Tuesday, 30 April 2013


Finally, the accused in the multi-crore NMart fraud, Gopal Shekhawat, was arrested by the Andhra Pradesh police in Surat on Tuesday.
The Prakasam district police headed by Dr N Raghuram Reddy, superintendent of police, finally made a headway in the investigation of the case and arrested the accused who had been evading the arrest for the last several months.
Additional Commissioner of Police (Crime) Narasimha Kumar and Deputy Inspector General of Police (SIB) VC Sajjanar contributed their efforts for the arrest of the accused
It may be recalled that Corporate Frauds Watch lodged a complaint with the Prakasam district police against the illegal money circulation scheme indulged in by NMart duping several millions of people up to several crores of rupees.
The police swung into action and arrested Gopal Shekhawat in Surat last year but he obtained bail from a Mumbai court on the promise that he would present himself in the Ongole court by September 3rd. However, he jumped the bail and since then he had been absconding.
The police also issued a lookout notice for the absconding proclaimed offender.
On April 30, the Prakasam district police arrested Gopal Shekahwat and produced him in a local court for obtaining the transit warrant to shift the accused to Ongole.
The local court has issued the transit warrant also known as PT warrant to transport him to Andhra Pradesh.
Gopal Shekhawat would be produced in the Principal Sessions Court at Ongole as soon as he is brought to Ongole. 

Sunday, 28 April 2013

'MMM India,' another, unoriginal, contagious fantasy of Sergei Mavrodi.

About 15 years ago, I coined the common-sense phrase: 'premeditated, or dissimulated, closed-market swindle,' in order to deconstruct all Ponzi schemes, pyramid frauds, money circulation games, chain-letter scams, etc. However, although a few commentators have used my term (sometimes without attribution), a 'closed-market swindle' is not yet defined in law. That said, it is universally accepted that lying to, or withholding key-information from, people in order to take their money, is fraud which is a form of theft. Common-sense also reveals that, by 'passing any law, but failing to enforce it, has the effect of authorizing the very crime which you are trying to prohibit.' 

The lie which is fundamental to all 'closed-market swindles' is that people can earn income by contributing their own money to participate in any alleged 'profitable commercial opportunity' which is secretly an economically-unviable fake, due to the fact that the alleged 'profitable commercial opportunity' has been rigged so that it generates no significant, or sustainable, revenue other than that deriving from its own participants. For more than 50 years, 'Multi-Level Marketing' racketeers have been allowed to dissimulate closed-market swindles by offering endless-chains of victims various banal, but grossly-over-priced, products, and/or services, in exchange for unlawful payments, on the pretext that 'MLM' products and/or services, can then be regularly re-sold for a profit in significant quantities. However, since no gang of 'MLM' racketeers has ever proved that 'MLM' wampum has actually been regularly re-sold to the general public for profit in significant quantities,'MLM' participants have, in fact, been peddled infinite shares of their own finite money.

In the final analysis, other than their ephemeral external presentations, internally there is no real difference between all closed-market swindles; for any alleged 'opportunity to make money,' wherein (when challenged, and/or rigorously investigated) the promoters are unable to provide independent quantifiable evidence to prove that their alleged 'viable commercial activity' has had any significant, and sustainable, source of revenue other than its own losing participants, is self-evidently a dissimulated closed-market swindle.

David Brear (copyright 2013)


Sergei Panteleevich Mavrodi
(Сергей Пантелеевич Мавроди b.1955)

If you search for Sergei Mavrodi on Wikipedia, you will find him initially described as a Russian'businessman and financier.' However, the only truthful part of this exciting comic-book story is the fact that he was born in Russia; for, in reality, he is (without a shadow of a doubt) a megalomaniacal psychopath .


Sergei Panteleevich Mavrodi is suffering from a chronic mental disorder resulting in paranoid delusions of grandeur and self-righteousness, and the compulsion to pursue grandiose objectives.

Classically, Mavrodi believes himself not only to be a historically significant businessman and a financier,but also a morally, and intellectually, perfect Russian super hero who has been chosen to free humanity from the slavery of the evil world financial system. Indeed, if you watch the above video from 2011 (in which Mavrodi quite-openly admits that he is on a mission to destroy the pyramid scheme known as the world financial system and that his chosen weapon of mass-financial-destruction, is another, even more powerful, pyramid scheme), it beggars belief that he is not already locked up in a secure hospital.

In the aftermath of the unexpected fall of the Soviet regime (which left millions of ordinary Russians, particularly pensioners, facing destitution as the buying power of the once-protected rouble collapsed, and hyper-inflation took-hold) Mavrodi (an importer of office equipment) stepped-forward in the role of economic saviour and instigated what was soon to become one of the most-extensive closed-market swindles of all time, known as 'MMM.' http://en.wikipedia.org/wiki/MMM_(Ponzi_scheme) . It has been estimated that between 1992 and 1994, 30 millions ill-informed Russians were deceived into giving a total of several billions US dollars to Mavrodi and his criminal associates, in the deluded belief that they were all going to receive a future reward of 1000%. Typically, Mavrodi began to make the truth increasingly unthinkable, by using some of his ill-gotten gains to buy media advertising (including a series of humourous television commercials) as well as obtain public association with popular Russian sports, charities, celebrities and opinion-makers. 

In 1994, Mavrodi's offices were raided and he was arrested for tax evasion, but although millions of angry victims were left out out of pocket, he avoided being held to account by getting himself elected to the Russian parliament. During his election campaign Mavrodi steadfastly pretended that the Russian government was trying to destroy 'MMM' in order to steal the company's money, and that 'MMM' investors would only be paid out if he could influence the government from inside the political system. However, no pay-out was forthcoming, and Mavrodi's immunity from prosecution was cancelled in 1995. 'MMM' was finally declared bankrupt in 1997. Mavrodi then went of the run until he was arrested in 2003. During this time, he spread a rumour that he'd gone to USA. In reality, he'd probably never actually left Russia. Indeed, it is now believed that Mavrodi had been hiding in Moscow, protected by a well-rewarded gang of former Soviet intelligence agents/thugs/racketeers who had access to a labyrinth of safe-apartments.

With the help of a relative, Mavrodi instigated another closed-market swindle in 1998, this time known as 'Stock Generation.' His new scam was nothing less than an Internet-based counterfeit stock market. http://en.wikipedia.org/wiki/Stock_Generation, but it was dissimulated as a 'lawful gambling game' and was targeted at greedy Americans and W. Europeans. Largely because of its deliberately-incomprehensible linguistic, and mathematical, presentation, the essentially-simple closed-market swindle known as 'Stock Generation,' initially duped a United States District Court in Massachusetts, but it was closed-down by the United States Court of Appeals, when common-sense was finally applied in 2000. Few of Mavrodi's estimated 20 000 and 275 000 victims, complained even though they lost a estimated total of at least US$5.5 millions.

Following his arrest in Russia in 2003, Mavrodi was initially sentenced to 13 months prison for holding a false passport.  He was subsequently convicted of fraud and tax evasion, and was released from a penal colony in 2007.

Since 2011, Mavrodi has been running a closed-market swindle known as 'MMM 2011' or 'MMM India,' in which countless victims have been deceived into buying effectively-valueless pieces of paper printed to resemble an authentic, valuable currency, the so-called 'Mavro.' 

There are even 'Mavro' coins.

Amazingly, Mavrodi openly-admits that 'MMM 2011/ India' is a pyramid scam. He is widely-quoted as saying : 'It is a naked scheme, nothing more ... People interact with each other and give each other money. For no reason!' However, since Mavrodi's 'MMM' organization has exhibited the universal identifying characteristics of a cult, his activities are neither original nor unique and, consequently, they cannot be fully-understood in isolation.

Erich Hermann Wilhelm Voegelin (1901-1985), was a gifted German academic, who, in the decade preceding WW II (working largely-alone), produced an insightful explanation of ‘Nazism’ as a form of perverted religion or cult. Sadly, during the 1930s, few people took much notice of Eric Voegelin. 

Whilst teaching political theory and sociology at the University of Vienna, he published two books, ‘The Race Idea in Intellectual History’ and ‘Race and the State’. In these, he pointed out the elementary, mistakes which invalidated various, popular ‘racial theories’. In 1938, Voegelin (aged 37) tried to publish 'The Political Religions'. In this, he focused on contemporary totalitarian ideologies derived from the ‘racial theories’ which he’d previously criticised as absurd pseudo-science. He now pointed out the glaring structural similarities of these ideologies to religions. Courageously, Voegelin was comparing medieval pseudo-sciences and 'Gnostic' cults to the 'Völkish or ‘Pan-German’ movement and its terrifying post-WW I incarnation, the 'Nazi party'.

In 1938, the ‘Nazi’ leader, Adolf Hitler, had held absolute power in Germany for almost 5 years. He had just taken control of Austria. The self-gratifying ‘Aryan Master Race’ delusion was spreading like a virus. In essence, Hitler controlled his fanatical core-adherents with a  comic-book story in which he was a morally and intellectually perfect Aryan super hero, the 'führer,' on a mission to save his 'noble race' from the slavery of the world financial and political system which was controlled by an 'evil secret society of sub-human Jews, Freemasons,' etc.

The dozens of books, essays and reviews which Eric Voegelin published during his lifetime, are almost impossible for the average person to take in.

Eric Voegelin

To give readers some idea of the scale of his thinking, Voegelin’s Major work, ‘Order and History’, began to be published in the USA in 1956 when he was aged 54, but it remained unfinished when he died 31 years later. In simple terms, Voegelin was as a philosopher-historian who took an elevated, and broad, view. He observed that, throughout human history, there have been periods of mass-alienation... following wars, revolutions, plagues, natural disasters, economic depressions, etc. ... during these periods, dangerous manipulators (acting like ancient, Gnostic Prophets by pretending moral and intellectual authority and offering some form of Utopian existence in the here and now) who at other times might be dismissed as absurd crackpots and charlatans, have found it much easier to become accepted as authentic Messiahs and to acquire a mass-following.

Thus, Voegelin, not only described, but also predicted the arrival of the latest generation of economic alchemists, like Sergei Panteleevich Mavrodi.

David Brear (copyright 2013)


Wednesday, 24 April 2013


Beware of new online fraud;
police cautions public
Hyderabad: Andhra Pradesh Crime Investigation Department (CID)  on April 21 cautioned people not to fall prey to the new online fraud unleashed by Sergei Mavrodi, a Russian, who was earlier arrested in several criminal cases and underwent a term in prison.
Additional Director General of CID T Krishna Prasad said that Sergei has been promoting Mavrodi Mondial Moneybox (MMM) scheme through the website www.mmmindia.in, promising 100 per cent interest per month on the investments made by the people.
Minimum amount of deposit starts from Rs 5,000 while a member would be allowed to deposit a maximum of Rs 50,000.The Russian has been luring and duping gullible people claiming that the deposits were being collected for a social cause and to provide a platform for the like-minded people to help each other, the CID chief said.
The Russian claims on the website that Mavro is like any currency. It has two different exchange rates – one for selling and one for buying. The members could sell or buy Mavro using the special automatic software on the official website and the exchange rates would be decided by Sergei twice a week.
The website says deposits would be confirmed only after the member transfers full amount intended to deposit. The deposit would be released only after one month from the date of purchase, but it could be sold even before release at zero per cent interest rate, the website says.
The CID chief said that the scheme was already prevailing in Maharashtra, Gujarat and Punjab and was likely to enter Andhra Pradesh. Hence, he appealed to the people of the State not to fall prey to the bogus scheme.

Thursday, 4 April 2013

Indian Express-ICIJ probe: Vijay Mallya, Ravikant Ruia in tax havens

The 612 Indians on the list of those who have invested in tax havens such as the British Virgin Islands include two MPs, a former royal and top industrialists. RITU SARIN puts together details of 20 among them
Mirchandani is the founder of popular consumer electronics firm Onida. Mirchandani and his wife, Soni, opened a BVI company called Strong Wing Overseas Ltd in 2006 with an authorised capital of $50,000. Both are directors and shareholders of the company.
Mirchandani, however, said he did not recall opening such a BVI entity. "The personal details in the papers are mine. Maybe someone else has opened the company in my name," he said when shown the documents.
Teja is the eldest son of Ramalinga Raju, the disgraced former chairman of Satyam Computers Ltd. Teja is said to be the brain behind Maytas Infrastructure, whose planned merger with the software giant went on to unravel the alleged corporate fraud that sent Ramalinga Raju to jail for 32 months.
The Rajus set up two BVI companies, Global Network Overseas and Stapley Universal Limited. Teja Raju is listed as the beneficial owner of both but records show their current status as "defunct". Each company was registered with an authorised capital of $50,000.
Teja Raju denied any link with the companies. "Looks like a case of mistaken identity," he said.
An NRI, Ruia is vice-chairman of the Essar group, which has interests in steel, oil, gas and power. His company has been embroiled in the alleged irregularities in the telecom spectrum allocation of 2001-02; last month, a special court named Ruia an accused.He has registered three firms in the BVI and his daughter Smiti is a shareholder in two of them. Also, one of Ruia's flagship companies, Essar Power, has five BVI accounts with their authorised capitals ranging from $100 to $100,000.
Essar officials said that of the eight companies, five were liquidated in 2011 and 2012 and three are "existing and operational". They said necessary filings and compliance have been done in India in accordance with laws and Smiti has declared her holding in Paprika Properties Ltd and Paprika Holdings Management Ltd in her wealth tax returns. "These companies were started as SPVs to make investments and are in the knowledge of the authorities concerned," Essar said.
Bangalore-based Karuturi is the chairman of Karuturi Global Ltd, the largest producer of cut-roses in the world. He has diversified into farming and has leased 300,000 hectares of land in Ethiopia to produce cereals and edible oil.
In 2007, Karuturi registered companies in tax havens and with huge authorised capitals. He is shareholder or beneficial owner of six companies that have a collective authorised capital of $2.2 million. His wife, Anitha, is also a shareholder in one company, Maxworth Investment Ltd.
Reached in Ethiopia, Karuturi said he did not recall the companies and did not respond to subsequent calls.
The other MP on the list, Mallya registered a BVI company called Venture New Holding in 2006 with an authorised share capital of $50,000. Mallya, who has been in the news for the trouble over his Kingfisher Airlines and with the tax authorities, is the beneficial owner of the firm."Dr Mallya is a non-resident Indian with business activities in different parts of the world. It is common practice to use BVI registered companies in connection with such activities which are not confined to India alone. All disclosures in regard to Dr Mallya's wealth have been duly made to Parliament," a UB group spokesperson said.
Gaddam is a Congress MP from the Peddapalle reserved constituency in Andhra Pradesh. The seat was earlier represented by his father, former union minister G Venkatswamy. Gaddam, who has a MBBS degree, is an industrialist and owns asbestos firm Visaka Industries. He is also chairman of CII's Andhra Pradesh chapter.
Gaddam and his wife, Saroja, became directors and shareholders of British Virgin Islands (BVI) company Belrose Universal Ltd in 2009. The address mentioned in documents is the official Hyderabad address that is also mentioned in his Parliamentary records.
Reached for his comment, Gaddam said he was not aware of the existence of any such offshore company. "I do not remember being involved with such a company and have no connection with it," he said.
Son of Ludhiana-based business tycoon Vidya Sagar Oswal, Abhey is chairman of Oswal Agro Mills and Oswal Chemicals and Fertilizers and managing director of Oswal Spinning and Weaving Mills. In 1999, tax authorities raided his establishments for suspected evasion.
He is one of the biggest Indian players on the BVI list. Starting in 2006, he registered 11 companies in Samoa and the BVI and controlled them through the Rising Wealth Trust, registered in the Cook Islands. While the trust owns shares in several of the companies, Abhey owns shares in others. Abhey is the protector of the trust and his son Shael is the settler. The combined authorised capital of the 11 companies is $5.3 million."I have not registered any offshore firms. You must be in the knowledge of business entities of my son Shael Oswal, who is a Singapore resident and an NRI. My companies or myself have no relation whatsoever with his business or business entities," Abhey said.
Son of top industrialist K K Modi, who owns the diversified Modi Enterprises, Samir is an executive director in Godfrey Philips. He pushed the group's diversification by launching a string of new ventures such as Modicare, Colorbar and Twenty Four Seven.
His BVI company is called Gilvin Rock Enterprise Limited. He and his wife, Shivani, are joint directors and shareholders in the firm ,which has an authorised capital of $50,000. "The company was set up as a route for investments but hasn't done any business or trade transactions," he said.
Chetan Burman is a fifth-generation member of the Burman family, which owns the Rs 1,500 crore ayurvedic and food products brand Dabur. He was executive director of Dabur Nepal but has now branched out into other ventures.
Burman registered a BVI company in 2007 called Heavenly Bloom World Ltd. He is both director and shareholder of the company, which started with an authorised capital of $50,000.
Burman said the BVI firm was set up to route exports, mainly of honey, through Singapore but that plan didn't take off. "The company was set up through a verbal communication since I wanted to make Singapore the export hub for my products. But no trade transactions actually materialised and the company has thus remained dormant," he said.GAEKWAD RADHIKARAJE SAMARJITSINH
In January 2008, members of the former royal family of Baroda opened a BVI firm with an authorised capital of $50,000. The directors and shareholders of the company, called Brentwood Consulting Limited, are Gaekwad Radhikaraje Samarjitsinh, wife of Samarjitsinh Gaekwad, and her sister Kumari Meenal. The Laxmi Vilas Palace, one of the largest residences in the country, is given as Radhikaraje's address in documents.
She did not respond to questions sent to her.
The founder of MRF Tyres, the late K M Mammen Mappillai, was among those on the list of 18 people who had accounts in the European tax haven of Liechtenstein. It has now come to light that members of the MRF family registered a BVI company, Moon Mist Enterprise Limited, in 2007 with an authorised capital of $50,000. Its directors are Mammen Mappillai's two sons, MRF chairman Kandathil Mammen and its MD Arun Mammen. Kandathil's son Rahul Mammen Mappillai, also an MRF director, is the third shareholder.
Rahul did not respond to questions sent to him.
Dhingra is vice-chairman of Berger Paints, the second largest paint manufacturer in the country. In the BVI, Dhingra is the beneficial owner of a company called Crossley Hill Corporation. It was incorporated in 2008 with an authorised capital of $50,000.
Dhingra, however, denied any links with the company. "I have nothing to do with this company even though the address being quoted by you is my address. You must have got wrong documentation," Dhingra said.RASHMI KIRTILAL MEHTA & BHAVIN RASHMI MEHTA
The Mehtas are prominent Mumbai-based diamond traders, with a base in Belgium, and are facing allegations and action for parking money in offshore accounts. Rashmi is the son of patriarch Kirtilal Mehta and Bhavin is Rashmi's son. Some of their relatives, including Rashmi's brother Prabodh Mehta, were named in the list of 18 Indians who had accounts in the LGT Liechtenstein Bank. In April 2011, the family was raided by tax authorities and their tax evasion cases are under assessment.
Rashmi and Bhavin are directors and shareholders in a BVI company called Bapaji Inc. The company was incorporated in 2004. Another BVI company, called Dimension Worldwide Ltd, is linked to the Mehta
family but its status is described as "defunct".
The Mehtas did not respond to questions sent to them in Belgium.
Known as the Papad King, Murugesu is the chairman of the Lanson Group, involved in the manufacture and export of papads. The group also owns Lanson Toyota, a Toyota car dealership of which Reeta, Murugesu's wife, is the joint MD. They also own a biotech firm called Lanson Biotech involved in ayurvedic research.
Murugesu and Reeta are joint shareholders in a Hong Kong-registered Portcullis TrustNet company called Ready On Company Limited. The company was "sold" to the couple in 2008 and began with an authorised capital of HK $10,000.
Murugesu confirmed having set up the company. "We started the company for better tax planning but with full tax now required to be paid by export units like ours, no trading through it really materialised. We just thought it is better to pay full taxes," he said.
Breaking away from his family business of cotton trading and textiles, Murugesan launched the now-defunct Paramount Airways, a niche airline catering to the southern sector, and was its MD at the age of 28. He started five BVI companies in 2008, each with an authorised capital of $50,000. He is director and shareholder in all of them.
Thiagarajan confirmed the existence of the five BVI companies but clarified that they are "wholly owned" subsidiaries of Indian companies of the Paramount group and not individual holdings. "The BVI companies were opened with the aim of getting foreign investments in the textile business but that did not happen. So these are just companies on paper with very little or hardly any capital. Since the investments did not come in we did not activate the companies," he said.
Doshi is the chairman of Premier Ltd, formerly Premier Automobiles Ltd, one of India's oldest automobile manufacturers. He opened a BVI company called McGuffin Ltd in 2006 with an authorised share capital of $50,000 and is named as the beneficial owner.
"McGuffin Ltd has invested FDI in our Indian company with prior approval of the RBI. We regularly file all the required disclosures with the RBI as per their rules. All details of McGuffin have been given to the income-tax authorities as part of my local company's routine tax assessment, including audited balance sheets, shareholders list certified by auditors and details of investments made by it. All remittances by McGuffin have been made through HDFC Bank after due KYC checks," Doshi said.
Lohia is the CEO of Chamong Tee Exports, one of India's largest tea exporters. Lohia registered Golden Charm Universal and Golden Success Offshore Inc in the BVI in 2007 but these are now shown as "defunct".
Lohia did not respond to questions sent to him.
One of the three daughters of the late jute baron Arun Bajoria, Meenakshi and her husband Sharad Kumar Jatia are among the claimants to Bajoria's empire, valued at Rs 2,500 crore and the subject of family disputes.
The couple are named jointly as directors and shareholders in two BVI companies, Supreme Bonus Enterprises Limited and Plazzo International Management Ltd. Each was acquired in 2007-2008 with an authorised capital of $50,000. She did not respond to questions.
Mittal is a co-founder and vice-chairman of Indiabulls, the country's first e-commerce and Internet brokerage company.
BVI documents show Mittal registered a company named Alta Vista Development Corporation in 2008. He is both director and shareholder in the company, which began with an authorised capital of $50,000. He did not respond to questions put to him.
They are heirs to the 150-year old Khatau empire. Panna is the wife of Sunit Khatau, the late chairman of the group who was shot dead in 1994. She is chairman of their flagship textile firm, Khatau Makanji Spinning and Weaving Company. Neesha and Reena are her daughters and directors of the company.
In 2007, the three registered four companies in the BVI through Portcullis TrustNet and are either together or individually named as beneficial owners of the firms. In each case, the authorised capital is $50,000. Neesha did not respond to questions sent to her.