Biz Bazaar launches illegal scheme a la NMart

GREED always overwhelms people. There is no other explanation for the Future Retail Ltd, the largest conglomerate which runs chain of Big Bazaar supermarkets and other businesses, launching an illegal business proposal to make easy and quick money.
The Big Bazaar group has launched Profit Club card to enroll members into its illegal money circulation scheme with the promise of huge returns of about 22 per cent interest in the coming 12 months.
The Big Bazaar launched the scheme recently. It is offering Profit Club membership card by collecting Rs. 10,000 from the prospective members. After payment, the members are given a card in which Rs. 12,000 is loaded. The members can purchase 'certain' goods specified by the Future Retail Ltd management in the next 12 months at the rate of Rs. 1000 every month.
Sounds familiar. YES! This is the modus operandi of NMart which launched its membership drive and ended up facing criminal cases throughout the country.
It may be recalled that another group New Look Retail Ltd indulged in similar racket and finally its chief Gopal Singh Shekhawat ended behind bars for considerable time. The AP CID recently attached its properties and bank deposits situated at various places and banks. Its modus operandi is simple. Pay Rs. 5,500 and become a member to avail of 48 coupons each worth Rs. 200 to be exchanged with the goods in the NMart retail stores in the next 48 months. If the members enrolled more members into the scheme, they are paid Rs. 200 per membership. The NMart was not given any relief by any high court in the country and it was finally closed shop.
Exactly, it is going to happen to Big Bazaar too.
It is high time, authorities concerned take note of the illegal activities of the one of the biggest conglomerates in the country and nip it in the bud.

AP CID attaches properties of NMart

Andhra Pradesh Crime Investigation Department has attached the movable and immovable properties of Surat-based New Look Traders also known as NMart. The fixed deposits Rs. 2.61 crore parked in various banks throughout the country and immovable properties situated in Surat, Gujarat worth about Rs. 9.27 crore have been attached by the CID.

It may be recalled that following a complaint lodged by Vijayawada-based Corporate Frauds Watch, the then superintendent of police of Prakasam District Dr Kolli Raghuram Reddy registered a criminal case against the NMart for indulging in illegal money circulation scheme offering huge returns in a short span of time.

The police have also frozen the accounts of NMart at that time. The chairman of NMart, Gopal Singh Shekhawat, was arrested and thrown behind bars. The Prakasam police have also identified the immovable properties belonging to Gopal Shekhawat in Surat and other places after freezing the bank accounts in various banks throughout the country.

The NMart has mobilised deposits from people of various districts in the then undivided State of Andhra Pradesh and all over the country too. After enrolling members into the scheme by collecting Rs. 5,500 per member, the NMart also induced them to enrol more members into the scheme with an incentive of Rs. 200 per member.

Subsequently, the case was transferred to the CID for further investigation. 

The CID officials attached the properties which would be subsequently auctioned and deposited with the government. 

Ponzi schemer jailed for cheating US residents of $22 mn

Washington (IANS): If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer, jailed in the US for robbing his own people.

Vincent Singh, a Ponzi schemer, has been sentenced to 15 years and eight months in federal jail for preying on the members of his own ethnic Indian Fijian community in the Sacramento region.
In sentencing Singh, US District Judge Morrison C. England Jr. said his crimes were "the worst of their kind that I've seen in 12 years as a federal judge", sacbee.com reported Friday.
According to court papers, over a period of three years, Singh cheated 190 people of Indian Fijian descent who are members of a small, tight-knit community in and around Sacramento, out of $22 million. Then he filed for bankruptcy protection.
Singh, the 46-year-old native of Fiji and former Elk Grove city resident, pleaded guilty in March to wire and bankruptcy fraud.
Assistant US Attorney Matthew Segal, a top white-collar prosecutor in the US Attorney's office, found it hard to describe to Judge England the devastation left in the wake of Singh's merciless quest to get every dime his victims possessed.
"He knew the situation of his victims," Segal said. "He had been in their homes. They served him meals. He knew what the effect was going to be. He didn't just take their money, he took their lives."
The crimes were considered affinity fraud, which refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly or professional groups. 

Need to rein in Ponzi schemes

In what could be described as a welcome move, the Department of Financial Services of the Union Ministry of Finance has decided to clamp down on Ponzi schemes which are thriving throughout the country in the name of selling products and services. With several people fleeced by them filing criminal cases against these companies, the Union Ministry of Finance has woken up and taken stock of the situation. It augurs well for the Modi administration to get tough with the illegal money circulation schemes or Ponzi schemes by bringing in the toughest of norms to rein in the money circulation schemes and pyramid marketing businesses. The new norms, it appears, would include a detailed definition of ‘money circulation schemes’ to cover all money-pooling activities with a corpus of less than Rs 100 crore as well as those not covered under the collective investment schemes regulated by the SEBI. As the SEBI can only deal with illicit money-pooling activities with a turnover of Rs 100 crore or more, the ponzi operators are running at times multiple small schemes rather than a single big one. This has to be taken under consideration before framing of new rules to rein in all the ponzi schemes.

However, one has to wait and see the outcome of these proposals. In relation to the amendments to the PCMCSB Act, the draft proposals would be first discussed by various ministries concerned before they are placed before the Union Cabinet for approval. It would be better if the draft legislation is forwarded to the consumer organisations for their views as larger issues are involved. Since the Consumer Affairs Ministry has to decide whether to seek a separate legislation to cover the direct selling companies, these companies may lobby hard for legislation in their favour. The Enforcement Directorate decided recently that Amway alone has siphoned out Rs 8,000 crore illegally out of India. Against this backdrop, the Consumer Affairs Ministry should thoroughly look into all angles of the issue before preparing guidelines for direct selling. The Kerala State government has already prepared some guidelines in this respect, and the Consumer Affairs Ministry could well study them. As SEBI chief U K Sinha rightly pointed out, some action is required in the area of multilevel marketing (MLM) and PCMCSB Act. It is high time all the loopholes are plugged. In a welcome move, the Central government is said to be contemplating heavy penalties and even imprisonment for the managements of companies or individuals running such type of illicit schemes. It has been estimated that people all over India have lost about Rs 3 lakh crore in the schemes illegally run by these fraudulent companies. It is desired that the Union Ministry Finance should take a right decision to completely banish such schemes in the larger interests of people.  

The Editorial published in The Hans India newspaper on 18-10-2014

Govt turns down Amway's plea to amend PCMC Act

Plans to catch chit funds under Rs 100 cr that escape SEBI net

Aiming to tighten the noose on chit funds that have duped millions, the Centre proposes 
to crack down on all money collection schemes that would otherwise escape the market 
watchdog SEBI.
The Cabinet proposal plans to expand the definition of “money circulation scheme” in 
Prize Chits & Money Circulation Schemes (Banning) Act to include “unauthorised and 
unregulated collection schemes of corpus less than Rs 100 crore, which are excluded from 
the definition of ‘deemed collective investment scheme under SEBI Act.
A recent amendment in SEBI Act gives the market regulator powers to monitor all money-
pooling schemes involving Rs 100 crore or more and act against illegal ones through 
search and seizure, attachment orders and recovery proceedings. However, the high 
threshold would have meant that several small schemes slipped through the net.
Saradha-hit Government plans ordinance teeth for SEBI
Ponzi scheme—a fraudulent investment operation where an individual or organisation pays 
returns to its investors from capital from new investors, rather than from profit earned 
on existing investments — have been bursting on the national scene with great regularity. 
Rough estimates reveal that consumers have lost a staggering Rs 3 lakh crore by 
“investing” in or “buying products” from schemes floated by firms such as Saradha, Pearls 
Agrotech and Speak Asia.
Experts say over 30,000 registered chit funds in the country are regulated by state
registrars under the 1982 Chit Funds Act. But the Intelligence Bureau reported in 2012 
that “fresh” illegal financial activities of chit fund companies were cheating lower 
middle class and poor people, especially in rural and semi urban areas.
The proposed changes, prepared by Department of Financial Services (DFS), also drags in 
“pyramid marketing schemes” within the act with some safeguards to exclude selling of 
goods and services, but not those sales where there is no economic activity or addition 
of economic value save for creating a chain of new participants and distribution of 
economic benefits to the existing ones. The department has also turned down request of 
Indian Direct Selling Association (IDSA) – comprising biggies like Amway, Tupperware and 
Hindustan Unilever Network – to include direct selling schemes as an exempted category 
under Section 11 of the Act.
“Even when an exception clause is to be added to the Act to exclude the activities of 
certain direct selling companies, such provision is not desirable or acceptable, unless a 
very strong legal framework or registration, regulation and scheme of penalties for 
violation of the law on direct selling, is put in place,” says the Cabinet proposal.
“Therefore, till the time a law on direct selling is enacted and unless there is specific 
reference in that law on prohibition of money circulation and pyramid marketing, no 
exception may be created in the PCMCSB Act to exclude the direct selling activities,” 
says the DFS proposal.
However, it passes the onus of framing that law to the Ministry of Consumer Affairs. It 
suggests that the ministry examine the case for creating a new law on direct selling in 
consultation with other relevant ministries. Consumer Affairs, earlier this year, had
asked DFS to “provide clarity

Written by Amitav Ranjan | New Delhi | Posted: October 15, 2014 3:56 am
http://indianexpress.com/article/india/india-others/govt-plans-to-catch-chit-funds-under-
rs-100-cr-that-escape-sebi-net/

Magnetic pillows to a Rs 50,000 cr empire: How PACL, Nirmal Singh Bhangoo made it big

There have been many Ponzi schemes in India's history and then there's Pearls Agrotech Corporation Ltd ( PACL), a conglomerate that has investments ranging from a hotel in Australia to educational institutes. The company has now been instructed by market regulator Sebi to return Rs 50,000 crore to investors within three months.

On its website, the group says it began with a clear road map in 1996: to develop real estate properties; and led by one-time dairy owner Nirmal Singh Bhangoo the company claims it was traditionally involved in the sale and purchase of agricultural land.  Some reports claim that the group initially started out as Gurwant Agrotech, a company selling magnetic pillows and similar products after which it adopted the name of PACL India in 1998.

Since then it has expanded its interests to start a tourism website, educational institutes, a news channel called P7, hotels in Goa and north India, and commercial and residential complexes in and around Delhi. It also owns the 296-room Sheraton Mirage Resort and Spa in Gold Coast, Australia which it bought for a whopping $62 million and reportedly spent $30 million to renovate. Its real estate arm in Australia is reportedly constructing 1,000 apartments in Brisbane and land lots in Melbourne.

But behind the expanse of a business conglomerate, the group faces accusations of being little more than a Ponzi scheme with Bhangoo accused of running a pyramid investment scheme that has allegedly duped around 5 crore investors of around Rs 50,000 crore.

Sebi had initiated action against PACL as far back as February 1998 when it told the group that it couldn't launch any new schemes or continue raising funds under existing ones. The regulator even issued a notice to it in November 1999 alleging that it was operating a pyramid investment scheme.

Little is known about Bhangoo.

However, the company went to the Rajasthan and Punjab high courts claiming that it was involved in the business of sale and purchase of land and the matter finally landed up before the Supreme Court. The apex court passed an order on the matter in February 2013 asking Sebi to determine whether the group was running a ponzi scheme. However, the entire time the group continued to float new schemes and collect funds through existing schemes.

Defending the company against allegations, PACL CEO Jyoti Narayan had said that the company was a real estate company as it was the most profitable business.

"Therefore, this company does not come under the Sebi's, Irda's and RBI's terms and conditions. PACL is working under directorate of consumer affairs and PACL has also the membership of ficci. So, my friends don't worry about the your money....it is totally safe," he had reportedly said, according to the PACL website.

The group has over 280 branches and had over 8 lakh commission agents who helped it raise money through instalment and cash down payment schemes under which investors were lured with the promise of an interest rate of 12.5 per cent on deposits, in addition to insurance and tax free returns, a Daily Mailreport said.

The investors were promised that since the group invested in land their investments would multiply faster than other investments. The company even claimed that property consultants had valued their land at Rs 70,000 crore, despite the fact that some of it was desert land purchased along the India-Pakistan border in Rajasthan.

In February this year, the CBI filed an FIR against Bhangoo and seven others for allegedly raising money through a collective investment scheme with the promise of selling and developing agricultural land.

During searches carried out by the investigating agencies, CBI officials had claimed that they had recovered documents that showed benami properties worth crores in India and abroad. The CBI said that it had also found prima-facie evidence that one of the group's companies had raised money by issuing bogus land allotment letters.

In a detailed analysis of the group in India Today, Asit Jolly also points out that the group took a particularly keen interest in sporting events. The group sponsored the Kings XI Punjab squad in the fourth edition of the IPL and the India-West Indies series in the Caribbean in 2011, two years later it sponsored the Super Fight League fronted by Bollywood's Sanjay Dutt and Raj Kundra, and spent Rs 35 crore over four years on Punjab Deputy Chief Minister Sukhbir Badal's Kabaddi World Cup.

While PACL's former CEO, CEO Maj-Gen K.K. Bakshi (retd), reportedly quit just 10 days before the CBI raids began, little is known about Bhangoo's whereabouts and future plans remain as murky as his operations so far.

While reports claim the group may be putting its hotel in Australia on the block for $170 million, PACL has already said that it will be appealing against Sebi's decision demanding that they return all the funds collected so far. And given how delayed litigation has served them so far, PACL may just have some more time left before it reaches the end of its line.

Ponzi scheme nips career of soldier

Greed to make fast buck through money circulation scheme led to his fall

·         Poddar enrolls members in Amway and securedlives.com

·         Starts online campaign to rope in members

·         Pakistan spy induces him with naked photos

  The menace of money circulation scheme has taken its toll on the career of a soldier, Patan Kumar Poddar, who was arrested on Wednesday on charges of enticing people to join a ponzi scheme and in the transaction was honey-trapped by a foreign spy.

Poddar joined a dubious company which has been running a ponzi scheme for the last few years and started enticing his colleagues to join the scheme to make a fast buck. He started posting the business proposals on his Facebook profile. Interestingly, Poddar is also a member of Amway India Enterprises.

His position in the Army attracted the foreign spy who introduced herself as Anushka Agarwal and started flirting with him online. She claimed that she was studying M Sc in Jhansi in Uttar Pradesh. She offered to utilise his services for an online survey offering a remuneration of Rs 10,000 to Rs 15,000 per month. She started paying amounts regularly in various accounts of Poddar.

The spy had gone ahead to entertain him and posted her naked pictures and he started giving her a lot of information regarding the movement of field and medium regiments on the Western border and photographs of missile units. She had even sent a link to be installed in his office computer with which she could access any classified information without his knowledge.

The AP High Court had rightly said on the writ petition filed by Amway India way back in 2007 that inducement for aggressive enrollment of new members to earn more and more commission was inherent in the scheme of Amway India.

Subedar confesses to passing on defence secrets 

* Info on top 40 Army officers and their movements in Rajastan shared with the Pakistani Facebook friend

* Army denies he was in EME

* Tight security in Army units in TS, Chennai

* Pakistani mole reported to have transferred Rs 70,000-80,000 to his bank account

 Naik Subedar Patan Kumar Poddar of Army’s EME unit in Secunderabad who was arrested by Central Crime Station on Wednesday reportedly told the police that he had passed on the information of about 40 top army officials and their movements in Rajasthan to his facebook friend Anushka Aggarwal.

In a quick move, the EME on Thursday in a statement said that they had nothing to do with Patan and that he was not in EME.

A top police officer who was investigating the case said that Anushka had introduced herself as a scholar for getting insights into the country’s security details. She sought details of missile storage and other army positions in the country. Patan had revealed details of regiments and artillery centres in Secunderabad.

The police are also investigating the espionage issue and verifying the email and Facebook accounts. Sources said that they had already decoded some of the information on which they could lay their hands on.

Speculations were rife during day that National Intelligence and Army Intelligence agencies had sought the custody of Patan but police said that they had not received any such requests. If they wish to get his custody they have to approach the Court. “It is our case and we shall handle this,” said an Assistant Commissioner of police.

Police denied that Rs 10 lakh was transferred by Anushka to the account of Patan. They claim that about Rs 70,000-80,000 was transferred to his SBI account in Kolkata.

It is said that following  Patan’s revelation of sensitive information to Anushka  the security at the Army units of Telangana and Chennai had been beefed up. All the important units were shuffling their personnel in the region, sources added.   

Glaze Trading India aka GALWAY takes unemployed youth for a ride

Glaze Trading India aka GALWAY takes unemployed youth for a ride

In what could be described as the copycat of Amway, Glaze Trading India aka GALWAY, started its cheating operations throughout the country. At least 10,000 youths from all over the two States of Telangana and Andhra Pradesh have already been cheated by this fraudulent company according to series of visuals telecast by TV6 Telugu news channel.  

https://www.youtube.com/watch?v=fSh5dv3tbZI

The news channel exposed the dubious ways of this company which has been inducing youths with job opportunity with a monthly salary of Rs. 50,000. However, they were asked to pay Rs. 8,000 for securing the job. After reaching their office in the state of Jharkhand, they were asked to enroll at least four members each to earn unlimited income. Then they realised that they were deceived.

The youths were asked to stay in a dungeon and they were hardly given any work though they were promised to undertake bar-coding, creating e-mail IDs and other works. Dejected, these youths returned to their places.

Aglance at its website, http://www.globalglaze.in/company/our-management/ shows that it also sells products for homecare, personal care, biofertiliser among others. The products include G-PSEUDO+, G-DERMA+ both controls root diseases of plants , G-SEAPOWER, which contains seaweed to act as growth promoter. They also sell air-fresheners, toilet cleaner, floor cleaner among others.

Anyway the sense of humour of these fellows should be appreciated. They are openly claiming that it is ‘pseudo’ and selling it. Don’t ask what ‘derma’ has got to do with bio-fertilizer.

Behind all the product sales under direct selling mode, the real cheating is illegal money circulation scheme. This is how Amway has been inspiring many a crook to indulge in illegal money circulation schemes in the name of direct selling.

Why these two gentlemen remain behind bars?

Subrato Roy 
Since March 4, he has been behind bars

For the last nearly two months in jail

Court rejects bail plea of Amway chief

Our Bureau

Warangal: A court here on Thursday rejected the bail petition submitted on behalf of the managing director and chief executive officer of Amway India Enterprises William S Pinckney who was arrested in a criminal case recently.

An engineering graduate, Anurag, lodged a complaint against the multilevel marketing company on the charges of cheating people with illegal money circulation scheme in the name of selling products. He said in his complaint, the company in the name of selling products was actually into illegal money circulation scheme. The Subedari Police Station after receiving the complaint filed the criminal case against the US-based company and arrested the MD and CEO of Amway India William Pinckney..

The counsels of Amway India filed the bail petition in the court for the release of William Pinckney who has been in jail for the last six weeks. However, the court rejected the petition.

http://epaper.thehansindia.com/PUBLICATIONS/THEHANSINDIA/THI/2014/07/05/ArticleHtmls/05072014002001.shtml?Mode=1

Cops tracking ‘Diamonds’ of Amway

Hyderabad: The top police officials of the two States of Andhra Pradesh and Telangana have launched a massive hunt to track down the ‘Diamonds’ and other members of Amway India Enterprises to make sure their role in the multilevel marketing scam of the US-based company.

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According to informed sources, the police of both the states are even sharing information regarding the list of upline members in the hierarchy of Amway India Enterprises, who share commissions on purchase of products by the downline members. The sources said that in the business model of Amway, the upline members who enroll new members into the scheme of purchasing products received sizable income which was nothing but easy and quick money. “Once the list of the ‘Diamonds’ is prepared and their income on commissions is confirmed, we go ahead with arresting them also,” the source said.

Meanwhile, the police on Monday arrested the MD and CEO of Amway, William S Pinckney, who is presently in Charlapalli Jail and presented him in the judicial court which sent him to remand for 14 days. The MD was sent back to Charlapalli Jail. It is learnt that the police would file a petition in the court seeking custody of Pinckney for interrogation to take the criminal case against him to a logical conclusion.

A police official said that the law would take its own course and charge sheets would be filed soon in the criminal cases against Amway India. In another twist to the criminal case against the MD of Amway, the High Court did not issue any orders on the petition filed by Amway India to exempt its managing director Pinckney from surrendering the passport to the police department. However, the passport surrender order issue has become an impediment for the release of Pinckney on bail. 
 http://www.thehansindia.com/posts/index/2014-07-02/Cops-tracking-%C3%A2%C2%80%C2%98Diamonds%C3%A2%C2%80%C2%99-of-Amway-100323

Delhi resident lodges police complaint against Amway India

More often than not, the apologists of Amway India say that Amway India is facing problems only in Andhra Pradesh but nowhere else in India. The critics even go to the extent of blaming one police officer who they claim to be holding a grudge against the company. It is proved wrong once again. Last year, the Kerala police filed criminal cases against Amway India arresting CEO and MD William Pinckney. Here is another instance to prove the critics wrong. This is time it is in the national capital New Delhi.

New Delhi (ANI) Direct marketing firm Amway India has been facing some tough times of late; and its troubles don't seem to be ending any time soon.  In the past year, the company and some of its key officials  have been charged with financial irregularities.

In  May last year, its chairman and CEO William S Pinckney and two directors were arrested by Crime Branch officers for violating various provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

And now, a Delhi resident has lodged a police complaint accusing Amway India of being involved in a scam allegedly worth over Rs.2000 crores.

According to the complainant, Kiran Pal, key officials of Amway India, including Pinckney and Chief Marketing Officer Sundeep Shah, allegedly adopted restrictive trade practices that resulted in misrepresentation, and the sale of inferior quality health, beauty and nutritional products.

In documents provided by Mr. Pal, he has claimed in his complaint that an Amway Enterprises Limited distributor lured him with the prospect of becoming an Independent Business Owner (IBO) and achieving complete financial independence.

According to the documents provided to the authorities, Pal has said his wife used one of Amway's eyeliner products, and thereafter, had to undergo costly medical treatment for burnt eye lids.

Based on Pal's complaint, the Civil Lines police station has issued a notice to the Amway India's offices in Sector 32, Gurgaon, seeking clarifications on the method of its operations, and details of agencies, if any, that verify Amway's products.

Amway India has not given a response or a statement with regard to this complaint, despite repeated attempts to contact them.

http://www.business-standard.com/article/news-ani/delhi-resident-lodges-police-complaint-against-amway-india-114031600236_1.html

Pinckney is not willing to execute the bail bonds for his release: Kurnool police. Amway keeping him in jail to bring pressure on Indian Govt for his release

The Kurnool District Court granted bail to CEO and MD of Amway India Enterprises, Mr William S Pinckney, more than a week back. But Amway India officials so far have not come forward to secure his release on bail. What could be the reason? 

The Amway India Enterprises’ counsels and the bosses of Amway in the USA have been attempting to bring pressure on the Indian Government to release Mr Pinckney unconditionally. The Amway officials appears to have felt that more time Mr Pinckney remains in jail, he could garner more sympathy. In order to increase the pressure on the Government they are keeping Mr Pinckney in jail. It is entirely the fault of the Amway authorities in making the CEO and MD of Amway India languish in jail.

Secondly, the District Court set as one of the conditions for bail that Mr Pinckney should surrender his passport to the court. The Amway authorities could not digest this condition. They pleaded that Pinckney has been living in the country for the last 16 years and he would not escape to other countries. The court did not agree to the contention and stuck to its position for the surrender of the passport.

In fact, the Nampalli Metropolitan Magistrate Court should have demanded the surrender of passport seven years back when a criminal case was filed against Amway India by the CID of AP. For reasons better known to the then judicial officer, there was no such demand.

At least this time, the district court of Kurnool set the condition. Once he surrenders the passport and fulfil the other conditions, he would be set free. Then only he could obtain bail from other courts including Warangal, Khammam, Hyderabad and other places.

Why Mr Pinckney is not willing to surrender his passport?

In the case, he is convicted and sentenced he might escape to the USA or Australia to avoid jail term. That is why the judicial court is demanding surrender of his passport.

That exactly is the point why the bigwigs of Amway from the USA are spreading canards that Pinckney was illegally detained and harassed.

In fact, he was legally arrested for indulging in a criminal activity and he could secure bail by fulfilling the conditions set by the judicial authorities.

Meanwhile, the journalist friends in New Delhi told Corporate Frauds Watch that Amway officials are seen moving in the lobbies of Parliament trying to impress upon the newly-elected members of Parliament for the release of Mr Pinckney.

Enforcement Directorate finds illegal siphoning of Rs. 8,000 crore by Amway India to USA

The Indian Enforcement Directorate authorities have found after a thorough investigation that Amway India has illegally siphoned out of the country Rs. 8,000 crore (Rs. 80 billion) to the USA. The Directorate has issued a show cause notice to Amway India Enterprises to that effect.

“The multilevel marketing company Amway India has siphoned out Rs. 8,000 crore from India illegally,” a top official of Enforcement Directorate said.

He also said that the Enforcement Directorate has been probing violations of Foreign Exchange Management Act (FEMA) indulged in by Amway India.

“We have issued show cause notice to Amway after completing the investigation. The violations regarding FEMA are being looking into for the repatriation of Rs. 8,000 crore in the past ten years, said the ED source.

The Corporate Frauds Watch has been raising the issue with the officials at various levels for the last several years that there were violations and the Amway India has been illegally siphoning out large scale funds from the country.

Amway India has been claiming that it is investing Rs. 500 crore for setting up a plant in Tamil Nadu. But the fact is that it has illegally siphoned out the funds up to Rs. 8,000 crore and Rs. 500 crore is just peanuts.

In the name of multilevel marketing, the fraudulent company has been milking the Indians. It is high time people realised the fraudulent activities of Amway India. The Corporate Frauds Watch estimated that Amway had siphoned out Rs 10,000 crore during the last 15 years of its existence in the country. Now the cat is out of the bag and the Central Government should take initiative to curb the illegal business activities of the multilevel marketing company.

Amway India enacting drama keeping Mr Pinckney in jail instead of obtaining bail

CEO and MD of Amway India Enterprises Mr William S Pinckney is still in jail. For reasons better known to the counsels of Amway India, they have not filed bail petitions in courts where the criminal cases were filed against the fraudulent company. In India, bail is  rule and jail is an exception. It appears that Mr Pinckney is enjoying his jail time with all the facilities he could buy in Indian jails. 
In the meanwhile, the Amway India unleashed a huge propaganda blitzkrieg in the media including electronic and print all over the country stating that Mr Pinckney was illegally 'detained'. It appears they do not know the meaning of detention or they do not make the difference between detention and arrest. No judicial court in India will send anybody, let alone an American-Australian citizen, behind bars without prima facie evidence. 
The latest is the article published in The Economic Times of India by the US-based chiefs of Amway. What these bigwigs conveniently forget is that India is an independent and democratic country and it has an independent judiciary. Unless there is prima facie evidence, no court in India will take cognizance of a crime and send the accused to judicial custody. 
As per the existing law of the land, the business Amway India Enterprises is doing in the country is illegal. The Andhra Pradesh High Court in its judgement based on the affidavit filed by Amway India itself regarding the business model of Amway, stated, "Inducement for aggressive enrolment of new members to earn more commission is inherent in the scheme – Scheme provides for sufficient inducements for its members to chase for new members to make quick  easy money – By promising payment of commission on the business turned out by down-line members sponsored either directly or indirectly by the up-line members constituting a contingency relative to enrolment of members, first petitioner (promoter) is earning quick / easy money from its distributors apart from ensuring its distributors to earn quick/easy money – The two ingredients are thus satisfied in the case of promoter too – Held that the scheme run by petitioners squarely attracts the definition of ‘Money Circulation Scheme’ as provided in Section 2(c) of the Act.. " 
As is evident from the contentions advanced on behalf of the petitioners as noted earlier, the petitioners have taken the stand that there is no quick or easy money involved in the scheme and that the money which the sponsor member gets does not depend on any event or contingency relative or applicable to the enrollment of the members into the scheme.  But on a careful analysis of the true nature of the scheme as explained above, it is quite apparent that one of the components of the income earned by a sponsor member is the commission which is calculated not only on the personal PV of the sponsor member, but also from the PV earned by all the remaining 102 members falling within his group.  There is, therefore, no gainsaying that a substantial part of the income which the first sponsor member of the group gets depends on the event or contingency relative or applicable to the enrollment of members into the scheme.  This conclusion can be tested by a further analysis of the income figures given in the earlier paragraph.  Supposing the sponsor member at the top does not introduce any member and if he merely sells the products given to him, he gets an income of Rs.12,420/-.  If he sponsors only six people and they in turn do not sponsor any member, then he will get an additional income of Rs.23,760/-.  If those six members whom he sponsored again sponsor four members each, he will get a further income of Rs.1,14,480/- and if the 24 members sponsor three members each, he will get a further sum of Rs.6,83,300/-.  Thus the money which the member at the top of the line gets depends upon the members whom he enrolls or the members enrolled by him enroll. (Para 28).

When the judgement is crystal clear that the company is making easy and quick money in the name of selling products, the American operators have been time and again stating that their business model is legal. The Amway may be running in several countries where there is no law banning illegal money circulation scheme. But in India, there is a law which prohibits illegal money circulation schemes. 

Let us look at Section 2 (c) of PCMCS Act, 1978. "Section 2 (c) “money circulation scheme” means any scheme, by whatever name called, for making of quick or easy money, or 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, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions: 

The law clearly says 'for the receipt of any money, or valuable thing as the consideration for a promise to pay money". Here valuable thing is the product which Amway is offering to its members. There is no ambiguity in the law. The American businessmen are spreading canards time and again that the law is ambiguous. 

The long article published in The Economic Times of India has conveniently skips the High Court judgement which pronounced the business model of Amway is illegal. They also do not mention that the Supreme Court of India also upheld the judgement of High Court after Amway India filed a special leave petition in the apex court.

Why there is a hue and cry when a criminal on a proven charge of running illegal money circulation scheme is arrested? There are asking for the release of Pinckney as if he was detained illegally. They could simply file a bail petition and walk out of the jail. But they are enacting a drama to gain sympathy. 

If anybody wants to do business in any country, they have to respect the law of the land and do their business accordingly. If anyone acts against the law, he or she will be arrested and put behind bars.

Just go through this article published in the Economic Times of India to know how the American heads of Amway are distorting the facts in the criminal case.

http://economictimes.indiatimes.com/news/international/business/amway-urges-
government-to-help-secure-release-of-its-india-head/articleshow/36849102.cms

Amway urges government to help secure release of its India head 

Amway India's CEO Bill Pinckney was arrested on May 26 at Amway's headquarters in 
Gurgaon. At the time of this writing, he remains in police custody. This continued 
detention and harassment must end. Amway is a reputable company with 55 years of 
operating legally and ethically in more than 100 countries and territories 
worldwide. 
And while the newly elected Union government in New Delhi played no role in this 
police action, we ask their help with the immediate release of Bill so he can be 
quickly and safely return to his family. To continue with this investigative 
retention when we have fully cooperated with all investigations and requests from 
authorities in India - including Andhra Pradesh - is unnecessary and unreasonable. 
Whenever our business model has been questioned, we have shown up to provide 
answers. We have made every effort to be entirely transparent and forthcoming with 
authorities. If there is a problem, we want to fix it so we can continue to do 
business in India. 
The underlying issue at hand is the lack of clear direct selling regulations that 
distinguish legitimate businesses like Amway from dishonest ones. 
Additionally, provisions of the Prize Chits and Money Circulation Schemes 
(Banning) Act seem to be misapplied against Amway. An amendment to this Act - or 
even new legislation - is something we have been working toward for some time. 
Hopefully, these recent events call greater attention to the immediate need for 
fair and balanced direct selling legislative guidelines. Fortunately, the newly 
sworn in Modi government's probusiness agenda is actively working to create an 
environment that will welcome foreign direct investment. This makes us hopeful we 
will be able to collaborate with them to find solutions that work for everyone. 
With similar situations in other markets in the past, we have successfully worked 
alongside government officials to resolve issues and we feel confident we can do 
the same here. 
Since opening in 1998, we have seen firsthand the potential this market holds. 
Amway India has grown into one of the top 10 global markets for the company, 
selling more than 140 high quality products - most of which are manufactured in 
India. We employ close to 500 people and have more than 550,000 distributors 
across the country. Our philanthropic efforts in India have helped nearly 100,000 
children including visually challenged students in in need of educational and 
vocational tools. 
Amway is not alone in seeing the opportunity in India. The World Federation of 
Direct Selling Associations brought industry CEOs to India earlier this year to 
learn about doing business here. They too saw this potential firsthand and left 
feeling excited about their prospects for the future. Events like this however, 
may cause them to rethink investing in the Indian market. 
Despite the challenges we currently face, we remain firmly committed to doing 
business in India. We will not abandon the hundreds of employees and hundreds of 
thousands of distributors who are working to build businesses for themselves and 
their families. In fact, we will continue to expand our investment in India in 
many ways. This includes a new USD $100 million state-of-the-art manufacturing 
facility in Tamil Nadu. Our goal is to help Indian citizens reach their potential 
through a business of their own. When we say we're committed to their success, we 
mean it. 
To be clear, our top priority is the immediate release of Bill. We will continue 
to answer any questions any person may have about our business. And we stand ready 
to work with India's new Union government to develop clearer direct selling 
legislative guidelines to ensure events like this never happen again. 
(The authors of this article are Amway Chairman Steve Van Andel and President Doug 

DeVos)  

Pinckney’s statement proved the crime: Dr K Raghuram Reddy

Superintendent of Police Dr K Raghuram Reddy said that the interrogation of the managing director and CEO of Amway India Enterprises William Pinckney has betrayed the business model of the fraudulent company which is nothing but an illegal money circulation scheme in the name of selling products 'directly' to the consumers.

The SP said that the CEO has stated that there was payment to the upline members proving beyond reasonable doubt that there was sponsoring of members into the scheme. Section 2 C of Prize Chits and Money Circulation Schemes (Banning)Act specifically prohibits sponsoring of members. Section 3 prohibits enrollment of members into the scheme, he added.

He said that William Pinckney has admitted during interrogation that Amway India has paid Rs 620.59 crore for the year 2011-12 as commission to the upline members in the chain link scheme of Amway. For the year 2012-13, Amway has paid Rs 621.86 crore as commission and for 2013-14 the company has paid Rs 569.10 crore to the upline members in the chain scheme.

The managing director and CEO of Amway has also admitted that Amway has received Rs 33.4 crore for 2010-11 through renewal of membership fee, Rs 40.2 crore for 2011-12 and Rs 40 crore for 2012-13, the SP said. “The AP High Court pointed out that the collection of renewal membership is nothing but easy and quick money earned by Amway,” he added.

The total sale of products was Rs 1838 crore for 2010-11, Rs 2150 crore for 2011-12 and Rs 2191 crore for 2012-13, according to the statement signed by the Amway MD.

Referring to the gross profit of Amway, Pinckney said that Amway earned a gross profit of Rs 437.6 crore for 2011-12, Rs 478.8 crore for 2012-13 and Rs 304.7 crore for 2013-14.

Pinckney has also admitted that the annual advertisement budget for Andhra Pradesh alone was Rs 2.3 crore for the current financial year.  

Pinckney to spend some more time in Indian jails

It has been twelve days since managing director and CEO of Amway India Enterprises William Scott Pinckney was taken into custody by Kurnool police. Since then he has been spending his time hopping from jail to jail in the two states of Telangana and Andhra Pradesh. It appears that it would take some more weeks before he secures bail to get released from the jail. There are multiple criminal cases filed against the accused on the charges of indulging in illegal money circulation scheme in the name of selling products.

Any police officer who has a look at the Andhra Pradesh High Court will never think twice to register the criminal case against Amway India. The judgement is well-written and highlights the intelligence of the Indian judges in analysing a racket designed by Amway to loot the gullible people all over world.

Nowhere in the world were criminal cases filed against Amway. It surely is the efforts of an untiring IPS officer VC Sajjanar, who unearthed the racket and brought the culprit to book.

Earlier, he unearthed the racket of Japan Life and Wonder World racketeering. However, whenever he arrested the guilty, the accused used to say that why the police are not taking action against Amway which is following the same business model.

As soon as he assumed charge as the superintendent of police of Economic Offences Wing, VC Sajjanar arrested the kingpins of Amway India and booked criminal cases against the company and its director-members. The rest is the history.