory as its existing markets are saturated.
Today, the MLM industry continues its lobbying and there is much evidence that it is enticing Chinese citizens to break the law. Major MLMs such as Usana, Herbalife and Amway operate in China only as retail selling operations. The recruitment-based pay plan is not allowed. But in Taiwan, MLM does operate in the American
model. Many people are urged to join downlines based in Taiwan or other countries. Some are encouraged to fake their residences. Additionally, as the USA Today article noted, people are being told that the government will legalize MLM pyramids.
Lies as Main Recruiting Tool
China's battle against pyramid schemes comes up against the most difficult of all challenges: MLM's great expertise and experience with lying. It is so adept at deception it can gain tremendous control over people, as cults. China, as in the USA, is seeing people bankrupting their families and ruining their marriages while
under the cult-like spell of MLM promises of wealth and security. Reports of suicides are rising related to MLMs, which is true in the USA also.
As in the USA, there is now a consumer organization in China – the China Anti-Pyramid Scheme Association – to help consumers learn the truth about MLMs and to break free of MLM lies. The first book that exposes the truth about MLM pyramid schemes has also been published by a Chinese author.
MLMs have great ability to mislead people about promised income, and the nature of pyramids and their legality. These lies are combined with lies about products, fake testimonials from shills at recruitment meetings, and fake growth numbers. While Ponzi schemes collapse quickly after they are exposed, MLM pyramids even after exposures and analysis, can fight back with campaigns of deception. Ponzi's survive with concealment. Pyramids operate in plain view but with disguise. The USA Today article notes that though MLM is outlawed in China, MLM recruiters tell people that "secretly" the government supports MLM and "wants Amway to succeed"
there. And, of course, they use the lie about the "sale of products" being proof against a pyramid.
Contrast with USA
The efforts of China to educate its citizens with the truth about how pyramid schemes work and its aggressive efforts to protect its people from pyramid predators contrast sharply with America's, the land where the "direct selling" pyramid scheme was invented. In the USA, the lies about MLMs offering the average person high income and protection from Recession are published by the mainstream media. The New York Times called MLM recruitment schemes a "fall back" for consumers during Recession and repeated an erroneous average income figure propagated by the MLM industry. MLM schemes that inflict 99% loss rates on consumers sit on the boards of Chambers of Commerce. The former chairman of the Federal Trade Commission was a former Amway lawyer and now works as a lawyer/lobbyist for an MLM. Our former Chief of Consumer Protection at the FTC now
represents Amway.
The question must be asked: which economy shows the greatest promise for the future? The one that treats pyramid schemes as corrupting and harmful and works to protect people from losing their money with public education and law enforcement? Or the one that allows the frauds to spread, treats them as legitimate businesses, even as they deceive and harm, and whose government officials take jobs with the schemes?
Saturday, 15 December 2012
RMP receives an earful in Andhra Pradesh High Court
Resource Money Power Infotech popularly known as RMP has induced several millions of consumers through out the country in general and South India in particular with the promise of easy and quick money by becoming its member. However, almost all of them lost their hard-earnings in the scam.After police filed a criminal case against RMP, the company like all its predecessors like Amway, Apple FMCGm V-Can Network, had also preferred to file a writ petition in the Andhra Pradesh seekings its intervention to prevent police from proceeding investigation against the company. On the pretext that a writ petition was pending before the Andhra Pradesh High Court, RMP continued its activities.However, after Vijayawada-based Corporate Frauds Watch (CFW) filed an implead petition in the writ petition filed by RMP, the AP High Court got the opportunity to hear the point of view presented by RMP and CFW.The writ petition reached the single judge Bench comprising Justice Samudrala Govindarajulu heard the arguments of the counsels of RMP and CFW. During the course of arguments, Justice Govindarajulu pointed out he knew the fraudulent ways of several multilevel marketing companies which have been fleecing money from public. The Government pleader told the Bench that theAmway case was referred to the larger bench, Justice Govindarajulu made caustic remarks against Amway India.The Judge also said that the Bench is aware of the circumstances that led to the referral of Amway writ petition to the larger Bench. After hearing the arguments of all parties concerned, the Bench reserved the order.Resource Money Power is also one of those multilevel marketing companies which induce people with easy and quick money. Its business model is also same that of Amway India. One has to become a member by paying about Rs. 6,000 and he would be given a suit length and other stuff. But the real inducement is the commission he would be paid if he enrolled new members into the scheme as his downline.The company has already cheated several millions through out the country. Generally, the members are introduced into the scheme by their friends and relatives. That is why nobody comes forward to lodge a complaint with the police. However, after the scheme reaches a flash point, it starts defaulting and then only people would come forward to lodge complaints.At that point of time, all these fraudulent companies file writ petitions in the high court appealing to the court to declare its model business model legal and continue with their business. It is high time consumers realised the futile exercise of joining such schemes to earn money. Generally, these companies advertise that it was a good business opportunity. There is hardly any business opportunity but it is only a disguised illegal money circulation scheme banned under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
HSBC bosses agree to pay $1.9 billions fine and are put on probation
http://www.bbc.co.uk/news/business-20673466
In the case of HSBC, and various other banks which continue to be caught engaged in large-scale money laundering, these jaw-dropping events are particularly baffling, since large-scale money laundering is, by its very nature, always part of a pattern of major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970), in that large-scale money-laundering is the process of using labyrinths of legally-registered corporate structures, generally pursuing lawful enterprises, to disguise the proceeds of ongoing major organized crime so that this money cannot be linked to unlawful enterprises. Indeed, US RICO legislation provides severe penalties ($250 000 fines and 20 years prison, per racketeering count) for all persons (including attorneys and bankers) proved to have been engaged in a pattern of ongoing major racketeering activity. Yet, predictably, RICO has not yet been invoked by US prosecutors, and the latest bosses of HSBC and their attorneys, have simply been allowed to pretend that the bank's was only guilty of having 'poor money laundering controls' which they are now in the process of reforming. Oh, and they have offered their 'apologies.'
This latest HBSC news followed the announcement of a similar settlement with UK-based Standard Chartered bank. Its bosses have so far agreed to pay $300m in fines for violating US sanctions.
Ironically, the regular sale to banksters of what are effectively 'Get of Jail' cards, has been described as being part of a 'crackdown on money laundering and sanctions violations being led by federal government agencies and New York state authorities,' following the release of a report by the US Senate which concluded that:
Until recently, Bob Werner headed the US Treasury's Office of Foreign Assets Control (OFAC) - the agency responsible for enforcing US sanctions on countries including Iran.
David Brear (copyright 2012)
UK-based HSBC bank is the biggest in Europe (by market capitalisation). It declared pre-tax profits of $12.7bn for the first half of 2012.
After an astonishing US Senate investigation (published earlier this year, 2012) concluded that HSBC had 'been a conduit for drug kingpins and rogue nations,' the current bosses of HBSC have now announced that they have agreed to pay the US authorities a staggering $1.9 billions (the largest penalty ever imposed on a bank) to avoid facing money laundering charges. This means that although some of the most-serious financial crimes imaginable have been committed by certain corporate officers and employees and HSBC, no individual or corporate structure will face the slightest criminal charge. Although, financial penalties imposed on banks for perpetrating crimes have been described as'fines' it would, therefore, be a far more accurate use of English to describe these payments as 'expenses.' Indeed, I am reliably informed that, since financial penalties imposed on banks reduce their profits, they are tax-deductible.
In the case of HSBC, and various other banks which continue to be caught engaged in large-scale money laundering, these jaw-dropping events are particularly baffling, since large-scale money laundering is, by its very nature, always part of a pattern of major racketeering activity (as defined by the US federal Racketeer Influenced and Corrupt Organizations Act, 1970), in that large-scale money-laundering is the process of using labyrinths of legally-registered corporate structures, generally pursuing lawful enterprises, to disguise the proceeds of ongoing major organized crime so that this money cannot be linked to unlawful enterprises. Indeed, US RICO legislation provides severe penalties ($250 000 fines and 20 years prison, per racketeering count) for all persons (including attorneys and bankers) proved to have been engaged in a pattern of ongoing major racketeering activity. Yet, predictably, RICO has not yet been invoked by US prosecutors, and the latest bosses of HSBC and their attorneys, have simply been allowed to pretend that the bank's was only guilty of having 'poor money laundering controls' which they are now in the process of reforming. Oh, and they have offered their 'apologies.'
 |
| We accept responsibility for our past mistakes... We have said we are profoundly sorry for them.' Current HSBC group CEO, Stuart Gulliver. |
Somewhat belatedly, HSBC officials have recently said that they have reserved $290 millions to improve their money laundering controls and that they have taken back some 'bonuses' (payments linked to unlawful profits) paid to senior executives in the past.
HSBC has also announced that it is due to reach a similar (deferred) criminal-charge avoidance agreement with the UK's Financial Services Authority. Indeed, last month HSBC said that it had set aside $1.5 billions to pay for any settlement or fines.
This latest HBSC news followed the announcement of a similar settlement with UK-based Standard Chartered bank. Its bosses have so far agreed to pay $300m in fines for violating US sanctions.
Ironically, the regular sale to banksters of what are effectively 'Get of Jail' cards, has been described as being part of a 'crackdown on money laundering and sanctions violations being led by federal government agencies and New York state authorities,' following the release of a report by the US Senate which concluded that:
- 'HSBC in the USA had not treated its Mexican affiliate as high risk, despite the country's money laundering and drug trafficking challenges'
- 'The Mexican affiliate had transported $7billions in US bank notes to HSBC in the USA, more than any other Mexican bank, but had not considered that to be suspicious'
- 'HSBC had circumvented US safeguards designed to block transactions involving terrorists drug lords and rogue states, including allowing 25,000 transactions over 7 years without disclosing their links to Iran'
- 'HSBC had provided US dollars and banking services to some banks in Saudi Arabia despite their links to terrorist financing'
- 'In less than 4 years HSBC had cleared $290m in obviously suspicious US travellers' cheques for a Japanese bank, benefiting Russians who claimed to be in the used car business'
The report suggested that it was obvious that HSBC accounts in Mexico and the USA were being used by drug barons to launder mountains of cash. Interestingly, other qualified-observers have suggested that bank officers became blinded to reality in a desperate attempt to generate profits after making catastrophic investments in Mexico. However, the Senate report also stated that HSBC regularly dodged restrictions on dealings with Iran, North Korea and other states subject to US trade sanctions.
Thus, HSBC bosses were more than happy to sign a 'Deferred Prosecution Agreement' in which they have effectively been placed on probation after effectively pleading guilty to a corporate-breaching of the 'US Bank Secrecy Act' and the 'Trading with the Enemy Act' as well as to committing a catalogue of money laundering offences. Yet had HSBC been indicted for any of these offences, then the US (and other) government(s) automatically would no longer have been permitted to conduct business with the bank.
 |
| Bob Werner |
In a predictable move reminiscent of 'MLM Income Opportunity' racketeers, HSBC has announced that it has now bought the services a former senior US federal regulator who will work as 'Head of Financial Crime Compliance' (a post which, tellingly, did not exist previously).
David Brear (copyright 2012)
Sunday, 2 December 2012
Amway IBO's murder case: Life imprisonment to unemployed youth
Women's Session judge Nirmala Gitamba on Monday (December 26) pronounced and sentenced Bhukya Ravi Kiran to life imprisonment and imposed a fine of Rs. 3,000 holding him to guilty of murdering an Amway IBO Nimishakani Sailaja, wife of Rammohan, professor, Siddhartha Engineering College in Vijayawada,on November 10, 2006.
According to the prosecution, Ravi Kiran is an unemployed youth who did various odd jobs for eking out an living. His brother is an auto rickshaw driver. Naga Durga, servant maid of the housewife Sailaja, told the auto driver that Sailaja was an independent business owner (IBO) of Amway India Enterprises and earning wads of money. Naga Durga also told him that Sailaja said several times that she was earning more than Rs 65,000 every month after joining Amway.
The auto driver informed his brother Ravi Kiran about the business opportunity of Amway. Ravi Kiran believed that Sailaja was earning a lot of money every month. One day he met Sailaja who enthusiastically explained the business opportunity of Amway India Enterprises and it is easy and quick way to earn good money. She pestered him to join Amway India to earn easy and quick money by just enrolling more members into the scheme.
Ravi Kiran has other plans to earn easy and quick money. He hatched a plan to do away with Sailaja and steal the money she had earned as Amway IBO.
Ravi Kiran checked into a small hotel with the pseudonym B Kishore of Gudivada town on November 6, 2006 and purchased a knife to put his plan into action.
On November 10, he went to the apartment where Sailaja was living and told her that he was interested to join Amway India but he needed more details. Unsuspecting and overenthusiastic Sailaja let him into the apartment house.
While she was explaining the business opportunity, Ravi Kiran stabbed her with the knife and strangled her with her own saree. Sailaja died on the spot. Ravi Kiran removed gold ornaments from her person and broke open the almyrah to find wads of money stashed there. But to his dismay he found only Rs. 1700.
Her husband, Rammohan, who returned from the college for lunch, found his wife in a pool of blood. He lodged a complaint with the police.
During the course of investigation, the police found Ravi Kiran indulged in the crime.
Fifteen witnesses corroborated the prosecution case and it was found Ravi Kiran was guilty.
A simple lie that she was earning wads of money as member of Amway India resulted in the death of the housewife.
Wednesday, 28 November 2012
A Common Sense Approach to Cultism
In response to any other thoughtless commentators who pretend thatI am thoughtlessly condemning all forms of ritual belief as pernicious:
Young children’s unconscious acceptance of ‘Santa Claus’ as total reality, stems from a fictitious scenario reflected as fact by the traditional culture in which they live. Up to a certain age, children are not equipped to challenge the model of reality offered to them by authoritarian figures within their family groups; particularly, their parents. Therefore, once children have been converted to a self-gratifying, non-rational belief in ‘Santa,’ the truth (that they are actually being deceived by the people whom they instinctively trust and follow) is unthinkable. The scenario can then be expanded to modify children’s behaviour — ‘Santa’ has magical powers… he can see and hear everything they do at all times… he will reward them for unquestioning belief and punish them for dissent. Only when they attain the necessary level of intellectual/psychological development, can children begin to use their critical and evaluative faculties and come to realise that ‘Santa’ is merely a game of make believe. If you think about it, what I’ve just described is the most elementary form of self-perpetuating, non-rational/esoteric, ritual belief system - perfectly tailored to fit infantile minds, and reliant on the maintenance of an absolute monopoly of information presented using a constant repetition of reality-inverting key words and images combined with pseudo-scientific mystification and closed-logic.
When analysed with the same level of intellectual rigour, many of the basic procedures and conditions required to establish 'MLM income opportunity' cults, like 'NMart' and 'Amway,' turn out not to be a mystery at all. They are revealed as only more-sophisticated versions of those which also propagate the benign ‘Santa’ deception. As such, they are frighteningly easy to replicate. However, the narcissistic instigators of groups like 'NMart' and 'Amway' are anything but benign and, interestingly, many of their most-deluded subjects and convincing apologists turn out to be well-educated adults who have simply become incapable of facing the ego-destroying reality that they’ve been fooled by what is merely a game of make believe. No sane person would ever suggest trying to ban ‘Santa,’ and everyone lies to their children at some time to modify their behaviour, but consider the variety of destructive behaviour that an authoritarian adult (with hidden criminal objectives) could get dependent children to follow by exploiting their unconscious acceptance of the same imaginary, but nonetheless emotionally and intellectually overwhelming, narrative as total reality. The unpalatable truth is that, just by perverting the closed-logic rules of the game, anything - from theft by proxy to sexual, and/or violent, abuse - becomes possible.
David Brear (copyright 2012)
Monday, 26 November 2012
'N-mart', 'Amway,' etc. have all exhibited the universal identifying characteristics of a cult
I think that the many new readers of this Blog should take note that groups like 'N-Mart' and'Amway' are pernicious or criminogenic cults, not simply because we say so, but because they have exhibited certain essential characteristics which identify them as such.
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'The Universal Identifying Characteristics of a Cult' (David Brear, Axiom Books, copyright 2005):
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Apart from its use in the sense of ‘a popular fashion especially followed by a specific section of society’ or ‘a person or thing popularised in this way,’ the traditional definition of the English noun, cult (Latin cultus worship), has been ‘a system of religious worship (Latin religiosus obligation, bondage) especially as expressed in ritual,’ or ‘devotion or homage to a person or thing.’ However, the word is now also used as shorthand for what is more accurately described as a pernicious cult. This evolving, criminogenic phenomenon can be briefly described as:
any self-perpetuating, non-rational/esoteric, ritual belief system established or perverted for the clandestine purpose of human exploitation.
Such groups are identified by the following, essential characteristics:
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Apart from its use in the sense of ‘a popular fashion especially followed by a specific section of society’ or ‘a person or thing popularised in this way,’ the traditional definition of the English noun, cult (Latin cultus worship), has been ‘a system of religious worship (Latin religiosus obligation, bondage) especially as expressed in ritual,’ or ‘devotion or homage to a person or thing.’ However, the word is now also used as shorthand for what is more accurately described as a pernicious cult. This evolving, criminogenic phenomenon can be briefly described as:
any self-perpetuating, non-rational/esoteric, ritual belief system established or perverted for the clandestine purpose of human exploitation.
Such groups are identified by the following, essential characteristics:
1). Deception. Pernicious cults are presented externally as traditional associations. These can be arbitrarily defined by their instigators as almost any banal group (‘religious’, ‘cultural’, ‘political’, ‘commercial’, etc.). However, internally, they are always totalitarian (i.e. they are centrally-controlled and require of their core-adherents an absolute subservience to the group and its patriarchal, and/ or matriarchal, leadership above all other persons). By their very nature, pernicious cults never present themselves in their true colours. Consequently, no one ever becomes involved with one as a result of his/her fully-informed consent.
2). Self-appointed sovereign leadership. Pernicious cults are instigated and ruled by psychologically dominant individuals, and/or bodies of psychologically dominant individuals (often with impressive, made-up names, and/or ranks, and/or titles), who hold themselves accountable to no one. These individuals have severe and inflexible Narcissistic Personalities (i.e. they suffer from a chronic psychological disorder, especially when resulting in a grandiose sense of self-importance/ righteousness and the compulsion to take advantage of others and to control others’ views of, and behaviour towards, them).* They steadfastly pretend moral and intellectual authority whilst pursuing various, hidden, criminal objectives (fraudulent, and/or sexual, and/or violent, etc.). The admiration of their adherents only serves to confirm, and magnify, the leaders’ strong sense of self-entitlement and fantasies of unlimited success, power, brilliance, beauty, ideal love, etc.
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* ‘Narcissistic Personality Disorder,’ is a psychological term first used in 1971 by Dr. Heinz Kohut (1913-1981). It was recognised as the name for a form of pathological narcissism in ‘The Diagnostic and Statistical Manual of Mental Disorders 1980.’ Narcissistic traits (where a person talks highly of himself/herself to eliminate feelings of worthlessness) are common in, and considered ‘normal’ to, human psychological development. When these traits become accentuated by a failure of the social environment and persist into adulthood, they can intensify to the level of a severe mental disorder. Severe and inflexible NPD is thought to effect less than 1% of the general adult population. It occurs more frequently in men than women. In simple terms, NPD is reality-denying, total self-worship born of its sufferers’ unconscious belief that they are flawed in a way that makes them fundamentally unacceptable to others. In order to shield themselves from the intolerable rejection and isolation which they unconsciously believe would follow if others recognised their defective nature, NPD sufferers go to almost any lengths to control others’ view of, and behaviour towards, them. NPD sufferers often choose partners, and raise children, who exhibit ‘co-narcissism’ (a co-dependent personality disorder like co-alcoholism). Co-narcissists organize themselves around the needs of others (to whom they feel responsible), they accept blame easily, are eager to please, defer to others’ opinions and fear being seen as selfish if they act assertively. NPD was observed, and apparently well-understood, in ancient times. Self-evidently, the term, ‘narcissism,’ comes from the allegorical myth of Narcissus, the beautiful Greek youth who falls in love with his own reflection.
Currently, NPD has nine recognised diagnostic criteria (five of which are required for a diagnosis):
- has a grandiose sense of self-importance.
- is preoccupied with fantasies of unlimited success, power, brilliance, beauty, ideal love, etc.
- believes that he/she is special and unique and can only be understood by other special people.
- requires excessive admiration.
- strong sense of self-entitlement.
- takes advantage of others to achieve his/her own ends.
- lacks empathy.
- is often envious or believes that others are envious of him/her.
- arrogant disposition.
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3). Manipulation. Pernicious cults employ co-ordinated, devious techniques of social and psychological persuasion (variously described as: ‘covert hypnosis’, ‘mental manipulation’, ‘coercive behaviour modification’, ‘group pressure’, ‘thought reform’, ‘ego destruction’, ‘mind control’, ‘brainwashing’, ‘neuro-linguistic programming’, ‘love bombing’, etc.). These techniques are designed to fulfil the hidden criminal objectives of the leaders by provoking in the adherents an infantile total dependence on the group to the detriment of themselves and of their existing family, and/or other, relationships. Pernicious cults manipulate their adherents’ existing beliefs and instinctual desires, creating the illusion that they are exercising free will. In this way, adherents can also be surreptitiously coerced into following potentially harmful, physical procedures (sleep deprivation, protein restriction, repetitive chanting/ moving, etc.) which are similarly designed to facilitate the shutting down of an individual’s critical and evaluative faculties without his/ her fully-informed consent.
4). Radical changes of personality and behaviour. Pernicious cults can be of any size, duration and level of criminality. They comprise groups, and/or sub-groups, of previously diverse individuals bonded by their unconscious acceptance of the self-gratifying, but wholly imaginary, scenario that they alone represent a positive or protective force of purity and absolute righteousness derived from their leadership’s exclusive access to a superior or superhuman knowledge, and that they alone oppose a negative or adversarial force of impurity and absolute evil.Whilst this two-dimensional, or dualistic, narrative remains the adherents’ model of reality, they are, in effect, constrained to modify their individual personalities and behaviour accordingly.
5). Pseudo-scientific mystification. The instigators of pernicious cults seek to overwhelm their adherents emotionally and intellectually by pretending that progressive initiation into their own superior or superhuman knowledge (coupled with total belief in its authenticity and unconditional deference to the authority of its higher initiates) will defeat a negative or adversarial force of impurity and absolute evil, and lead to future, exclusive redemption in some form of secure Utopian existence. By making total belief a prerequisite of redemption,adherents are drawn into a closed-logic trap (i.e. failure to achieve redemption is solely the fault of the individual who didn’t believe totally). Cultic pseudo-science is always essentially the same hypnotic hocus-pocus, but it can be peddled in an infinite variety of forms and combinations (‘spiritual’, ‘medical’, ‘philosophical’, ‘cosmological
6). Monopoly of information. The leaders of pernicious cults seek to control all information entering not only their adherents’ minds, but also that entering the minds of casual observers. This is achieved by constantly denigrating all external sources of information whilst constantly repeating the group’s reality-inverting key words and images, and/or by the physical isolation of adherents. Cults leaders systematically categorize, condemn and exclude as unenlightened, negative, impure, absolutely evil, etc. all free-thinking individuals and any quantifiable evidence challenging the authenticity of their imaginary scenarios of control. In this way, the minds of cult adherents can become converted to accept only what their leadership arbitrarily sanctions as enlightened, positive, pure, absolutely righteous, etc. Consequently, adherents habitually communicate amongst themselves using their group’s thought-stopping ritual jargon, and they find it difficult, if not impossible, to communicate with negative persons outside of their group whom they falsely believe to be not only doomed, but also to be a suppressive threat to redemption.
7). False justification. In pernicious cults, a core-group of adherents can be gradually dissociated from external reality and reformed into deployable agents, and/or de facto slaves, and/or expendable combatants, etc., furthering the hidden criminal objectives of their leaders, completely dependent on a collective paranoid delusion of absolute moral and intellectual supremacy fundamental to the maintenance of their individual self-esteem/identity and related psychological function. It becomes impossible for such fanatics to see humour in their situation or to feel pity for, or to empathise with, non-adherents. Their minds are programmed to interpret the manipulation, and/or cheating, and/or dispossession, and/or destruction, of inferior outsiders (particularly, those who challenge their group’s controlling scenario) as perfectly justifiable.
8). Structural mystification. The instigators of pernicious cults can continue to organize the creation, and/or dissolution, and/or subversion, of further (apparently independent) corporate structures pursuing lawful, and/or unlawful, activities in order to prevent, and/or divert, investigation and isolate themselves from liability. In this way, some cults survive all low-level challenges and spread like cancers enslaving the minds, and destroying the lives, of countless individuals in the process. At the same time, their leaders acquire absolute control over capital sums which place them alongside the most notorious racketeers in history. They operate behind ever-expanding, and changing, fronts of ‘privately-controlled, limited-liability, commercial companies,’ and/or ‘non-profit-making associations,’ etc. Other than ‘religious /philosophical’ and ‘
‘charity/ philanthropy’; ‘fund-raising’; ‘lobbying’ on topical issues (‘freedom’, ‘ethics’, ‘environment’, ‘human rights’, ‘women’s rights’, ‘child protection’, ‘law enforcement’, ‘social justice’, 'peace,' etc.); ‘publishing and media’; ‘education’; ‘academia’; ‘celebrity’; ‘patriotism’; ‘information technology’; ‘public relations’; ‘advertising’; ‘medicine’; ‘alternative medicine’; ‘nutrition’; ‘rehabilitation’; ‘manufacturing’; ‘retailing’; ‘direct selling/ marketing’; ‘multilevel marketing’; ‘network marketing’; ‘regulation’; ‘personal development’; ‘self-betterment’; ‘positive thinking’; ‘self-motivation’; ‘leadership training’; ‘life coaching’; ‘research and development’; ‘investment’; ‘real estate’; ‘sponsorship’; ‘bereavement/trauma counselling’; ‘addiction counselling’; ‘legal counselling’; ‘cult exit-counselling’; ‘financial consulting’; ‘management consulting’; ‘clubs’; etc.
9). Chronic psychological deterioration symptoms. The long-term core-adherents of pernicious cults are psychotic (i.e. suffering from psychosis, a severe mental derangement, especially when resulting in delusions and loss of contact with external reality). Core-adherents who manage to break with their group and confront the ego-destroying reality that they’ve been systematically deceived and exploited, are invariably destitute and dissociated from all their previous social contacts. For many years afterwards, recovering former core-adherents can suffer from one, or more, of the following psychological problems (which are also generally indicative of the victims of abuse):
depression; overwhelming feelings (guilt, grief, shame, fear, anger, embarrassment, etc.); dependency/ inability to make decisions; retarded psychological/ intellectual development; suicidal thoughts; panic/ anxiety attacks; extreme identity confusion; Post-Traumatic Stress Disorder; insomnia/ nightmares; eating disorders; psychosomatic illness ( asthma, skin disorders, headaches, fatigue, etc.); sexual problems/ fear of forming intimate relationships; inability to trust; etc.
10). Repression of all dissent. The leaders of the most-destructive cults are megalomaniacal psychopaths (i.e. suffering from a chronic mental disorder, especially when resulting in paranoid delusions of grandeur and self-righteousness, and the compulsion to pursue grandiose objectives). The unconditional deference of their deluded adherents only serves to confirm, and magnify, the leaders’ own paranoid delusions. This type of cult leader maintains an absolute monopoly of information whilst perpetrating, and/or directing, evermore heinous crimes. They sustain their activities by the imposition of arbitrary contracts and codes (secrecy, denunciation, confession,justice, punishment, etc.) within their groups, and by the use of humiliation, and/or intimidation, and/or calumny, and/or malicious prosecution (where they pose as victims), and/or sophism, and/or the infiltration of traditional culture, and/or corruption, and/or intelligence gathering and blackmail, and/or extortion, and/or physical isolation, and/or violence, and/or assassination, etc., to repress any internal or external dissent.
David Brear (copyright 2005)
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