tag:blogger.com,1999:blog-20203003542685481282024-03-18T08:29:27.594+05:30Corporate Frauds WatchShyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.comBlogger1358125tag:blogger.com,1999:blog-2020300354268548128.post-71726445540710129982019-01-08T21:40:00.002+05:302019-01-08T21:43:08.176+05:30Bursting of Fraudulent MLM Scheme “Q Net” by Cyberabad Police <div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC8fyaMjM33eLFZ35cWGsFI4m2F1k7ol0xusVz8Enx0Mpb-rSXAcueOO8aGGovyaGIUzBBdlufm8ixbWu2nxl7ntrK7BnlLueQsXydZ-FXk3ylEvpVA82wHQDYjJBMcgEyE8H4_CDirik/s1600/PHOTO-2019-01-08-21-13-22.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="519" data-original-width="404" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjC8fyaMjM33eLFZ35cWGsFI4m2F1k7ol0xusVz8Enx0Mpb-rSXAcueOO8aGGovyaGIUzBBdlufm8ixbWu2nxl7ntrK7BnlLueQsXydZ-FXk3ylEvpVA82wHQDYjJBMcgEyE8H4_CDirik/s320/PHOTO-2019-01-08-21-13-22.jpg" width="249" /></a></div>
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<b>Cyberad Commissioner of Police V.C. Sajjanar </b> </div>
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This is a clear cut case of cheating by the Vihaan Direct Selling Pvt. Ltd. Company- A sub franchisee of QI Group in India marketing under brand name of QNet. This case is cracked down by the sleuths of Cyberabad in various parts of Telangana, Andhra Pradesh, Bengaluru and Delhi, in which 58 persons were arrested in 14 cases which were registered against Vihaan Direct Selling Pvt. Ltd. Q Net in different Police Stations of Cyberabad. There are total 30 cases registered against QNet Company in Cyberabad. There are 08 cases which are under investigation with CID, TS. </div>
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Vihaan Direct Selling Pvt. Ltd. formerly known as GoldQuest, QuestNet, is a Hong Kong-based multi-level marketing (MLM) company owned by the QI Group. The company invokes many Ponzi schemes and Binary Schemes, Product-based, Vacation Packages etc. business tactics which are illegal. </div>
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QNet, the main subsidiary of the QI Group of Companies was founded by Vijay Eshwaran and Joseph Bismark in Hong Kong in 1998. Trevor Kuna (joined Q Net in 2008) who was Chief Marketing Officer is said to be appointed as CEO of Q Net. Michael Ferreira and Malcolm Desai are the shareholders of Vihaan Direct Selling Pvt. Ltd. Now it operates in a number of countries like India, Philippines, Cambodia, Nepal, Indonesia, Turkey, Saudi Arabia, Russia and etc. In India, Q Net has appointed Vihaan Direct Selling Pvt. Ltd. as its sub franchisee. Dilipraj Pokkella and Md. Imthiyaz are said to be the directors of Vihaan Direct Selling Pvt. Ltd. </div>
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The Q-net / Vihaan promoters give motivational lectures to the unemployed youth and also to the homemakers stating that there is business project which will yield huge profits to them. Once the customer joins i.e., absolutely by paying cash or on line transaction to the upliner/ Introducer person or to the Vihaan account (Q-net franchisee), an User name and Password will be generated, but the Password will not be given to the down line ID person and it will be with the upliner only in the Q-net web. </div>
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MO - Business Model:</div>
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<span class="m_3153579962892432927Apple-tab-span" style="white-space: pre-wrap;"> </span>At first the Q-net / Vihaan promoters say to the new comers that there are various business projects such as Cost Optimization Business, Health and Wellness products, Watches and Jewelry, Personal care and beauty, Tour Packages, Education Packages (SMC MBA Certification) etc,. The promoters trap the new comers with sweet words stating that they will be a part of the Q Net Kingdom where they can build their own future. They say that if the new comers who paid money don’t like Q Net business packages, they can claim their refund within a month. But in fact the promoters will drag the one month period by giving motivational classes, training sessions and also providing books such as The Parable of the pipeline, Questions are the answers, The Business School, Who Stole the American dream, The Copycat Marketing 101 and Talk the talk, to the new comers and tell them to read all the books to gain knowledge over the business. Once the new comer joins into the Q Net/ Vihaan Business through a referrer/ promoter he becomes Independent Representative (IR). After paying the money the new comer gets some products and the promoter gets commission. The promoter then says to the IR that to get money he/she has to enroll two other members and they in turn join two each other new comers. As the number of persons increases down the line the upliners get more money as commissions. </div>
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The Q Net/Vihaan business model is a simple pyramid scheme in which the early entrants earn money and as the number of independent representatives (IR) increases, finding more IRs (New Comers) to join becomes difficult or impossible. IRs that joins late does not earn enough to cover their first outlay and the model collapses. It works as a binary scheme. Down the line the number of persons to be joined becomes difficult or impossible. The scheme collapses at a point of time. </div>
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The company has various combinations of product based packages to the new entrants based on their payment. But, the new entrants will not have an iota of knowledge about the products and their quality. They even do not bother to verify the quality of the products as they are interested only in the huge monetary returns the company has promised for them. <span class="m_3153579962892432927Apple-tab-span" style="white-space: pre-wrap;"> </span></div>
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Arrests, Search and Seizure:</div>
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Total (58) persons were arrested in (14) cases which were registered against Q-net and Vihaan Direct Selling Pvt. Ltd. in different police stations of Cyberabad are arrested. The Godown of Vihaan direct selling Pvt. Ltd. at Bangalore and the office of Transview Enterprises (A Marketing Agency for Q Net products) are seized. An amount of Rs. 2.7 crores is freezed in the Bank account of Vihaan Direct Selling Pvt. Ltd. The bank accounts of accused persons involved in the cases are also seized. </div>
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Total arrests- 58 persons </div>
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Bengaluru- 05, Delhi- 01, Eluru- 01, Hyderabad- 51</div>
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<b>Nativity of the arrested persons:</b></div>
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A.P.- 05, Telangana- 42, Karnataka- 05, Gujarat- 01, Delhi- 01, Odisha- 01, West Bengal- 03<br />
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<b>Background of the Company- its origin and fraud:</b></div>
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The prize chit / benefit / savings schemes benefit primarily the promoters and do not serve any social purpose. – Report of James S.Raj Study Group to the RBI in 1975 on deceptive money circulation schemes in the country. </div>
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Qnet (brand under the company Vihaan Direct Selling (India) Private Ltd) is the latest avatar of the former money circulation companies GoldQuest International Private Ltd, QuestNet Enterprises India Private Ltd promoted by the QI group. </div>
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The promoters have been forming new companies as and when the law enforcement agencies start taking legal action against their money circulation frauds based on public complaints across the country. Also, to deceive the new-entrants to their network of money circulation, they come up with new brand every time they legally and socially exhaust themselves. </div>
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Their Pyramidal structure of so-called direct sales involves enrolment of a common person based on a payment which the promoters dupe as buying of a product and annual registration fees. Such person will be called an Independent Representative. They receive commissions based on the further enrolments they bring in to the scheme. Such enrolment linked payment of commission schemes are banned in India as per ‘The Prize Chits and Money Circulation Schemes (Banning) Act, 1978’. </div>
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But, the promoters of Qnet have been claiming that they are selling products through direct selling mechanism and are not enrolling persons and that the commissions are paid for sale of products and not for enrolling new members. </div>
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The promoters have been indulging in deception tactics to circumvent the surveillance of law enforcement agencies and the judiciary.</div>
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“In fact, deception is the key to propagate the pyramid schemes as the newly-to-be recruited person is to be convinced of buying the opportunity (i.e., of earning huge and life changing commissions) rather than of convincing him/her of buying/selling the product. Here, the business opportunity is sold i.e., of earning huge commissions and the seller gains only through payment of commissions to him by enrolling more members on his chain. “</div>
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Key difference between direct selling and Pyramid schemes : </div>
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In direct sales, the person making sales gets maximum commissions and his uplines get lesser than him.</div>
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In pyramid schemes, the primary seller at first dose not get anyc omission but as the pyramid beneath him grows, he gets massive commissions far in excess of primary seller/recruiter. This motivates persons to recruit rather than to sell directly to earn huge money. </div>
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Deception through products:</div>
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Adding a product to the pyramid scheme is the latest trend in the evolution of such money circulation schemes. They target the most vulnerable section of the society. The products are mostly unbranded; sourced from mostly unscrupulous agencies ; are valueless and are sold typically overpriced many times their actual cost in the name of magical remedies or craftsmanship or uniqueness etc. This huge exaggerated margin enable the promoters to pay commissions to some extent. </div>
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They falsify all records of accounts, as they totally control the data. The promoters also create false pyramids to siphon of money in the name of payment of commissions. </div>
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These kind of companies also pose serious threat to national security as the overseas promoters control huge personal data of persons including government servants and siphon of huge money from the country. </div>
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When legal action is taken, the promoters fight vehemently in the courts and approach the victim complainants and they usually try to compromise with the victims by returning their money. If the victim is socially, economically weak, they try to bully or deceive him/her to silence. This has lead to lot of criminal incidents across the country. </div>
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The victims of Qnet and its former companies have formed into an association based in Mumbai and legally fighting it out to bring the promoters to the books of justice and are also putting efforts to create awareness among the most vulnerable sections in society, particularly the youth.</div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com76tag:blogger.com,1999:blog-2020300354268548128.post-21414407918470281002018-12-03T19:03:00.004+05:302018-12-03T19:03:52.838+05:30The losing battle of AgriGold depositors<div dir="ltr" style="text-align: left;" trbidi="on">
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> * </span></span></span><!--[endif]-->It is unreasonable to demand the government to
pay the taxpayers’ money to depositors</div>
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<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> *</span></span></span><!--[endif]-->The High Court should form a committee and sit
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It is really pathetic that after so many months,
the AgriGold tangle is yet to be resolved and several thousands of crores of
rupees is still with the unscrupulous businessmen who induced the gullible
people to invest in their ventures.</div>
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A glance into the past reveals that the AgriGold Company
started collecting deposits from people on the pretext of allotting them house sites
and selling them real estate. It squarely attracted the provisions of the
Andhra Pradesh Protection of Depositors Act which clearly prohibits the
mobilization of deposits. The AgriGold collected money even from the street
vendors with the inducement of huge interest on their deposits. For instance, a
street vendor is asked to deposit ranging from Rs 10 to Rs 50 everyday. He
could deposit the amount for 900 days and collect the matured deposit after
completing 1000 days. If he pays Rs 10 a day, he could collect Rs 10,000 after
the maturity period. This is how they are induced.</div>
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In addition to this, the AgriGold also collected deposits
through their agents paying them hefty commission ranging up to 30 per cent.
The depositors were told that they could select some land and got it registered
in their name at the time of maturity of the deposit.</div>
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Meanwhile, the collected deposits were invested in various
companies while some of the money was also used to buy land at various places
in Andhra Pradesh, Tamil Nadu and Karnataka at throwaway price. The value of
these lands is negligible but shown to the judicial court at inflated rates. </div>
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The Sahara India (Rs 30,000 crore), Peerless (Rs 30,000
crore), PACL (Rs 40,000 crore), Rose Valley (Rs 30,000 crore), Golden Forest
(Rs 2,000 crore) and scores of other companies collected deposits. </div>
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The AgriGold, also like all these companies, returned money
to the depositors as long as there was flow of new deposits. However, once the
deposits stopped coming in, they started defaulting like all other companies
earlier. </div>
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The Corporate Frauds Watch Society, a civil society
organisation, warned people way back in 2008 about the danger of losing money.
It had also filed a criminal case against AgriGold in 2010 as the mobilisation
of the deposits itself is illegal. The police in the undivided Andhra Pradesh
did not take any action to stop the company from taking deposits. By 2016, the
company started defaulting and the bubble has burst.</div>
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Since the depositors of Sahara India, PACL, Peerless, Rose
Valley and scores of other small players like Akshaya Gold, Abhaya Gold never
got back their deposits, everyone thought it would be the same case for the depositors
of Agrigold.</div>
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It is really heartening to note that the depositors of
AgriGold have been fighting nail and tooth to get back their deposits. They
moved the high court which agreed to see the properties of the company were
auctioned and the money is paid back to the depositors. But the cunning
management of AgriGold has been playing hide and seek to part with the
ill-gotten wealth to pay to the depositors. </div>
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The latest ploy that the Hailand property did not belong to
AgriGold has backfired resulting in the arrest of its managing director Alluri
Venkateswara Rao for conniving with the management in duping the depositors.</div>
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It has been reported that the AgriGold management has
collected more than Rs 6,000 crore and they have paid nearly 30 per cent to the
agents who mobilised the deposits. In effect, the company had paid Rs 1,800
crore to the agents as commission. Surprisingly, nobody is talking about the
commission paid to the agents and the agents are also crying foul stating that
they are also victims of the scam. In fact, the agents should refund the
commission as they are also part of the scam.</div>
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The leaders of the Left parties, on the other hand, are also
raising a strange argument. They are asking the government to pay the deposits
and realise the money by auctioning the properties of the AgriGold Company. It
is really an unreasonable demand. </div>
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How could the government spend the taxpayers’ money to pay
to the depositors? It surely would set a bad precedent. Everyone, who lost
rather foolishly or greedily in such scams, would start demanding payment by
the government. There are a number of small companies like Akshaya Gold, Abhaya
Gold which also defaulted after collecting Rs 100 crore or more. </div>
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The only way out is the perfect investigation into the
assets of the company and get the properties auctioned to pay to the
depositors. Still, it is not as easy as it is said. The cunning management
which stashed the cash away somewhere has been trying various ways to evade the
repayment.</div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com13tag:blogger.com,1999:blog-2020300354268548128.post-47534774500860667052017-10-31T22:33:00.001+05:302017-10-31T22:33:56.043+05:30This is how Herbalife cheating people in ponzi scheme<div dir="ltr" style="text-align: left;" trbidi="on">
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Many people rather wrongly believe that Herbalife is not a ponzi scheme. If they follow their method of business or business model then they could understand their ponzi scheme. This is what written by a Herbalife member.</div>
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Herbalife has 4 very attractive income streams.</div>
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The first being retail sales and is very quick to put in place? Basically when you join the company you are given a discount on the products and supply your family and friends the products at retail price.</div>
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Your discount range is between 25–35–42 and 50 percent, these discounts increase the more work you do.</div>
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The second part of the business is wholesale payment direct from Herbalife themselves, this is where you introduce someone to the company and teach them about the business, Herbalife will pay you for the work they do, the amount you are paid depends on your discount level and their discount level.</div>
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The third way is also another direct payment from Herbalife called royalties, to qualify for this payment you must help team members qualify for supervisor and you will receive a 5% payment for the work of them AND their team.</div>
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The fourth and final payment is called bonus, this is when you get into the higher levels of Herbalife you are paid an additional income from your supervisors ranging between 2% to 6%.</div>
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By this description of the business model one could understand the ponzi scheme of Herbalife. Mind everyone that Herbalife is also a member of Indian Direct Selling Association like Amway, Tupperware, Forever Living Products, Avon, and others. </div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com19tag:blogger.com,1999:blog-2020300354268548128.post-79187539002503968782017-09-12T22:48:00.005+05:302017-09-12T22:48:51.437+05:30How many times have you ever touch based for a multilevel marketing business? What is your feedback and understanding of the business?<div dir="ltr" style="text-align: left;" trbidi="on">
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SOME GENTLEMAN ASKED THIS QUESTION TO ME ON QUORA AND HERE IS MY ANSWER.</div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;"><br /></span></div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;">Way back in 1998. when Amway India started its operations in India, one of my friends invited my family to attend the introduction programme of Amway which is presenting a good business opportunity. My wife and I attended the meeting. After fifteen minutes into the meeting, my wife announced that it was time to leave. </span></div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;">I asked her reason.</span></div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;">She explain ed that the products available at that time with Amway are not useful for regular day-to-day usage. Secondly, she is a lecturer and she could not think of peddling these products to friends and relatives visiting their homes to sell them. Thirdly, being a lecturer how could she ask her friends and relatives to become members of a scheme, which is outright looks like a racket. She clearly stated that it was not our cup of tea.</span></div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;">Though I was a law graduate by that time, I was not aware that there was an enactment called Prize Chits and Money Circulation Schemes (Banning) Act, 1978 which prohibits the chain schemes and ponzi schemes. Later I realised it is a bigger racket than it looked and started filing criminal cases against such companies like speakasiaonline, NMart, GoldQuest, Gemini Techno and scores of other fraudulent companies. </span></div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;">At that time only I learnt that a criminal case was filed against Amway and the AP High Court delivered a judgement stating that Amway’s business model is illegal. The beauty of the judgment bowled me out. It clearly stated as to how the business model is illegal and how the Amway is making easy and quick money and how it is inducing the members to join its 6–4–3 scheme with the promise of get quick rich.</span></div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;">Later, it was found out that there are several such companies including Herbalife, Tupperware, Oriflame, Avon, New York Max Life Insurance, and others under the umbrella of Indian Direct Selling Association. All these companies are doing the same business model and our spineless politicians remain mute spectators to the daylight loot of the country by these companies. </span></div>
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<span style="font-family: q_serif, Georgia, Times, 'Times New Roman', serif; line-height: 1.6;">Finally, I wish to say one thing. One need not burn one’s fingers to learn that it is fire. Simple common sense is enough.</span></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com9tag:blogger.com,1999:blog-2020300354268548128.post-13482507485445565012017-07-28T17:58:00.005+05:302017-07-28T17:58:42.126+05:30ED attaches Rose Valley assets worth Rs 293 crore<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: #383636; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Kolkata: </span></b><span style="color: #383636; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">The Enforcement Directorate on Friday attached
assets worth Rs 293 crore in connection with the Rose Valley chit fund scam
case in which thousands of people were allegedly cheated in West Bengal and
Odisha, officials said.<br />
The central probe agency's regional office here issued a provisional attachment
order under sections of the Prevention of Money Laundering Act (PMLA) and with
this fresh action, the total attachment in this case stands at Rs 1,950 crore
(market value).<br />
"The latest attachment order is on assets worth Rs 293 crore (market
value)," senior officials in the agency said.<br />
The Enforcement Directorate (ED) had registered a criminal FIR against the
firm, its Chairman Gautam Kundu and others in 2014 under the PMLA. Kundu was
arrested by the agency from here in 2015 and he is currently in judicial
custody.<br />
Multiple charge sheets have been filed in the courts in Kolkata and Bhubaneswar
by the ED in this case.<br />
The group had allegedly floated a total of 27 companies for running the alleged
chit fund operations out of which only half-a-dozen were active.<br />
It is alleged that the firm had floated the scheme by promising inflated
returns on investments between 8 and 27 per cent to gullible investors in
various states.<br />
The company had allegedly promised astronomical returns to depositors on land
properties and assets and bookings done in the real estate sector. It is
alleged that the company had made "cross investments" in its various
sister firms to suppress its liabilities towards investors.<br />
The SEBI had probed the company before the ED and the CBI registered cases
against the group.<br />
The ED has pegged the total volume of the alleged irregularities at Rs 15,000
crore.<br />
An attachment order under PMLA laws is aimed to deprive the accused from
getting benefits of their ill-gotten wealth and it gets confirmed after an
order by the Adjudicating Authority of the said Act.</span><b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></b></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com14tag:blogger.com,1999:blog-2020300354268548128.post-39014370363032139542017-07-06T20:09:00.000+05:302017-07-06T20:09:36.384+05:30Millionaire 'Utility Warehouse' boss, Charles Wigoder, all but admits 'Multi Level Marketing' is a Big Lie<div dir="ltr" style="text-align: left;" trbidi="on">
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<i style="background-color: rgba(255, 255, 255, 0.921569); font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: 18px;"><span class="Apple-style-span" style="font-style: normal;"><span lang="EN-GB"><span class="Apple-style-span" style="font-family: arial, helvetica, sans-serif;"><span class="Apple-style-span" style="line-height: 21px;"><span class="Apple-style-span" style="font-family: arial; line-height: 18px;"><br /></span></span></span></span></span></i></div>
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<i style="background-color: rgba(255, 255, 255, 0.921569); line-height: 18px;"><span class="Apple-style-span" style="font-style: normal;"><span lang="EN-GB"><span class="Apple-style-span" style="font-family: arial, helvetica, sans-serif;"><span class="Apple-style-span" style="line-height: 21px;"><span class="Apple-style-span" style="font-family: arial; line-height: 18px;">More than half a century of quantifiable evidence, proves beyond all reasonable doubt that:</span></span></span></span></span></i></div>
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<li style="margin: 0px 0px 0.25em; padding: 0px; text-align: justify;"><i style="background-color: rgba(255, 255, 255, 0.921569); font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: 18px;"><span class="Apple-style-span" style="font-style: normal;"><span lang="EN-GB"><span class="Apple-style-span" style="font-family: arial, helvetica, sans-serif;"><span class="Apple-style-span" style="line-height: 21px;"><span class="Apple-style-span" style="font-family: arial; line-height: 18px;">what has become popularly-known as<span style="color: #cc0000;"> <i>'Multi-Level Marketing</i><i>'</i> </span>is nothing more than an absurd, cultic, economic pseudo-science.</span></span></span></span></span></i></li>
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<li style="margin: 0px 0px 0.25em; padding: 0px; text-align: justify;"><i style="background-color: rgba(255, 255, 255, 0.921569); font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: 18px;"><span class="Apple-style-span" style="font-style: normal;"><span lang="EN-GB"><span class="Apple-style-span" style="font-family: arial, helvetica, sans-serif;"><span class="Apple-style-span" style="line-height: 21px;"><span class="Apple-style-span" style="font-family: arial; line-height: 18px;">the impressive-sounding made-up term <span style="color: #cc0000;"><i>'MLM,'</i> </span>is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim rigged-market swindles or pyramid scams (dressed up as<span style="color: #cc0000;"> <i>'legitimate direct selling income opportunites'</i>)</span><span class="Apple-style-span" style="color: #660000;">,</span> and related advance-fee frauds (dressed up as <i style="color: #cc0000;">'legitimate training and motivation, self-betterment, programs, recruitment leads, lead generation systems,'</i> etc.).</span></span></span></span></span></i></li>
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<span style="color: #222222; font-family: arial;">(Blog readers should be aware that I have tried, without success, to interview Joanna Lumley and get her side of the serious matters which I set out in the article below. I personally suspect that she has been ensnared by the offer of a large donation to one, or more, of her numerous favourite charities. That said, in the <i><span style="color: #cc0000;">'Utility Warehouse' </span></i>video linked below, Joanna Lumley very specifically introduces herself by name and speaks as though she is personally guaranteeing the authenticity of the company and its so-called <i><span style="color: #cc0000;">'life-transforming MLM Income Opportunity'</span></i>).</span><br /><br /><span style="color: #222222; font-family: arial;"><br /></span><span style="color: #222222; font-family: arial;"><a href="http://www.utilitywarehouse.co.uk/partner-help/partner/answer/promo-videos" style="color: #888888; text-decoration: none;">www.utilitywarehouse.co.uk/partner-help/partner/answer/promo-videos</a></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Part-transcript of a<i><span style="color: #cc0000;"> 'Utility Warehouse' </span></i>recruitment video, 2017</span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">"Becoming a Utility Warehouse partner is easy and risk free</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">Even the joining fee is fully refundable</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">If you have second thoughts after your training you'll get it back no questions asked.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">You can work on your business part time, full time or from time to time.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">It's like a mini franchise, but without any financial risk or stock to buy.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">Spend a few hours per week building your business and you will quickly find yourself earning an extra few hundred pounds each month.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">Keep going, work a little harder and you could earn thousands of pounds extra each month</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">You don't need to be a salesman, a utility expert or a workaholic, just organised and committed and passionate about helping others to save money and building a better future for yourself</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">And you won't be thrown in at the deep end - you'll get help every step of the way with free training an experienced mentor and local support groups who will share their knowledge and experience with you.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">Every time you introduce a new member to Utility Warehouse, you'll get paid.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">The more new members you introduce: the more you'll earn, it's that simple.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">And what's more you will continue to get paid a % of their Utility bill for as long as they stay a member.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">That means every time they boil a kettle, switch on the heating, make a phone call, you'll get paid.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">But it doesn't stop there.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">If the members you introduce become a partner like you and sign up the people they know you'll get paid again - a small part of their utility spend every month.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">That could mean a regular extra income for life.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">And there's another reward that I really love - seeing more and more people share in the success of Utility Warehouse, not just cutting their household bills, but as a partner fulfilling their ambitions and dreams.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">There's no limit to how far or how fast your business can grow.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">Start small with the people you know and grow big with the people you don't.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">Tens of thousands of people have already become Utility Warehouse partners and are reaping the rewards financially socially and through gaining new skills and confidence.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">It's a purple army that is leading a revolution in the way that people buy their utility services.</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">Why don't you join them?</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">It could earn you financial freedom for life."</span></i></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Joanna Lumley </span></div>
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<span style="background-color: transparent; color: #222222; font-family: arial;">A few weeks ago, via some concerned third parties, I was put in contact with a young woman in the UK who wishes to remain anonymous. She told me</span><span style="background-color: transparent; font-family: arial;"> that she had recently become involved in an upsetting incident with a middle-aged guy </span><span style="background-color: transparent; font-family: arial;">who was excitedly boasting (at a private social event) that </span><i style="background-color: transparent; color: #cc0000; font-family: arial;">he was 'making good money as a</i><i style="background-color: transparent; color: #cc0000; font-family: arial;">Utility Warehouse Distributor.' </i><span style="background-color: transparent; font-family: arial;">He</span><i style="background-color: transparent; color: #cc0000; font-family: arial;"> </i><span style="background-color: transparent; font-family: arial;">was shamelessly prospecting </span><span style="background-color: transparent; font-family: arial;">other guests and even the catering staff at the event venue. M</span><span style="background-color: transparent; font-family: arial;">y contact intervened by discreetly suggesting to a prospect whom she knew and who seemed interested in joining, that this approach sounded like a pitch for a pyramid scheme. Unfortunately, she was then pointed out to the<i style="color: #cc0000;"> </i>recruiter (by the prospect) who immediately approached her and took her aside. In an arrogant fatherly tone, the recruiter advised her to <i><span style="color: #cc0000;">keep her nose out of something that she didn't understand, </span></i>insisting that </span><i style="background-color: transparent; font-family: arial;"><span style="color: #cc0000;">the 'Utility Warehouse MLM Business Model' is 'endorsed by Joanna Lumley and other celebrities' - including 'Richard Branson and Warren Buffett.'</span></i></div>
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<span style="font-family: arial;">Before she could get away from him, the</span><span style="color: #cc0000; font-family: arial; font-style: italic;"> 'Distributor' </span><span style="font-family: arial;">told my contact </span><span style="font-family: arial;">that</span><span style="font-family: arial;"> </span><span style="color: #cc0000; font-family: arial; font-style: italic;">last year 'Utility Warehouse'</span><i style="color: #cc0000; font-family: arial;"> had paid out more than £20 millions in commission to its 'Partners' </i><span style="font-family: arial;">and that</span><i style="color: #cc0000; font-family: arial;"> he was only 'inviting other people to share in the company's success.' </i><span style="font-family: arial;">At this point, my contact felt so uncomfortable, that she made her excuses to her hosts, and left. When she got home, she began to look on the Net and found the ongoing discussion of the <i><span style="color: #cc0000;">'MLM'</span></i> phenomenon on the Mumsnet forum where recruiters are affectionately referred to as 'Bots' (as in robots).</span></div>
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<span style="font-family: arial;">In the past, <i><span style="color: #cc0000;">'Utility Warehouse' </span></i>has wheeled-out various top British celebrities as useful idiots in propaganda videos. Furthermore, after I posted a brief article last year warning about <i><span style="color: #cc0000;">'Utility Warehouse,'</span></i> a reader contacted me privately who felt terribly let down by the fact that the BBC's Terry Wogan (who passed away in January 2016) and her favourite comedy stars, Dawn French & Jennifer Saunders, had all been involved.</span></div>
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<span style="font-family: arial;">Thus, just a few days ago, I telephoned Joanna Lumley's agents, Conway Van Gelder, who gave me the contact details of the star's personal assistant, Lisa Baker. I then sent my urgent concerns about Joanna Lumley's involvement with <i><span style="color: #cc0000;">'Utility Warehouse'</span></i> in a private e-mail via Lisa Baker who sent me a disturbing reply.</span></div>
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<span style="border: 0px; color: #1f497d; font-family: calibri, sans-serif; margin: 0px; padding: 0px;">Dear Mr Brear,</span></div>
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<span style="border: 0px; color: #1f497d; font-family: calibri, sans-serif; margin: 0px; padding: 0px;">Thank you very much for your email last week regarding Joanna Lumley and the Utility Warehouse Ltd. We have referred your enquiry to Tom Walker at the Utility Warehouse.</span></div>
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<span style="border: 0px; color: #1f497d; font-family: calibri, sans-serif; margin: 0px; padding: 0px;">With all good wishes,</span></div>
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<span style="border: 0px; color: #1f497d; font-family: calibri, sans-serif; margin: 0px; padding: 0px;">Lisa Baker</span></div>
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<span style="font-family: arial, helvetica, sans-serif;">A quick Google search revealed that Tom Walker is a RADA-trained former member of the Royal Shakespeare Company, who apparently is now reduced to making promotional videos for <i style="color: #cc0000;">'Utility Warehouse.' </i></span></div>
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<tr><td><a href="https://www.kent.ac.uk/congregations/images/hon-grads-archive/Charles%20Wigoder.jpg" imageanchor="1" style="color: #888888; margin-left: auto; margin-right: auto; text-decoration: none;"><img alt="Image result for charles wigoder" border="0" height="640" src="https://www.kent.ac.uk/congregations/images/hon-grads-archive/Charles%20Wigoder.jpg" style="background: transparent; border: none; box-shadow: rgba(0, 0, 0, 0.0980392) 0px 0px 0px; padding: 0px; position: relative;" width="438" /></a></td></tr>
<tr><td class="tr-caption" style="font-size: 10.56px;"><span style="font-family: arial, helvetica, sans-serif; font-size: x-small;">The Honourable Charles Wigoder (b. 1960)</span></td></tr>
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<span style="font-family: arial, helvetica, sans-serif;">Mr Walker, did not contact me, but after I sent a follow up e-mail to Lisa Baker, just a few hours later, I received an unsolicited e-mail from none other than the Honourable Charles Wigoder - the son of a life Peer (hence the 'Honourable' title) and boss of<i style="color: #cc0000;"> 'Utility Warehouse.' </i>In fact, Charles Wigoder owns 20% of <i><span style="color: #cc0000;">'</span></i><i><span style="color: #cc0000;">Telecom Plus/Utility Warehouse PLC' - </span></i>making his personal stake in the company currently worth around £200 millions.</span></div>
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<span style="font-family: arial, helvetica, sans-serif;"><a href="https://en.wikipedia.org/wiki/Charles_Wigoder" style="color: #888888; text-decoration: none;">https://en.wikipedia.org/wiki/Charles_Wigoder</a></span></div>
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<span style="font-family: arial, helvetica, sans-serif;"><a href="http://www.managementtoday.co.uk/britains-top-100-entrepreneurs-2014-no-44-charles-wigoder-telecom-plus/article/1318867" style="color: #888888; text-decoration: none;">http://www.managementtoday.co.uk/britains-top-100-entrepreneurs-2014-no-44-charles-wigoder-telecom-plus/article/1318867</a></span></div>
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<span style="font-family: arial, helvetica, sans-serif;">_________________________________________________________________________</span></div>
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Dear David,</div>
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<span style="border: 0px; font-weight: bolder; margin: 0px; padding: 0px;">Joanna Lumley</span></div>
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I understand that you have been attempting to contact Joanna Lumley in order to discuss your longstanding concerns about the harm and damage which most MLM companies cause to those who participate.</div>
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The honest truth is that I had exactly the same concerns when someone first suggested I looked at Telecom Plus a little over 20 years ago. As one of the UK’s leading entrepreneurs, with a hard earned reputation for integrity in all my business dealings, being tainted with the so called ‘pyramid selling’ brush was the last thing I needed….but I was persuaded to do so and am deeply glad that I did.</div>
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And whilst you may be right about MLM businesses in general, you are wrong about us.</div>
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By way of example:</div>
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<span style="border: 0px; margin: 0px; padding: 0px;">(i)<span style="border: 0px; font-family: 'times new roman'; font-stretch: normal; line-height: normal; margin: 0px; padding: 0px;"> </span></span>Of course not everyone who signs up as one of our Partners goes on to build a significant residual income – but with us, anyone who tries the business and decides (for whatever reason) that it isn’t right for them, can receive a full refund of the joining fees they have paid; the churn/loss ratio looks very different when virtually none of the new Partners who join actually make a loss!</div>
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<span style="border: 0px; margin: 0px; padding: 0px;">(ii)<span style="border: 0px; font-family: 'times new roman'; font-stretch: normal; line-height: normal; margin: 0px; padding: 0px;"> </span></span>Most MLM business require a constant stream of new recruits in order to create income for those higher up the chain; with us, the incomes of all our Partners can continue growing without a single new Partner being recruited, as more people become Members, and as existing Members take more services from us.</div>
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If you are genuinely interested in learning more about our business model, and why we have become a powerful force for good in the UK, I would be very happy to meet. I am on annual leave for much of July, but we could perhaps get something in the diary for the second half of August.</div>
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I have cc’d my PA (Lucy) who can make the arrangements.</div>
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With kind regards</div>
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<span style="border: 0px; font-weight: bolder; margin: 0px; padding: 0px;">Charles Wigoder</span></div>
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Executive Chairman</div>
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Firstly, it is interesting to note that Charles Wigoder is a champion Contract Bridge player.<br /><br /><img alt="Image result for bridge cards" height="425" src="https://blogger.googleusercontent.com/img/proxy/AVvXsEjwOGjnur1-2cfCGp0EnCDW8pYvu0lATrmZlo4XvZYiJH2LA1Zf5znyI18tyJdYs4kI1gLIh1tQNUp5YXPS0hljGCRAyoHrdEsyCkxqbpbU0gpEPaU2HepqGdbV2ZzU3uPUoy0sADurxFvJXJ4BlKLuM3lzsTzfaxGsL6MUJbrNiJEY0Qb4y5zb40wQTz39GpZw_OBrbGsRGZkWi3DbPQVxZ3dse3MRC2u0_wgtkyuGxaQoIEEarSZUvWao9TXTvnJCdb_if39YZUrS2TEudac_ro4tWvwGAtkSp7k7WMOIaelIVQ=s0-d" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(119, 119, 119); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px;" width="640" /></div>
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<span style="font-family: arial, sans-serif;">(Briefly, for the benefit of Blog readers who might not be familiar with the game of Bridge,</span><span style="color: #444444; font-family: arial, sans-serif;"> <span style="color: black; font-family: arial, helvetica, sans-serif;">it's a sophisticated version of Whist complete with its own terminology and etiquette: </span></span><a href="https://en.wikipedia.org/wiki/Glossary_of_contract_bridge_terms" style="color: #888888; font-family: arial, helvetica, sans-serif; text-decoration: none;">https://en.wikipedia.org/wiki/Glossary_of_contract_bridge_terms</a> . <span style="color: #444444; font-family: arial, sans-serif;"><span style="color: black; font-family: arial, helvetica, sans-serif;">Bridge involves dealing the entire pack of playing cards to two pairs of partners who then make bids in turn as to how many tricks each thinks his/her pair will win against the other pair based on the strength of the hidden hand each holds. Each playing partner attempts to communicate to the other the strength of his/her hidden hand via the strength of his/her bids. Bridge is one of the few card games which actually involves a very subtle form of cheating: tone of voice, facial expression, gestures, etc. Officially, in Bridge tournaments, secret signs between partners are frowned on, but they are inevitable. </span></span><span style="font-family: arial, helvetica, sans-serif;">The highest bidder wins the contract also establishing which suit will be trumps or if there will be no trumps. The contract winner then plays both his/her own hand and that of his/her partner - the 'dummy' - whose cards are laid on the table. There is a large amount of skill involved in leading your cards, and those of your dummy, in the right order. The highest points are scored when you win the number of tricks you contracted you would, but you can lose if you fail to achieve the contract).</span></div>
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<span style="border: 0px; font-family: arial, helvetica, sans-serif; margin: 0px; padding: 0px;">Thus, Wigoder's opening bid in which he pretends <span style="color: #cc0000; font-style: italic;">to be my partner </span>(by apparently admitting to suspecting that most <i><span style="color: #cc0000;">'MLM'</span></i> companies<i><span style="color: #cc0000;">, apart from his own,</span></i> have been the fronts for pyramid schemes) is obviously not that of someone who is entirely convinced that he's holding a strong hand, but strangely he's confident that I'm going to accept his disguised invitation to play the role of dummy.</span></div>
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<span style="border: 0px; font-family: arial, helvetica, sans-serif; margin: 0px; padding: 0px;">Instead of entering the <i><span style="color: #cc0000;">'Utility Warehouse' </span></i>rabbit hole: in the rest of this article I'm going to stay well above ground and calmly lay on the table exactly what it is that the Honourable Charles Wigoder and his associates don't want Joanna Lumley, or the public, or regulators, or law enforcement agents, or legislators, or journalists, or satirists, to uncover.</span></div>
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For a long time I've proposed the formula that the universal identifying characteristic of pyramids and Ponzis is that they have no sustainable, or significant, source of revenue other than their own participants who are tricked into handing over their money (and sometimes their time and effort) in the false-expectation of future reward. Pyramids and Ponzis can, therefore, be more-accurately described as dissimulated closed-market swindles. That said, by their very nature, all pyramid and Ponzi schemes have been presented<i><span style="color: #cc0000;"> as perfectly lawful ,and viable, enterprises with </span></i><i style="color: #cc0000;">an external source of revenue. </i>Over the years, the methods of dissimulating pyramids and Ponzis and making them appear<i style="color: #cc0000;"> to have legitimate external sources of revenue </i>have become ever more mystifying and sophisticated, but their hidden quantifiable results have remained exactly the same. i.e. The schemes' instigators make a fortune, and virtually everyone else loses. Recently, I've come to the conclusion that it is probably even more-accurate to describe Pyramids and Ponzis as dissimulated rigged-market swindles.<br /><br /><br /><div class="separator" style="clear: both; text-align: center;">
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="color: #222222;">In blame the victim </span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Multi Level Marketing/Prosperity Gospel '</span></em><span style="color: #222222;"> cultic rackets, the innocent looking products/services' function is to hide what is really occurring - i.e. The operation of an unlawful rigged market where effectively no ill-informed (transient) participant can generate an overall net-profit, because the market is in a permanent state of collapse and requires its (transient) participants to keep finding further (transient) participants, ad infinitum. </span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; color: #222222; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><br /></span></div>
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<span style="background-color: #f9f9f9; border: 0px; color: #222222; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;">Meanwhile a tiny well-informed (permanent) minority rake in vast profits by selling into the rigged-market at fixed-prices (and sometimes by also charging sign-up fees) and by controlling all key-information concerning the rigged-market's actual catastrophic, ever-shifting results in respect of its participants.</span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222;">Although </span><i><span style="color: #cc0000;">miraculous cure-all </span></i><span style="color: #222222;">quasi-medical pills and potions, and household, and beauty, products have been prevalent, it is possible to use any product or service to dissimulate a rigged-market swindle a.k.a. pyramid scheme. There are even some </span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'MLM/Prosperity Gospel'</span></em><span style="color: #222222;"> rackets which have hidden behind well-known traditional brands (albeit offered at controlled high prices) others have hidden behind travel products, as well as financial, and insurance, products, cash back cards, etc. I believe there is now an </span><span style="color: #cc0000;">'<em style="border: 0px; margin: 0px; padding: 0px;">MLM'</em> </span><span style="color: #222222;">racket based on cannabis products in the USA</span></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; color: #222222; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="font-style: normal;">Behind all the</span><em style="border: 0px; margin: 0px; padding: 0px;"> </em><span style="font-style: normal;">products/services,</span><em style="border: 0px; margin: 0px; padding: 0px;"> </em><span style="font-style: normal;">bedazzling celebrity endorsements,</span><em style="border: 0px; color: black; margin: 0px; padding: 0px;"><span style="color: #222222;"> </span><span style="color: #cc0000;">commercial</span></em><span style="color: #cc0000; font-style: normal;"> </span><span style="font-style: normal;">camouflage, mystifying mathematics and </span><span style="color: #cc0000; font-style: normal;"><em style="border: 0px; margin: 0px; padding: 0px;">Utopian</em> </span><span style="font-style: normal;">imagery, in </span><span style="color: #cc0000; font-style: normal;"><em style="border: 0px; margin: 0px; padding: 0px;">'MLM/Prosperity Gospel</em>'</span><span style="font-style: normal;"> rackets there has been no significant or sustainable source of revenue other than never-ending chains of temporarily bedazzled contractees of the</span><span style="color: #cc0000; font-style: normal;"> <em style="border: 0px; margin: 0px; padding: 0px;">'MLM</em>' </span><span style="font-style: normal;">front companies. These front-companies always pretend that </span><span style="color: #cc0000; font-style: normal;"><em style="border: 0px; margin: 0px; padding: 0px;">their products services are high quality and reasonably-priced and that they can be sold for a profit based on value and demand.</em> </span><span style="font-style: normal;">In reality, the underlying reason why it has mainly only been </span><span style="color: #cc0000; font-style: normal;"><em style="border: 0px; margin: 0px; padding: 0px;">'MLM'</em> </span><span style="font-style: normal;">contractees who buy the products /services (and not the general public) is because they have been led to believe that</span><em style="border: 0px; margin: 0px; padding: 0px;"> </em><em style="border: 0px; color: black; margin: 0px; padding: 0px;"><span style="color: #cc0000;">by doing so, and by recruiting others to do the same etc. ad infinitum, they will receive a future (unlimited) reward.</span></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;"><br /></span></em></span></span><span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222;">Put in very simple terms,</span><span style="color: #222222;"> </span><span style="color: #cc0000; font-style: italic;">'MLM'</span><span style="color: #cc0000;"> </span><span style="color: #222222;">has been form of mind-numbingly complex economic </span><i style="color: #cc0000;">'alchemy' </i>behind <span style="color: #222222;">which bedazzled and befuddled victims have been peddled </span><span style="color: #cc0000;"><i>infinite shares</i></span><span style="color: #222222;"> of their own finite money.</span></span></span></span></div>
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<br /><span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;">I've been examining the</span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;"> 'MLM'</span></em><span style="font-style: normal;"><span style="color: #cc0000;"> </span><span style="color: #222222;">phenomenon for around 20 years. During this time, I've yet to find one so-called </span></span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'MLM'</em><span style="font-style: normal;"> </span></span><span style="color: #222222; font-style: normal;">company which has voluntarily made key information available in an easily understood form to the public concerning the quantifiable results of its so-called </span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'income opportunity'.</span></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;">T</span><span style="color: #222222; font-style: normal;">he key-information which all </span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'MLM'</span></em><span style="font-style: normal;"><span style="color: #cc0000;"> </span><span style="color: #222222;">bosses seek to hide concerns the overall number of persons who have signed contracts since the front companies were instigated and the retention/net-profitability rates of these contractees. </span></span></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; color: #222222; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="font-style: normal;"><br /></span></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;">When rigorously investigated, the overall hidden net-loss churn rates for</span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222;"> </span><span style="color: #cc0000;">'MLM</span></em><span style="font-style: normal;"><span style="color: #cc0000;">'</span><span style="color: #222222;"> income opportunities has turned out to have been effectively 100%. Thus, anyone claiming (or implying) that </span></span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">it is possible for the average participant to make a living in an 'MLM,' </span></em><span style="color: #222222; font-style: normal;">cannot be telling the truth and will not provide quantifiable evidence to back up his/her anecdotal claims.</span></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;">Some of the biggest</span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;"> 'MLM/Prosperity Gospel'</span></em><span style="font-style: normal;"><span style="color: #cc0000;"> </span><span style="color: #222222;">rackets (like </span></span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'Amway'</em><span style="font-style: normal;"> </span></span><span style="color: #222222; font-style: normal;">and</span><span style="color: #cc0000;"><span style="font-style: normal;"> </span><em style="border: 0px; margin: 0px; padding: 0px;">'Herbalife'</em></span><span style="color: #222222; font-style: normal;">) have secretly churned tens of millions of losing participants over decades and they've also been widely-described as 'commerical or business cults.' </span></em></em></span></span><em style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;">Interestingly,</span><em style="border: 0px; color: #222222; margin: 0px; padding: 0px;"> </em><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Amway' </span></em><span style="color: #222222; font-style: normal;">offers</span><em style="border: 0px; color: #222222; margin: 0px; padding: 0px;"> </em><span style="color: #222222; font-style: normal;">insurance and also once hid behind utilities supplied by</span><span style="color: #222222;"> </span><span style="color: #cc0000;">'Enron.'</span></em></em></div>
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<span style="border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="font-style: normal;"><span style="background-color: #f9f9f9; border: 0px; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="font-style: normal;">There is already a large body of documentary evidence proving that</span><span style="color: #cc0000; font-style: normal;"> </span><span style="color: #cc0000; font-style: normal;">'Utility Warehouse'</span><span style="color: #222222; font-style: normal;"> </span><span style="font-style: normal;">adherents have been, and are being, exposed (without their fully-informed consent) to co-ordinated devious techniques of social, psychological and physical persuasion, designed to shut down their critical, and evaluative, faculties - dissociating them from external reality in order to exploit them and prevent them from complaining. Lying at the dark heart of</span><span style="color: #222222; font-style: normal;"> the <span style="color: #cc0000;">'Utility Warehouse'</span></span><span style="font-style: normal;"> </span><span style="font-style: normal;">cult has been the classic guilt-producing closed-logic controlling narrative. This constantly tells </span><span style="color: #cc0000; font-style: normal;">'MLM'</span><span style="color: #cc0000; font-style: normal;"> </span><span style="font-style: normal;">converts that </span><span style="color: #cc0000; font-style: normal;">only those who exclude all negativity and continue to believe totally that they will achieve the future redemption of financial freedom,</span><span style="color: #cc0000; font-style: normal;"> can achieve financial freedom.</span><span style="color: #222222; font-style: normal;"> Thus, <span style="color: #cc0000;">all those who lose money and quit must not have believed totally and only have themselves to blame.</span><span style="color: #cc0000;"> </span></span></em></em></span></span><span style="background-color: #f9f9f9; border: 0px; color: #444444; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;">Tellingly, the bosses of</span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222;"> </span><span style="color: #cc0000;">'Utility Warehouse'</span></em><span style="font-style: normal;"><span style="color: #cc0000;"> </span><span style="color: #222222;">have never disclosed the actual results of their so-called </span></span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'MLM Income Opportunity,'</em><span style="font-style: normal;"> </span></span><span style="color: #222222; font-style: normal;">because if they did, no one in their right mind would want to sign up. Instead they have focused attention on a minority of apparently </span><span style="color: #cc0000;">successful and satisfied</span><span style="color: #222222; font-style: normal;"> shills, whilst</span></em></em></span></span><span style="background-color: #f9f9f9; border: 0px; color: #444444; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;"> </span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Utility Warehouse'</span></em><span style="font-style: normal;"><span style="color: #cc0000;"> </span><span style="color: #222222;">(just like</span></span><em style="border: 0px; color: #222222; margin: 0px; padding: 0px;"> </em><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'Amway'</em><span style="font-style: normal;"> </span></span><span style="color: #222222; font-style: normal;">and </span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Herbalife'</span></em><span style="color: #222222; font-style: normal;">) has been peddled as an </span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'</em><em style="border: 0px; margin: 0px; padding: 0px;">income opportunity,'</em><span style="font-style: normal;"> </span></span><span style="color: #222222; font-style: normal;">and not a net-income opportunity.</span></em></span></span></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222;">Further research has been published by my associate Robert FitzPatrick (President of Pyramid Scheme Alert). This clearly shows that </span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Utility Warehouse'</span></em><span style="color: #cc0000;"> </span><span style="color: #222222;">has been copied from various US-based pyramid schemes dissimulated as </span><span style="color: #cc0000;">'</span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">MLM/direct selling income opportunities' </span></em><span style="border: 0px; color: #222222; margin: 0px; padding: 0px;">hiding behind utilities.</span></span></span></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><br style="font-style: normal;" /><span style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #222222; font-style: normal;">e.g. </span><span style="color: #cc0000;">'Stream Energy'</span><span style="color: #222222; font-style: normal;"> which was sued in 2009 </span></span><br style="font-style: normal;" /><br style="font-style: normal;" /><span style="border: 0px; color: #222222; font-style: normal; margin: 0px; padding: 0px;"><a href="http://pyramidschemealert.org/PSAMain/news/StreamEnergySuedasPyramid.html" style="color: #888888; text-decoration: none;">http://pyramidschemealert.org/PSAMain/news/StreamEnergySuedasPyramid.html</a></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; color: #222222; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><br /></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #783f04;"><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;">The Texas-based MLM, Stream Energy, which sells gas and electric utility services in Texas and in Georgia, has been sued for operating a pyramid scheme. The civil suit, which is seeking class action status, claims that Stream misrepresents income potential, misleads consumers to invest as salespeople, is causing the great majority of "sales people" to lose money and is destined to collapse.</span><br style="font-style: normal;" /><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;"><br /></span></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;"><span style="color: #783f04;">The suit notes that the ratio of Stream customers to salespeople is now only two to one. Therefore, the income potential could only come from recruiting other sales people in an endless chain fashion. In such a plan, only a very small number can be successful and all others are doomed to failure. Stream's pay plan is a typical <em style="border: 0px; margin: 0px; padding: 0px;">MLM</em> that pays earlier investors with funds invested by new ones in an "endless chain" plan.</span></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #783f04;"><br style="font-style: normal;" /><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;">The lawsuit will be eerily familiar to consumers who have watched the <em style="border: 0px; margin: 0px; padding: 0px;">MLM</em> industry. Stream is a type of <em style="border: 0px; margin: 0px; padding: 0px;">MLM</em> similar to Pre-Paid Legal, the now defunct Excel Communications, the travel scheme, My TravelBiz.com that was prosecuted as a pyramid scheme in California, and the telephone scheme, ACN which has also been prosecuted in Canada and Australia, but was able to continue based on rulings by judges. These schemes offer payments based on the number of new sales people recruited and each salesperson must also have a small number of retail customers to be qualified for commissions.</span></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #783f04;"><br style="font-style: normal;" /><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;">By using the endless chain pay plan the scheme can drive a large number of sales, though almost no sales people actually earn a profit and virtually none actually earn a profit for "direct selling." Excel, for example, recruited 500,000 American salespeople in one year at one point and quickly became the 4th largest long distance phone service in America. Yet, 80% of its salespeople were quitting each year. It quickly spiked and declined rapidly, eventually going bankrupt, ruining all distributors and all shareholders. Pre-Paid Legal also enjoyed fast growth, but now is in steep decline, with recruiting slowing and the ratio of "retail" customers to salespeople narrowing. My Travel Biz became the 17th largest travel agency in America, though virtually none of its salespeople actually earned a profit from retail travel sales. The big earners were making money off all the other sales people's investments.</span></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #783f04;"><br style="font-style: normal;" /><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;">In these cases, the products are sold at competitive prices, but each salesperson must pay upfront and monthly fees in order to participate in the chain. The net result is to produce a large base of customers, but the incentives and promises made to the salespeople – which produce the sales – turn out to be false. The salespeople are churned in huge numbers as they discover that it is mathematically impossible for them to build their own large downlines.</span></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #783f04;"><br style="font-style: normal;" /><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;">Most other <em style="border: 0px; margin: 0px; padding: 0px;">MLMs</em> – which constitute a variation on the pyramid selling model – have virtually no retail customers at all and they usually hype grossly overpriced products. 40-60% of those high prices are then transferred to the top of the pyramid. In those cases, the <em style="border: 0px; margin: 0px; padding: 0px;">MLM</em> companies do not track retail sales at all, though they may officially claim that each salespeople is required to make retail sales.</span></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;"><span style="color: #783f04;"><br /></span></span></em></em></em></span></span></div>
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<span style="background-color: #f9f9f9; border: 0px; font-family: arial, tahoma, helvetica, freesans, sans-serif; line-height: normal; margin: 0px; padding: 0px; text-align: justify;"><span style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="border: 0px; font-style: normal; margin: 0px; padding: 0px;"><span style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #783f04;">The Stream Energy model builds in a requirement for a small number of retail sales, giving an appearance of greater validity. Some news analysts are blinded by the large number "sales" these schemes produce. They also do not understand the pyramid pay plan that tricks the participants into losing their investments and wasting their time and effort.</span></span><br /><br /><span style="border: 0px; color: #222222; margin: 0px; padding: 0px;"><a href="http://pyramidschemealert.org/PSAMain/news/StreamClassComplaint.pdf" style="color: #888888; text-decoration: none;">http://pyramidschemealert.org/PSAMain/news/StreamClassComplaint.pdf</a></span></span></em></em></em></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #444444;">'</span><span style="color: #cc0000;">Utility Warehouse'</span></em><span style="color: #cc0000;"> </span>has recently begun to offer insurance products ( but still acting as an agent for another company) and has publicly advertised this.</span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> <a href="http://www.utilitywarehouse.co.uk/help/insurance/answer/insurance" style="color: #888888; text-decoration: none;">www.utilitywarehouse.co.uk/help/insurance/answer/insurance</a></span><br /><br /><div class="separator" style="clear: both; text-align: center;">
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Classically of an<em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #444444;"> </span><span style="color: #cc0000;">'MLM'</span></em><span style="color: #cc0000;"> </span>racket, only persons under contract to<span style="color: #cc0000;"> '<em style="border: 0px; margin: 0px; padding: 0px;">Utility Warehouse'</em> </span>can make purchases via<i> </i>the company<span style="color: #444444;"> </span>whilst escalating commission rewards have been offered to all<em style="border: 0px; color: #444444; margin: 0px; padding: 0px;"> </em><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">Utility Warehouse</em> </span>contractees provided they sign up at least 6 new contractees (although previously it was 3 new contractees). Thus, in the end, the possibility of future<i><span style="color: #cc0000;"> 'commisssion'</span></i> rewards have been offered to all contractees on purchases which they make themselves and on the purchases of anyone they might recruit and on the purchases of anyone their recruits might recruit, etc., ad infinitum. Thus, basic common-sense reveals that no <i><span style="color: #cc0000;">'Utility Warehouse'</span></i> contractee should be trusted when it comes to any anecdotal statement which he/she makes about his/her activity; for in order to have chance of recruiting, no matter what their actual experience, they all likely to recommend the company and to claim <span style="color: #cc0000;"><i>to have saved, and/or made, money.</i><i> </i></span></span>However, many people who have abandoned the company, tell a very different story.</div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><br /></span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">The deeply-mystifying <i><span style="color: #cc0000;">'commission' </span></i>reward system has been presented in<em style="border: 0px; color: #444444; margin: 0px; padding: 0px;"> '</em><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">Utility Warehouse'</em> </span>promotional material as being <span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">without limit and a proven means of attaining 'financial freedom for life,'</em> </span>but remember, no accurate easy-to-understand data has been disclosed concerning the overall results of the so-called<em style="border: 0px; margin: 0px; padding: 0px;"> </em><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Utility Warehouse MLM income opportunity.'</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Bearing the above in mind, this is from the UK Fraud Act 2006 (section 3)</span></div>
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<span class="LegDS LegP1No" style="clear: both; display: block; float: left; letter-spacing: 0em; min-width: 6%;">3</span><span class="LegDS LegP1GroupTitleFirst" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 688.156px;">Fraud by failing to disclose information</span></h3>
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A person is in breach of this section if he—</div>
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<span class="LegDS LegLHS LegP3No" id="section-3-a" style="display: block; float: left; letter-spacing: 0em; text-align: right; width: 112.188px;">(a)</span><span class="LegDS LegRHS LegP3Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 620.828px;">dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and</span></div>
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<span class="LegDS LegLHS LegP3No" id="section-3-b" style="display: block; float: left; letter-spacing: 0em; text-align: right; width: 112.188px;">(b)</span><span class="LegDS LegRHS LegP3Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 620.828px;">intends, by failing to disclose the information—</span></div>
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<span class="LegDS LegLHS LegP4No" id="section-3-b-i" style="display: block; float: left; letter-spacing: 0em; text-align: right; width: 164.547px;">(i)</span><span class="LegDS LegRHS LegP4Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 568.469px;">to make a gain for himself or another, or</span></div>
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<span class="LegDS LegLHS LegP4No" id="section-3-b-ii" style="display: block; float: left; letter-spacing: 0em; text-align: right; width: 164.547px;">(ii)</span><span class="LegDS LegRHS LegP4Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 568.469px;">to cause loss to another or to expose another to a risk of loss.</span><span class="LegDS LegRHS LegP4Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 568.469px;"><br /></span><span class="LegDS LegRHS LegP4Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 568.469px;"><br /></span><span class="LegDS LegRHS LegP4Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 568.469px;"><br /></span><span class="LegDS LegRHS LegP4Text" style="display: block; float: right; letter-spacing: 0em; text-align: justify; width: 568.469px;"><br /></span></div>
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<em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Utility Warehouse' </span></em>currently claims 41 700<em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> '</em><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">P</span></i><span style="color: #cc0000;"><i>artners/Distributors,' </i></span></span><i><span style="color: #cc0000;">selling Utilities, insurance, etc.<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">, to 600 000 'members/customers,' </span></span></i><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">but it can't be repeated enough that even</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> <span style="color: #cc0000;">'</span></span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">members'</span></i><i style="color: #cc0000;"> </i>(who are in the anti-chamber to the real fraud) </span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">are also offered rewards on the purchases they make themselves as well as the possibility of<span style="color: #cc0000;">'<i>commissions' </i></span>for signing up a minimum number of <i><span style="color: #cc0000;">new</span></i></span><i><span style="color: #cc0000;"><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> '</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">members'</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> </span></span></i><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">and the possibility of '<i><span style="color: #cc0000;">commissions</span><span style="color: #e06666;">' </span></i>on the purchases of their future recruits, etc. ad infinitum. Thus, if we divide the current number of <i><span style="color: #cc0000;">'Members' </span></i>by the current number of <i><span style="color: #cc0000;">'Partners/Distributors,' </span></i>on average each one has only a paltry 13<i><span style="color: #cc0000;"> 'customers.' </span></i></span><br /><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;"><br /></span></i></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;"><br /></span></i></span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><i><span style="color: #cc0000;">'Utility Warehouse' </span></i>is currently offering <i><span style="color: #cc0000;">to pay an up-front head hunter bounty of £200 for each new recruit an existing recruit signs up. </span></i>This dodge again has been copied from US-based <i><span style="color: #cc0000;">'MLM' </span></i>rackets. What the promotional material doesn't make clear is that these head hunter payments are a <i><span style="color: #cc0000;">'commision' </span></i>advance on what the new<i><span style="color: #cc0000;">'customer' </span></i>recruit should (in theory) ultimately hand over to the company. Thus, if the new recruit drops out and doesn't continue obediently to buy via <i><span style="color: #cc0000;">'Utility Warehouse,'</span></i> the recruiter has to give his £200 bounty back to the company. </span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="font-family: arial, sans-serif;"><a href="http://www.uswitch.com/gas-electricity/news/2014/09/23/ofgem-launches-investigation-into-energy-companies-debt-chasing-tactics/" style="color: #888888; text-decoration: none;">www.uswitch.com/gas-electricity/news/2014/09/23/ofgem-launches-investigation-into-energy-companies-debt-chasing-tactics/</a></span></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Tellingly, part of <i><span style="color: #cc0000;">'Telecom Plus/ Utility Warehouse'</span></i> is a subsidiary debt-collection company which has already fallen foul of UK energy regulators due to its misleading appearance and bully-boy tactics.</span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">In order to become a</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> <span style="color: #cc0000;"><i>'P</i></span></span><span style="color: #cc0000;"><i><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">artner,'</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> </span></i></span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">a<span style="color: #cc0000;"> '<i>M</i><em style="border: 0px; margin: 0px; padding: 0px;">ember'</em></span> also has to pay a sign-up fee. For years this was around £200, but since I posted my article highlighting this last year, the sign-up fee for <i><span style="color: #cc0000;">'Members'</span></i> was suddenly reduced to around £100, but apparently for non-<i><span style="color: #cc0000;">'members'</span></i> it remained at just under £200. The company has offered to<i><span style="color: #cc0000;"> refund the sign up fee if a 'Partner/Distributor' signs-up 12 new recruits.</span></i> Significant sign-up fees to participate in trading schemes are prohibited by law in the UK. In reality, many</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> </span><em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Utility Warehouse members</span></em><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> have been </span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">merely participants who haven't been able to recruit 6 more<i style="color: #cc0000;"> members </i>(let alone 12), but many have been obediently buying via</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> <i><span style="color: #cc0000;">'</span></i></span><span style="border: 0px; color: #cc0000; font-style: italic; line-height: normal; margin: 0px; padding: 0px;">Utility Warehouse'</span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><i style="color: #cc0000;"> </i>and trying to recruit others, </span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">based on their false-expectation of future reward . Whilst, the overall churn rate of</span><em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> <span style="color: #cc0000;">Utility Warehouse</span></em><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"> </span><span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">contractees (based on the accumulated number of persons who have signed contracts with the company since it was first instigated and the number of persons under contract currently) has not been disclosed in an easy to understand form.</span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">In reality, the number of recruits required to be found and maintained for any of the existing 41 700 <i><span style="color: #cc0000;">'Utility Warehouse'</span></i> so-called <i><span style="color: #cc0000;">'Partner/Distributor's</span></i> to earn a minimum-wage net-income (let alone <span style="color: #cc0000; font-style: italic;">financial freedom</span>) is considerable. However, the number of recruits required to be found and maintained for all existing so-called<i><span style="color: #cc0000;">'Partner/Distributors'</span></i> to earn a minimum wage net-income, is astronomic.</span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="font-family: arial, helvetica, sans-serif;">Again in the most simple terms,<i><span style="color: #cc0000;"> '</span></i></span><em style="border: 0px; font-family: arial, helvetica, sans-serif; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Utility Warehouse'</span></em><span style="font-family: arial, helvetica, sans-serif;"><i><span style="color: #cc0000;"> </span></i>has been peddling an unoriginal, pernicious </span><em style="border: 0px; font-family: arial, helvetica, sans-serif; margin: 0px; padding: 0px;"><span style="color: #cc0000;">financial</span></em><span style="font-family: arial, helvetica, sans-serif;"><span style="color: #cc0000;"> </span>fairy story - ie. </span><em style="border: 0px; font-family: arial, helvetica, sans-serif; margin: 0px; padding: 0px;"><span style="color: #cc0000;">endless recruitment + endless payments by the recruits = endless profits for the recruits.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Bearing the above in mind, one more time here below is the link to, and part-transcript of, a current<em style="border: 0px; margin: 0px; padding: 0px;"> <span style="color: #cc0000;">'Utility Warehouse'</span></em><span style="color: #cc0000;"> </span>promotional video featuring Joanna Lumley which, once you know the truth, is revealed as a classic tragicomic <em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Prosperity Gospel'</span></em><span style="color: #cc0000;"> </span>preachment - offering vulnerable prospective converts <span style="border: 0px; margin: 0px; padding: 0px;"><i style="color: #cc0000;">an exclusive ticket to a </i>(non-existent)<i style="color: #cc0000;"> future secure Utopian existence</i></span> (in exchange for their critical and evaluative faculties). Ironically, this illusary filmed ritual-performance has been bought and paid for with past and present <i><span style="color: #cc0000;">'Utility Warehouse'</span></i>worshippers' own cash:</span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><a href="https://www.youtube.com/watch?v=q6D9m9ldJdo&t=99s" style="color: #888888; text-decoration: none;">https://www.youtube.com/watch?v=q6D9m9ldJdo&t=99s</a></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">"Becoming a Utility Warehouse partner is easy and risk free</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Even the joining fee is full refundable</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">If you have second thoughts after your training you'll get it back no questions asked.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">You can work on your business part time, full time or from time to time.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">It's like a mini franchise, but without any financial risk or stock to buy.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Spend a few hours per week building your business and you will quickly find yourself earning an extra few hundred pounds each month.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Keep going, work a little harder and you could earn thousands of pounds extra each month</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">You don't need to be a salesman, a utility expert or a workaholic, just organised and committed and passionate about helping others to save money and building a better future for yourself</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">And you won't be thrown in at the deep end - you'll get help every step of the way with free training an experienced mentor and local support groups who will share their knowledge and experience with you</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Every time you introduce a new member to Utility Warehouse, you'll get paid</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">The more new members you introduce: the more you'll earn, it's that simple</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">And what's more you will continue to get paid a % of their Utility bill for as long as they stay a member</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">That means every time they boil a kettle, switch on the heating, make a phone call, you'll get paid.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">But it doesn't stop there</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">If the members you introduce become a partner like you and sign up the people they know you'll get paid again - a small part of their utility spend every month</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">That could mean a regular extra income for life</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">And there's another reward that I really love - seeing more and more people share in the success of Utility Warehouse, not just cutting their household bills, but as a partner fulfilling their ambitions and dreams.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">There's no limit to how far or how fast your business can grow.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Start small with the people you know and grow big with the people you don't.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Tens of thousands of people have already become Utility Warehouse partners and are reaping the rewards financially socially and through gaining new skills and confidence.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">It's a purple army that is leading a revolution in the way that people buy their utility services.</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">Why don't you join them?</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">It could earn you financial freedom for life."</span></em></span></div>
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<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Meanwhile back in the adult world of quantifiable reality, and for those persons with fully-functioning critical and evaluative faculties, this is from the <span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'Utility Warehouse's'</em> </span>current annual report :</span></div>
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<em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #cc0000;">"In March, we launched a number of films featuring Joanna Lumley as the new face of Utility Warehouse, explaining who we are and the benefits we provide to those looking to save money (by joining as a new Member) or make money (by becoming a Partner). These new tools were well received, and we have since seen an encouraging increase in the number of new Partners joining the business.”</span></em></div>
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<br />In reality, there is no independent evidence that<span style="color: #cc0000;"> '<em style="border: 0px; margin: 0px; padding: 0px;">Utility Warehouse'</em> </span>actually offers cheaper services. As for <i><span style="color: #cc0000;">“making money (by becoming a<span style="border: 0px; margin: 0px; padding: 0px;"> Partner</span>)”,</span></i> here’s what the annual report states:</div>
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<em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="color: #cc0000;">"Distribution expenses include the share of our revenues that we pay as commission to Partners, together with other direct costs associated with gathering new Members which are included as part of the Customer Acquisition Segment result for the year. These reduced slightly to £21.1m (2016: £21.4m), mainly reflecting lower energy commissions following the industry wide gas price reductions at the start of the financial year, partly offset by increased commissions paid to Partners from the increase in new Members and services." </span></em></div>
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<br />The annual report also stated that </div>
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<span style="color: #cc0000;"><i>"annual revenue is £740 million, with 600,000 customers and 41,700 <span style="border: 0px; margin: 0px; padding: 0px;"> distributors.”</span> </i></span></div>
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So, £21.1 millions was paid out among the 41,700<i style="color: #cc0000;"> 'distributors, ' </i>but that’s a mean average of £506 per year, or less than £10 per week. However, this figure, as pitifully low as it is, is still grossly misleading. Sellers have had to sign up a minimum number of buyers before they get paid any commission, so probably most got no payment at all. The company does not disclose anything about <i><span style="color: #cc0000;">'D<span style="border: 0px; margin: 0px; padding: 0px;">istributor'</span> </span></i>income, except to state:<br /></div>
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<em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="color: #cc0000;">"Whilst it is more challenging for Partners to gather new Members and build their Utility Warehouse businesses when there are such large pricing differentials in the energy markets, we have been pleased to see many of them still achieve significant success during the year by focusing on the unique strengths of our proposition and the exclusive benefits we offer."</span></em></div>
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One revealing reference appears in the <a href="https://s3-eu-west-1.amazonaws.com/whitepapers.utilitywarehouse.co.uk/becfaee9aae93505487ddf8c7bdc8c80cce179e1.pdf" style="border: 0px; color: #888888; margin: 0px; padding: 0px; text-decoration: none;" target="_blank">2013 annual report</a>:<span style="color: #444444;"> (</span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'Utility Warehouse'</em> </span>never repeated the data in future annual reports)</div>
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<span style="border: 0px; color: #9933ff; font-weight: 800; line-height: normal; margin: 0px; padding: 0px;"><em style="border: 0px; margin: 0px; padding: 0px;">"DISTRIBUTION CHANNEL</em></span></div>
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<span style="color: #cc0000;"><em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">The number of new Distributors joining the business between April and December last year averaged around 900 per month. Since then, we have seen a significant increase to around 1,300 per month, taking the total number of registered Distributors at the year end to a record high of almost 39,000 (2012: 37,263)."</em> </span><br /><span style="color: #cc0000;"><br /></span></div>
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<span style="color: #444444;">So, if </span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'Utility Warehouse'</em> </span><span style="color: #444444;">was recruiting 1,300 a month or 15,600 a year with a total annual number 37,263, that’s 42% of the total were recruited in the same year. So, at £200 a recruit, that was £3.12 million just in sign up fees gained for that one year 2013. </span></div>
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<span style="color: #444444;">For 2016, the company said it had 41,700 total</span><i> <span style="color: #cc0000;">'Partner/D</span></i><span style="color: #cc0000;"><i>istributors.'</i> </span><span style="color: #444444;">42% of that number (new recruits signed up in same year) is 17,514 new recruits, generating £1.75 million in sign-up fee revenue at £100 each. That’s also a significant % of the total commissions paid out to the recruiters. </span><br /><span style="color: #444444;"><br /></span></div>
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<span style="color: #444444;">If each</span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #444444;"> </span><span style="color: #cc0000;">'Partner/Distributor' </span></em><span style="color: #444444;">buys the average amount paid by the</span><em style="border: 0px; margin: 0px; padding: 0px;"><span style="color: #444444;"> </span><span style="color: #cc0000;">“customers”</span></em><span style="color: #cc0000;"> </span><span style="color: #444444;">for services, £1,230 per year, and the company pays 2.85% of revenue for </span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">“commissions”</em>,</span><span style="color: #444444;"> then the newest recruits (17,514) each bought £1,230 in a year’s time, or £21.54 million in total in services.</span><br /></div>
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<span style="color: #444444;">Overall, the company paid 2.85% in </span><span style="color: #cc0000;"><i>'</i><i>commissions'</i><i> </i></span><span style="color: #444444;">on revenue. So, if there were 41,700</span><em style="border: 0px; color: #444444; margin: 0px; padding: 0px;"> </em><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'Partners/Distributors'</em> </span><span style="color: #444444;">in 2016 and each bought the 'average' amount in services, £1,230, then these people<i> </i></span><span style="color: #444444;">themselves generated £51.291 millions in revenue. With 2.85% of that being transferred back to them, then another £1.46 millions of the<i>'</i></span><span style="color: #cc0000;"><i>commissions'</i></span><span style="color: #444444;"> came from the</span><em style="border: 0px; color: #444444; margin: 0px; padding: 0px;"> '</em><span style="color: #cc0000;"><i><span style="border: 0px; margin: 0px; padding: 0px;">Partner/D</span><span style="border: 0px; margin: 0px; padding: 0px;">istributors.'</span></i></span></div>
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<span style="color: #cc0000;"><span style="color: black;">Typically, of an </span><i>'MLM Compensation Plan,'</i><span style="color: black;"> the </span><i>'Utility Warehouse' </i><span style="color: black;">version is deeply-mystifying and guaranteed to shut-down the critical and evaluative faculties of anyone examining it who doesn't understand that its real function has been to shut down the critical and evaluative faculties of not just ill-informed victims of the scam, but also those of ill-informed observers (including regulators, journalists, etc.). </span></span></div>
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<span style="color: #cc0000;"><span style="border: 0px; font-family: arial, sans-serif; margin: 0px; padding: 0px;"><a href="http://static1.1.sqspcdn.com/static/f/384275/15650131/1324210774600/CompensationPlanChanges161211.pdf?token=BugVQuakpvKM4vQZxfgSPWyVIsA%3D" style="color: #888888; text-decoration: none;">http://static1.1.sqspcdn.com/static/f/384275/15650131/1324210774600/CompensationPlanChanges161211.pdf?token=BugVQuakpvKM4vQZxfgSPWyVIsA%3D</a></span></span></div>
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<span style="color: #444444;">In total, the above figures show that at least £3.21 million of the </span><span style="color: #cc0000;"><i>“commissions”</i></span><span style="color: #444444;"> came from the sign-up fees and purchases of the existing</span><span style="color: #cc0000;"> <em style="border: 0px; margin: 0px; padding: 0px;">“Partner/Distributors”</em>, </span><span style="color: #444444;">or 15% of the total paid out.</span></div>
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<span style="color: #444444;">In this case, the available data shows that </span><u style="color: #444444;">at least</u><span style="color: #444444;"> 15%, of the rewards come directly from the pockets of </span><span style="color: #444444;">participants in the pay plan themselves. This is only by counting the portion of the payments assigned to</span><i><span style="color: #cc0000;">'commissions.'</span></i><span style="color: #444444;"> If you use the gross profit figure, that is, the amount of revenue over the cost of the utilities the company resells, the amount that the</span><em style="border: 0px; color: #444444; margin: 0px; padding: 0px;"> </em><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;">'Partner/D</em><em style="border: 0px; margin: 0px; padding: 0px;">istributors'</em> </span><span style="color: #444444;">generate is much more. </span></div>
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<span style="color: #444444;">The company has a gross profit of about 18% after it pays for the utilities. So, if the</span><span style="color: #cc0000;"><em style="border: 0px; margin: 0px; padding: 0px;"> 'Partner/Distributors'</em><i> </i></span><span style="color: #444444;">generate £51.291 millions in revenue from their own personal purchases, then the company actually gains over £9.2 million in gross profit from purchases of these people</span><i><span style="color: #cc0000;"> </span></i><span style="color: #444444;">themselves, in addition to the £1.75 million gained each year in new sign up fees. </span><br /><span style="color: #444444;"><br /></span></div>
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<span style="color: #444444;">In reality, all the revenue has always derived from the</span><i><span style="color: #cc0000;"> 'Partner/Di</span></i><i><span style="color: #cc0000;"><span style="border: 0px; margin: 0px; padding: 0px;">stributors'</span>, </span></i><span style="color: #444444;">since they are recruiting, on average, 13</span><span style="color: #cc0000;"><i><span style="border: 0px; margin: 0px; padding: 0px;"> '</span>customers' </i></span><span style="color: #444444;">each. Of course, many of these </span><span style="color: #cc0000;"><i> 'customers' </i></span><span style="color: #444444;">were recruited by</span><em style="border: 0px; color: #444444; margin: 0px; padding: 0px;"> </em><span style="border: 0px; color: #444444; margin: 0px; padding: 0px;">non-salaried </span><span style="border: 0px; margin: 0px; padding: 0px;">participants </span><span style="color: #444444;">who long since quit, because few have actually received anything for their time and effort. Remember, they were required to find a minimum number of </span><i><span style="color: #cc0000;">'customers' </span></i><span style="color: #444444;">before they qualified for <i><span style="color: #cc0000;">'</span></i></span><span style="color: #cc0000;"><i>c</i></span><span style="color: #cc0000; font-style: italic;">ommissions.' </span><span style="color: #cc0000;"><span style="color: #444444;">On the average of the approximately £7000 gross annual revenue which 6 recruits would bring in for the company, the </span><i>'</i></span><span style="font-style: italic;"><span style="color: #cc0000;">Partner/Distributor'</span><span style="color: #444444;"> </span></span><span style="color: #444444;">would have got back the average of less than 3% (or below £4 per week) minus their own operating expenses. However, the company would have reaped just over 15% in profit (i.e. approximately £20 per week)</span><span style="color: #cc0000;">. </span><br /><br /><span style="color: #444444;">In other words, behind all the reality inverting </span><i><span style="color: #cc0000;">'UtilityWarehouse is powerful force for good'</span></i><span style="color: #444444;"> propaganda has lurked a constantly-churning de facto slave workforce obtained by getting useful idiots to endorse the fraudulent</span><span style="color: #cc0000;"> <em style="border: 0px; margin: 0px; padding: 0px;">unlimited income</em></span><span style="color: #444444;"> offer and make it seem</span><span style="color: #cc0000;"> <i>impossible that the company could be a cruel fraud.</i></span></div>
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<span style="color: #444444;">In summary:</span></div>
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<li style="margin: 0px 0px 0.25em; padding: 0px;"><span style="color: #444444;">42% of claimed</span><i> <span style="color: #cc0000;">'Partners/Distributors'</span></i><span style="color: #cc0000;"> </span><span style="color: #444444;">at year end are recruited during the year.</span></li>
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<li style="margin: 0px 0px 0.25em; padding: 0px;">This reflects an annual churn rate approaching 50%.</li>
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<span style="font-size: x-small;"><br /></span></div>
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<li style="margin: 0px 0px 0.25em; padding: 0px;">The annual churn-rate builds up eventually producing an overall rate approaching 100%</li>
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<li style="margin: 0px 0px 0.25em; padding: 0px;">We still don’t know the quitting rate specifically of those that join each year (ie the last ones in)</li>
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<li style="margin: 0px 0px 0.25em; padding: 0px;">The mean average gross-payment to<i><span style="color: #cc0000;"> 'Partner/D<span style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">istributors'</span> </span></i>is £506 per year, or less than £10 per week.</li>
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<span style="font-size: x-small;"> </span></div>
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<li style="margin: 0px 0px 0.25em; padding: 0px;"><span style="color: #444444;">The company pays out only 2.85% of its revenue in </span><i><span style="color: #cc0000;">'</span></i><span style="color: #cc0000; font-style: italic;">commissions'</span></li>
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<li style="margin: 0px 0px 0.25em; padding: 0px;"><span style="color: #444444;">Based on the minimum sign up fees for the newest recruits and the mean average purchases by the</span><i><span style="color: #cc0000;">“customers" </span></i><span style="color: #444444;">(£1,230 per year), at least 15% of all </span><span style="color: #cc0000;"><i>“commissions”</i></span><span style="color: #444444;"> paid to the </span><span style="color: #cc0000;"><em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">“Partner/Distributors”</em> </span><span style="color: #444444;">come out the 41 700 </span><em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;"><span style="color: #cc0000;">'Partner/Distributors'</span></em><span style="color: #444444;"> own pockets, but in the end, all the revenue is coming from a never-ending chain of </span><span style="color: #cc0000;">'<em style="border: 0px; line-height: normal; margin: 0px; padding: 0px;">Utility Warehouse' </em></span><span style="color: #444444;">contractees no matter how they are arbitrarily labelled on their take it or leave it contracts.</span></li>
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This brings me onto the<span style="color: #444444;"> </span>cultic/advance fee fraud<span style="color: #444444;"> </span>aspect of<span style="color: #444444;"> </span><i style="color: #cc0000;">'Utility Warehouse'</i> and its connections with a so-called<i><span style="color: #cc0000;">'Mindset Master'</span></i>, Wes Linden,<i style="color: #cc0000;"> </i>but I will cover this in a follow up article - which no doubt the Honourable Charles Wigoder, his associates and their attorneys, will not appreciate.</div>
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<span style="color: black; font-size: x-small;">David Brear (copyright 2017)</span></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com55tag:blogger.com,1999:blog-2020300354268548128.post-89611329883355730062017-05-31T17:35:00.002+05:302017-05-31T17:35:25.243+05:30Rajasthan police probing more MLM frauds after cracking RCM and Gold Sukh<div dir="ltr" style="text-align: left;" trbidi="on">
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<strong style="border: 0px; font-family: inherit; font-size: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">It is not sure whether Superstar Amitabh Bachhan is aware of the fact that police are investigating into the fraudulent practices of RCM, he is promoting the business of this company.</strong></div>
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<strong style="border: 0px; font-family: inherit; font-size: inherit; font-stretch: inherit; font-style: inherit; font-variant: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">While Rajasthan police are taking on fraudsters who are operating various MLM and ponzi schemes, the state government is working on a bill to curb the MLM menace</strong><br style="margin: 0px; padding: 0px;" />The growing menace of multi level marketing (MLM) and ponzi schemes like Speak Asia are increasingly coming under the scrutiny of several state agencies. <br style="margin: 0px; padding: 0px;" />After Andhra Pradesh and Kerala, police from Rajasthan have been pro-active in busting such schemes and are investigating the activities of such companies.<br style="margin: 0px; padding: 0px;" />Recently, the Rajasthan police unearthed a MLM scheme operating under the name of Right Concept Marketing (RCM) in Bhilwara district, famous for its clothing industry. The police are tracking couple of other similar schemes. <br style="margin: 0px; padding: 0px;" />According to an officer close to investigation, besides RCM, there are lot of schemes offering investment and high returns on gold, while others are selling some kind of products in Rajasthan. <br style="margin: 0px; padding: 0px;" />The officer, preferring anonymity, told <em style="border: 0px; font-family: inherit; font-size: inherit; font-stretch: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; margin: 0px; padding: 0px; vertical-align: baseline;">Moneylife</em> that, “We are looking at the financial analysis of these schemes. Generally, they always promise high income on recruiting new people. There have been few complaints from the people. Apart from booking the master-minds of these schemes under the Prize Chits and Money Circulation Banning Act, we have also charged them with certain sections of the IPC (Indian Penal Code).”<br style="margin: 0px; padding: 0px;" />Recently the bail applications of RCM directors were rejected by the Rajasthan High Court as it found prima facie evidence against them in money circulation scheme.<br style="margin: 0px; padding: 0px;" />According to police estimates, the fraud is in the tune of Rs2,000 crore. The business model of RCM, was based on networking where it invited people to become member on the payment of Rs1,500. To avail 10% commission they were asked to recruit more people in the scheme. The company is not registered under the Companies Act. <br style="margin: 0px; padding: 0px;" />“We are closely co-ordinating with different government agencies. For instance, we are in touch with enforcement wing of the Income Tax department,” the officer added.<br style="margin: 0px; padding: 0px;" />In November, last year, ponzi scheme Gold Sukh made headline after it allegedly duped 1.75 lakh investors for more than Rs300 crore. Gold Sukh promised returns 27 times than the investment in just 15 months and was able to lure many politicians, police officers and businessmen. The Jaipur police are probing the scheme and had also issued a Red Corner Notice, through Interpol, against its absconding directors.<br style="margin: 0px; padding: 0px;" />According to a news report, Rajasthan chief minister has asked officials to draft a bill against fraudulent MLM schemes against the backdrop of the on going investigation in the multi-crore Gold Sukh scam.</div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com8tag:blogger.com,1999:blog-2020300354268548128.post-25216574616040861502017-05-15T21:21:00.001+05:302017-05-15T21:21:34.330+05:30NMart cases to be tried in Guntur of Andhra Pradesh<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7eqqVyQQ1SZC8PQPWQv3TK_mnEw7i9l_Jwz5LADkpmNLdzX9DEJmZi72NMRr7BNlICWr9WMhpC_QyTdecEjj_qy9jZHgCZ24Go6dpxKxJyMR-eyaocNntB-BCh6vyfQxNoo0rVsxA_gw/s1600/NMART.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7eqqVyQQ1SZC8PQPWQv3TK_mnEw7i9l_Jwz5LADkpmNLdzX9DEJmZi72NMRr7BNlICWr9WMhpC_QyTdecEjj_qy9jZHgCZ24Go6dpxKxJyMR-eyaocNntB-BCh6vyfQxNoo0rVsxA_gw/s320/NMART.JPG" width="180" /></a></div>
The Supreme Court has given order on May 1, 2017, transferring all NMart cases to Guntur in Andhra Pradesh where first FIR was filed against the company under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The Supreme Court ordered the investigating authorities to complete the investigation as far as possible within three months.<br />
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Once the investigation is completed and charge sheet is filed, all the cases in the states other than Andhra Pradesh shall stand transferred to the concerned court in Guntur, Andhra Pradesh, where the first FIR was filed.<br />
The said court may permit evidence of outstation witnesses to be recorded by video conferencing, if any such permission is sought, and if trial is not hampered thereby. </div>
Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com2tag:blogger.com,1999:blog-2020300354268548128.post-4223059131778024452017-05-08T17:40:00.001+05:302017-05-08T17:40:55.745+05:30ANOTHER CRIMINAL CASE AGAINST AMWAY<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">CONTRARY TO THE CLAIMS B Y AMWAY THAT CRIMINAL CASES WERE FILED ONLY ANDHRA PRADESH AND TELANGANA, CRIMINAL CASES WERE FILED ELSEWHERE IN THE COUNTRY AGAINST THE FRAUDULENT BUSINESS MODEL OF AMWAY. HERE IS PROOF.</span></div>
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TRIBUNE </div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">Posted at: Jan
12, 2017, 2:12 AM; last updated: Jan 12, 2017, 2:12 AM (IST)<o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 24.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 18.0pt;">Charges framed against two Amway
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<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">Sandeep Rana </span></b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">Tribune News
Service </span></b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">Chandigarh,
January 11 </span></b><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">A local court
today framed charges against two Amway India directors, including a foreign
national, in a cheating case. The third co-accused director, Stephen William
Bedder, is a proclaimed offender in this case. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">The charges
were framed against William Scot Pinckney and Prithvi Raj Bijlani under Section
420 of the IPC and Sections 3 and 4 of the Prize Chits and<a href="https://www.blogger.com/null" name="_GoBack"></a>
Money Circulation Schemes (Banning) Act. There were eight complainants in these
three cases. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">According to
the complaint, as part of a criminal conspiracy, the three accused started a
multi-level money marketing scheme and cheated Ramesh Dubey, Narinder Kumar and
Inderjit Kaur, co-complainants, by fraudulently inducing them to become members
by paying Rs 4,400 each and further induced them to enrol more members for
getting commission. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">The complaints
alleged that neither did they get the promised commission nor the amount paid
by them to the company. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">“... the
accused cheated the complainant under Section 420 of the IPC,” said Akshdeep
Mahajan, Chief Judicial Magistrate. They were booked at the Sector 26 police
station for cheating. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; line-height: 107%; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">“...If a member enrols more members, the member on the top gets more
commission without doing anything, which is a clear violation of Section 3 of
the Prize Chits and Money Circulation Schemes (Banning) Act; thereby the
accused have committed an offence punishable under Section 4 of the Act,” the
CJM said.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-bidi-language: TE; mso-fareast-font-family: "Times New Roman";">Source: http://www.tribuneindia.com/news/chandigarh/courts/charges-framed-against-two-amway-directors/349309.html<o:p></o:p></span></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com0tag:blogger.com,1999:blog-2020300354268548128.post-8971057222794785032017-04-24T22:26:00.002+05:302017-04-24T22:26:51.669+05:30With soap in their hands & Hope in their hearts<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
<b>Here is an article
which was written way back in 1998 by Ramjee Chandran and published in The
Bangalore Monthly Update magazine in June, 1998. The writer envisioned the
fraudulent scheme of Amway long back before the police filed criminal cases
against the MNC, which has been still in 2017 looting the public in the name of
direct selling handing over highly-priced, adulterated and unbranded products
to the consumers. <o:p></o:p></b></div>
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<br /></div>
<div class="MsoNormal">
<b><span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Ramji
Chandran <o:p></o:p></span></b></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">According to the local office of Amway India, about 6,500
Bangaloreans have already singed up to become Amway salespersons.<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">These 6,500 people have paid the USA-owned Amway Corp. Rs
4,200 each i.e. 6,500x4,200= (almost) Rs 3 crore. Cash up front. And that’s
only in Bangalore. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">A Bangalore company probably can’t raise this kind of money
in the stock market in these days of tight money conditions.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">But Amway did. Without advertising. Without the great dollops
of press coverage that even the launch of a new whisky usually generates. It’s all word of mouth, we are told. Word from
the mouths of people living abroad, who have been told by Amway to call their
kith, kin and caboodle in India. Word is also to spam you on the internet. Spam
is unsolicited promotional material—junk mail on the net. Word is to send you
cheap postcards. Calling, writing, faxing or spamming people in India to tell them
of the good news. The good news is that they have the means to ‘help’ you to
change your life. To ‘own your business’. To ‘earn your freedom’. To ‘not just
get a life, but get a lifestyle’. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">The subliminal message is: Stop being a loser. Whatever
you’ve been doing with your life, it is worth less than what you can do as an
Amway salesperson. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">When I put this last proposition across to an Amway
salesperson, his response was this. “You’ve hit the nail on the head. You are right.
That is the case.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">He explained further: “You don’t have to give up your
publishing business (thank god). Use your spare time profitably. What do you do
when drive to work? Nothing! What do you do in the evenings? Watch TV? Pah!”<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Right through this entire opening phase, something nagged me.
There was no mention of what Amway did. What was the ‘word’ that this guy kept
talking about. What was Amway selling?<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">I asked him. “The dream, my man,” he replied his face aglow,
“the dream. Amway is not selling you anything Amway is giving you a ‘business
opportunity’ you cannot beat.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“The ‘business opportunity’ to do what?” I asked, still
confused. “The opportunity to use world class products. The opportunity to get
others to use world class products. He opportunity to change your life.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“What world class products?”<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Only the best.” <o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Name one product.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Many products. 10,000 products. From shampoo to Chrysler
cars!”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“I can buy Chrysler cars in Bangalore?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Not yet. But the day will come. May be not Chrysler cars but
may be Marutis.”<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“I can buy a Maruti through Amway?” <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Of course! When they tie up the deal.”<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“What deal?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Distribution deal. If Maruti is smart, theywill understand
that in a few years, only multi-level marketing will survive. Even Bill Gates
said. The end of retail selling is here. Amway will overtake them. By the year
2000, no one will buy anything from shops.”<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Which shops?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Any shop. Every shop.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Nilgiris, Shoppers’ Stop, Folio and Bata will all close
down?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Yes of course.” He sounded a little exasperated. TGhen he
became paternal. He employed the tone one uses to talk to a friend’s child.
“Are you aware of Amway?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Yes.” I replied. “I have read everything they gave another
salesmean like yourself. And I went to an Amway meeting.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Then you have learned nothing, my friend, nothing! You must
have spoken to the wrong person. The world is going to change. Haven’t I
already told you that retail selling dead?”<o:p></o:p></span></div>
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<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">I didn’t give up. “Where is this place where they stock
10,000 products. I’d like to see it for myself.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Well, it’s not 10,000 products yet. But it will get there.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“How many products do they have right now?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“That is immaterial. You’re just being pedestrian.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Tell me how many products do theyhave?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Six.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Six of what?”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">“Detergents, a great Liquid Organic Cleaner, which you can
pour into your plants after cleaning the floors and Dish Drops which will make
your glassware shine like anything!”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Before I could speak, he added. “They also have a lotion and
a shampoo. But why am I telling you all this. The point is not the products but
the opportunity. No matter what the products are, the opportunity will make you
lots of money. And then you can retire. What is needed is not for us to quibble
about details. We—you, me and everybody—must do all we can to make this
succeed.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Then, totally pickled in his own sales pitch, he began to
shout” GET OFF THE POT! GET ON THE PHONE, MAN, AND SPREAD THE WORD!! USE YOUR
MAGAZINES AND TELL LAKHS OF PEOPLE THE GOOD NEWS!!!”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">So I got off the pot, picked up my phone and began to
research the story.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">HOW IT WORKS<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Amway’s operations rest on what is called multilevel
marketing (or MLM). It has been called network called ‘network marketing’,
pyramid selling (a phrase that inspires vitriol among Amway types). It has also
been compared to chain letter or the buying of a lottery ticket.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">How it works is both simple and complicated at the same time.
<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">You try and sign up others as fellow Amway distributors. You
get commission on whatever they buy. You also get commissions on the purchases
made by the people whom they in turn sign up as Amway distributors.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">The more people you sign up, the more they will buy. The more
they buy, the more money you will make. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">HOW TO BECOME A MILLIONAIRE<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Now I will explain the 9-6-3 scheme because every Amway
distributor talked about this. Having signed up, you get 9 people to sign up.
Next, each of the nine people gets 6 people to sign up. Then, each of those 6
people gets 3 people to sign up.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Here’s the calculation. You=1. Youx 9= 9 people. 9x6= 54.
54x3=162. Total=262 Amway distributors in your group.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">If you achieve this target, you no longer ‘belong; to someone
else’s group. You become a ‘direct’. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">The next assumption is that each of these 226 people in your
group will buy an average of Rs 1,500 worth of Amway products every month.
226xRs 1,500=Rs. 3,39,000 per month. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">For every Rs 1,500 worthof product purchase you get 50PV
(Point Value). It works out to about
3.34% of the value of products bought. For every PV you get a commission. It is
called ‘bonus’.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">There is a (telescopic) slab system to determine your bonus.
The lower the quantity of purchase, the lower the commission. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">Till you reach the level of 200PV (that’s Rs. 6,000 worth of
goods) you get no bonus. With 200PVs you earnings (bonus for that month) will
be Rs 180. When you (together with your group) buy Rs 15,000 worth of products,
you will get 500PV. Your bonus on this will still be 3% and your personal
income will be Rs. 450 per month less whatever is to be shared with the others
in the group.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-size: 12.0pt; line-height: 115%; mso-bidi-font-size: 11.0pt;">If you and your group members buy Rs 3.39 lakh worth of
Amwayproducts every month, you will earn 11,300PV. Your bonus on this will be
21% and you will earn Rs 71,900. After sharing your bonus with the others in
your group you will be left with Rs 40,500.<o:p></o:p></span></div>
<div class="MsoNormal">
At this level the bottom 162 people in your group make no
bonuses at all because their PV is less than 200, having bought only Rs 1,500
worth of product. However, you have nothing to worry about. You will make
bonuses on their purchases because their PVs are counted in your tally.</div>
<div class="MsoNormal">
Remember, you will earn this Rs 40,500 a month only. </div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]-->1)<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->IF you get to sign up 226 people;</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]-->2)<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->IF you make sure that each and every one of the
226 people buy Rs 1,500 worth of products EVERY MONTH; and</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<!--[if !supportLists]-->3)<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->IF every one of these 226 people has the ability
and the desire to pay Amway prices because Amway makes the claim that their
products are ‘world class’. </div>
<div class="MsoNormal">
<b>Amway Products vs.
other products<o:p></o:p></b></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]-->1.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->G&H body lotion, 250ml Rs 316 – Nivea lotion
250 ml Rs 110.</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]-->2.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Satinique (shampoo & conditioner) 250ml Rs
314 –Sun silk (shampoo & conditioner) Rs 85</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]-->3.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--> Dishdrops
(1 litre=4 litres) Rs 420—Godrej Concentrate Rs 64</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]-->4.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->SeeSpray Concentrate (1litre=4litres) Rs
290—Cxolin Glass Household cleaner Rs 252</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo2; text-indent: -.25in;">
<!--[if !supportLists]-->5.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Amway zoom concentrate 1 litre. Rs 299—Robin
Cuff’s N Collars 128</div>
<div class="MsoNormal" style="margin-left: .25in;">
(Note: I could not work out a way
for people to spend Rs 1,500 a month without wasting the product)</div>
<div class="MsoNormal">
When you get 226 people in your group, you become a
‘direct’. Your commission drops to 4% on the purchases of the group. Then what?
Then you go sign up more and more people if you want to make more money.</div>
<div class="MsoNormal">
If you want to become a millionaire, you will need to sign
up several hundreds of people and have them all buy more Amway products. If you
are the poor sod at the bottom of the heap, you will be told ‘if you work hard’
you can sign up hundreds, why thousands, of people from anywhere in the world
to become Amway distributors and that i.e. by ‘working hard’, you can beat the
odds and become a millionaire.</div>
<div class="MsoNormal">
(When you become a millionaire—by ‘working hard’ in your
spare time—you can buy the BMW they kept showing you in the promotional videos…
the one that had the stereotype honey-blond draped over the dude who was
playing golf.)</div>
<div class="MsoNormal">
You are also being told that if you aren’t making nice
dollops of money, it is because you aren’t ‘working hard’.</div>
<div class="MsoNormal">
The definition of ‘working hard’ is to get as many as people
as you can to pay Amway Rs 4,200 to become distributors. </div>
<div class="MsoNormal">
There’s another way. That is to sell products door-to-door or
person-to-person. You could do that too. There should be nothing to stop you
from lining up outside apartment buildings with the dabba distributors of
Bangalore and sell Amway shampoo for Rs 315. You could also be posh and invite
the ladies of your kitty party for tea and then sign them up or sell them
shampoo or detergents.</div>
<div class="MsoNormal">
The positive side to Amway</div>
<div class="MsoNormal">
Let me say that the above is the positive to Amway. That is,
the chance to make money. It is the chance to get oneself involved in a trade
as a side business, specially, if one is trying to recover from a failed (or
failing business) or one has lost one’s job. To the extent that a few people
will surely make money, the system works. </div>
<div class="MsoNormal">
Alas, that’s not where the story ends.</div>
<div class="MsoNormal">
Because for everyone, who makes money, there will be
necessarily many who do not. Indeed, as I went along from Amway distributor to
Amway distributor, I found myself vastly better informed than most of them,
with the exception of one articulate couple. </div>
<div class="MsoNormal">
They spent over two hours with me, explaining the nitty-gritty
of the commission structure, despite reservations, I thank them for this. </div>
<div class="MsoNormal">
In direct contrast was my experience with the people at
Amway’s nice office on Airport Road. </div>
<div class="MsoNormal">
I spent two hours in the Amway office on Airport Road. The
administrative manager, Arijit Mitra, turned out to be extremely personable and
a gentleman. However, he did say that he would not be able to answer any
questions about the details of the scheme and indeed, he wanted to know why I
wanted to write an in-depth story. His colleague, a lady that person
distributors speak to, firs told me that she would come back in ten minutes and
then she vanished from plain sight.</div>
<div class="MsoNormal">
After one and a half hours, there was no sign of her and
Mitra kept me engaged. Then another lady came out and told me that she was
‘very busy’. I told her I would wait indefinitely. Then Mitra reappeared from
the bowels of the Amway office and looked apologetic. He said his colleague
would not meet me because she did not want to meet me. He explained that she
was not ‘authorised to talk to the press’. </div>
<div class="MsoNormal">
I tried to ask him to tell Vinitha not to hide inside the
budding and that my questions were very simple. But no dice. I never got to ask
questions of the very person who was <b>qualified</b>
to answer them.</div>
<div class="MsoNormal">
Then I asked Mitra to call her superior (Gowry someone) in Delhi
so I could talk to her. He did. He told me that she had told him the same
thing. Mitra asked me to go to Delhi and speak to someone called Steven Beddoe.
He said that was no on in Bangalore who was authorised to talk to the press.</div>
<div class="MsoNormal">
I asked Mitra why Amway had people in Bangalore who were
authorised to take money Bangaloreans but no one who could be account table for
this. Mitra had no answer.</div>
<div class="MsoNormal">
The underside of Amway</div>
<div class="MsoNormal">
My basic problem with Amway is that I believe that the
success of some is dependent on the failures of others. That is:</div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l2 level1 lfo3; text-indent: -.25in;">
<!--[if !supportLists]-->1.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Amway will make money; and</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l2 level1 lfo3; text-indent: -.25in;">
<!--[if !supportLists]-->2.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]--> Some
distributors will make money; but</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l2 level1 lfo3; text-indent: -.25in;">
<!--[if !supportLists]-->3.<span style="font-size: 7pt; font-stretch: normal;">
</span><!--[endif]-->Both will do so at the expense of the many that
might not.</div>
<div class="MsoNormal">
And those who don’t will probably be middle income people
for whom Rs 4,200 is a major piece of investment. (My accountant spends less on
school fees for his two children for the whole year.)</div>
<div class="MsoNormal">
As a quick aside, let me quote the ‘zero sum theory’. For
those who might not know it, this is a theory propounded bythe famous
economist, Lester Thurow. His book ‘The Zero Sum Society’ explains it in detail
with a lot of econometric models. It will take me over a 100 pages to go into
all that. Basically, Thurow said that for every person who has made a certain
amount of profit, someone else has made an equivalent amount of loss. </div>
<div class="MsoNormal">
This is like the horse races. Any Turn “Club will make
money. A small number of bettors will make money. (One of them will hit the
jackpot.) The only way that the Turf Club can make someone rich is because
thousands of hopefuls lose their bets and their money. It is the losers’ money
which is collected and passed on to the lucky ones. The lottery works in pretty
much the same way.</div>
<div class="MsoNormal">
I am not saying that Amway is like a horse race or a lottery.
But the overall money movement and the odds of someone becoming rich are
startlingly similar.</div>
<div class="MsoNormal">
This is better explained with numbers. Remember how many
people you need to sign up? I’ll remind you—225. If you must get 226 people
including you to sign up, then consider this—6,500 people (in Bangalore alone)
have already signed up. Each one of them hopes he or she will make a lot of
money. It is reasonable to expect that if one Amway distributor stand s a
chance of becoming a millionaire, then every Amway distributor should stand an
equal chance of becoming a millionaire…otherwise it is exactly like a horse
race. </div>
<div class="MsoNormal">
So, if all 6,500 people achere to the 9-6-3 formula, then
hold on to your hatwhen you read this.</div>
<div class="MsoNormal">
6,500x9= 58,500 Amway distributors,</div>
<div class="MsoNormal">
58,500x6=3,51,000 Amway distributors</div>
<div class="MsoNormal">
3,51,000x3=10,53,000 Amway distributors</div>
<div class="MsoNormal">
That’s ten lakh fifty three thousand for the city of
Bangalore. </div>
<div class="MsoNormal">
An employee of Bata Shoe Company told me that they employ
about 30,000 sales people in their 1,500 stores across the nation. 30,000 Bata
sales people for the whole nation and 10,53,000 Amway sales people only for
Bangalore. </div>
<div class="MsoNormal">
Two days after my visit to the Amway office I received a
call from the Amway HQ in Delhi from Steven Beddoe, GM, Distributor services.
he told me that the numbers would never grow to what I have mentioned above.
Because I persisted Beddoe suggested that the possible number of Amway
distributors in Bangalore would be about 1.67% of the middle class population. </div>
<div class="MsoNormal">
Bangalore’s population is about 5.2 million. Of this let’s
be conservative and say that 25 per cent are middle class. That is 1.3 million
of which 1.67 per cent (21,710) would be Amway distributors. Beddoe reacted
again. He said he didn’t think that the total number of Amway distributors
would be that many. (He even said that the number was less for a certain South
Asian country.) <span style="display: none; mso-hide: all;">e even said that the
numb er was less for a certain South Asian country)<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I asked him ikf that number could be as low as 10,000. He
said that was a possibiolity. (10,53,000 to 10,000 and we still don’t have a
number.)</div>
<div class="MsoNormal">
Then the chances of people making money is slashed because
Amway themselves are suggesting that each person will sign up less than two
other people on an average. Therefore, if some of them manage to sign up 220
people, many others won’t sign up people at all.</div>
<div class="MsoNormal">
And if you divide this number—10,000 into groups of 226,
then the total number of directs in the Bangalore will be 44. In essence,
10,000-44=9,956 Amway distributors, who do not stand the chance of becoming
‘directs’. Who will be among the lucky 44? YOU?</div>
<div class="MsoNormal">
I asked Beddoe to help me with this puzzle and apart from
giving me philosophical discourse, he couldn’t address the matter of numbers.
All he said was that Amway distributors should sign up more and more people.
Which brings me to my next thought.</div>
<div class="MsoNormal">
Why Amway will make money even if you don’t</div>
<div class="MsoNormal">
Another interesting calculation. If 1.05 million people sing
up0, Amway will receive Rs 442. 26 crore in upfront cash from this ‘cash rich’
country. They will have earned all this money without having sold a single one
of their very expensive products. </div>
<div class="MsoNormal">
Then, by some chance, if all these people actually manage to
spend Rs 1,500 a month on products. Amway will giggle into their bank manager’s
sleeves having earned another Rs 1,895.40 crore or on sales very year.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>THIS IS THE FIRST PART. MORE TO FOLLOW</b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
<br /></div>
</div>
Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com2tag:blogger.com,1999:blog-2020300354268548128.post-44629555573370848642017-04-12T20:28:00.003+05:302017-04-12T20:28:44.814+05:30OUR CONSISTENT STAND AGAINST M/s. AMWAY INDIA PRIVATE LIMITED VINDICATED<div dir="ltr" style="text-align: left;" trbidi="on">
<div align="center" style="background: white; text-align: center;">
<br /></div>
<div style="background: white;">
<span style="color: #222222; font-family: "helvetica" , "sans-serif";">Dear
fellow consumer and social activists,</span></div>
<div style="background: white;">
<br /></div>
<div style="background: white; text-align: justify;">
<span style="color: #222222; font-family: "helvetica" , "sans-serif";">You are quite aware
that we have been consistently and persistently articulating that preponderant
of dietary supplements of Amway are sub-standard, spurious and do not match
with the alluring claims and contentions about, quality, utility, standard etc.,
made by the Amway about these products, However, Amway has been intentionally
creating a myth about the alleged superiority of its products with an ulterior
motive to influence the choice and buying decisions of gullible public to
pander to its profiteering. In fact, Amway justifies the charging of exorbitant
price for its products on the ground of their alleged value addition and
product superiority. However, there is an unbridgeable hiatus in between what
the Amway holds out to the public and what these products actually are. The
Food Safety and Standard Authority of India has rejected product approval to
certain products of Amway, endorsing our contention. We urge your good self to disseminate this consumer friendly
information to save the gullible consumers from being cheated and further for
facilitating their informed choices.</span></div>
<div style="background: white; text-align: justify;">
<span style="color: #222222; font-family: "helvetica" , "sans-serif";"><br /></span></div>
<div style="background: white; text-align: justify;">
<span style="color: #222222; font-family: "helvetica" , "sans-serif";"><br /></span></div>
<br /></div>
Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com0tag:blogger.com,1999:blog-2020300354268548128.post-60543090482685054202017-04-12T19:03:00.002+05:302017-04-12T20:25:38.738+05:30NETSURF, yet another racketeer on prowl BEWARE<div dir="ltr" style="text-align: left;" trbidi="on">
My dear fellow Indians, BEWARE BEWARE BEWARE<br />
<div>
Here is another crook joined the rank of dubious companies to sell products in the name of direct selling. Its business model is also same that of Amway which was pronounced by the Andhra Pradesh High Court guilty of promoting illegal money circulation scheme.</div>
<div>
These crooks sell their products in the name of direct selling but in fact there are hundreds and thousands of intermediaries who collect the commission on the purchase of products. </div>
<div>
All these products are high-priced and every person who wants to purchase these products should become a member of the company. If he wants to earn commission he needs to enroll more members under him and he would be paid commission for every product the downline members purchased from the company, which is nothing but a ponzi scheme. The Andhra Pradesh High Court in Speakasia case, stated that enrollment itself is ample proof of illegal money circulation scheme. </div>
<div>
Beware of the agents who are already on prowl to enroll more members into the vortex on the pretext that early bird would get the benefits and late entrants would be losers. </div>
<div>
Everyone is a loser in this direct selling as everyone should purchase products of some thousands of rupees every month to remain as member. </div>
<div>
<br /></div>
</div>
Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com2tag:blogger.com,1999:blog-2020300354268548128.post-56048586201256659022016-12-28T17:29:00.002+05:302016-12-28T17:29:44.073+05:30Qnet scam: Rs144 crore recovered so far<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://www.blogger.com/null" style="box-sizing: border-box; color: #40a3d3; outline: none;">Jayprakash S Naidu</a> <br style="box-sizing: border-box;" />Hindustan Times</div>
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<img alt="Highlight Story" src="http://www.hindustantimes.com/rf/image_size_960x540/HT/p2/2016/12/28/Pictures/_d3fa95de-cccb-11e6-b3cb-dcd306bf19b8.jpg" style="border: 1px solid rgb(221, 221, 221); box-sizing: border-box; outline: none; vertical-align: middle; width: 630.5px;" /><h2 style="box-sizing: border-box; color: inherit; font-family: 'PT Serif', serif; font-size: 14px; font-weight: 500; line-height: 20px; margin: 5px 0px 0px;">
Former billiards champion Micheal Ferreira is one of the prime accused in the Qnet scam. (HT Photo )</h2>
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<article class="story-details" style="box-sizing: border-box; float: left; margin: 0px 0px 0px 80px; width: 554.828px; z-index: 10004 !important;"><div style="background-color: white; box-sizing: border-box; color: #212121; font-family: 'PT Serif', serif; font-size: 20px; line-height: 32px; margin-bottom: 20px;">
</div>
<div style="background-color: white; box-sizing: border-box; color: #212121; font-family: 'PT Serif', serif; font-size: 20px; line-height: 32px; margin-bottom: 20px;">
The Economic Offences Wing (EOW) of the Mumbai Police, probing the money trail in the QNet case, has so far recovered Rs144 crore by freezing several bank accounts of the accused.</div>
<div style="background-color: white; box-sizing: border-box; color: #212121; font-family: 'PT Serif', serif; font-size: 20px; line-height: 32px; margin-bottom: 20px;">
The EOW has appealed to investors to come forward and file complaints against the accused, so that their money can be returned.</div>
<div style="background-color: white; box-sizing: border-box; color: #212121; font-family: 'PT Serif', serif; font-size: 20px; line-height: 32px; margin-bottom: 20px;">
An EOW official said five lakh investors were affected and that the scam runs into Rs1,000 crore. The Rs144 crore was recovered by freezing bank accounts of the accused and those bank accounts where the money was transferred. A lot of money has been sent out of the country, the official said. The official added that so far, they have received written complaints from only 400 victims from across India and have hence appealed to other investors to come forward.</div>
<div style="background-color: white; box-sizing: border-box; color: #212121; font-family: 'PT Serif', serif; font-size: 20px; line-height: 32px; margin-bottom: 20px;">
In all, 30 people have been arrested. The official said Srinivas Rao Vanka, the director of Vihaan Direct Selling India Pvt. Ltd and Michael Joseph Ferreira, former world billiard champion, are among the key accused.</div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com2tag:blogger.com,1999:blog-2020300354268548128.post-2898744101035083572016-12-27T23:01:00.000+05:302016-12-27T23:06:59.956+05:30'MLM' Pitchman, Donald Trump, Picks 'MLM' Racketeer, Betsy DeVos, as Education Secretary.<div dir="ltr" style="text-align: left;" trbidi="on">
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<img alt="Donald Trump,Betsy DeVos" src="http://www.gannett-cdn.com/-mm-/3fe4916bc522a07f64f1b9f9c835cb064b3aee9f/c=142-0-2529-1790&r=x404&c=534x401/local/-/media/2016/11/23/DetroitNews/B99468301Z.1_20161123141018_000_GOR18773B.1-0.jpg" height="480" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(119, 119, 119); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px;" width="640" /><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="http://www.newyorker.com/news/news-desk/betsy-devos-trumps-big-donor-education-secretary" style="color: #888888; text-decoration: none;">http://www.newyorker.com/news/news-desk/betsy-devos-trumps-big-donor-education-secretary</a> </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span><span style="font-family: "arial" , "helvetica" , sans-serif;">Earlier today my Blog was swamped with visits to<i><span style="color: #cc0000;"> 'Amway'</span></i> pages. I then discovered that Donald Trump has named Betsy DeVos as Education Secretary.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040; font-weight: bold;"><br /></span><span style="color: #404040;">As Donald Trump gets set to take over as the next US President, media attention has again suddenly focused on what he will do with his business and whether his largely-opaque money making activities represent a conflict of interest prohibited by the US Constitution.</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040;"><br /></span><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 16px;">During the campaign,Trump never stopped boasting of his </span><i style="font-family: Helmet, Freesans, Helvetica, Arial, sans-serif; font-size: 16px;"><span style="color: #cc0000;">tremendous wealth and business skills.</span></i><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 16px;"> He now claims he will hand complete control of his business to his three eldest children - Donald Jr, Ivanka and Eric. However, this move has done nothing to allay fears that Trump will exploit the presidency to his own financial advantage and to that of his associates.</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040;"><br /></span><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;">To date, only a few journalists have delved into Trump's</span><span style="color: #cc0000; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;"> </span><i style="font-family: Helmet, Freesans, Helvetica, Arial, sans-serif; font-size: 1rem;"><span style="color: #cc0000;">'MLM'</span></i><span style="color: #cc0000; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;"> </span><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;">racketeering activities, but perhaps the appointment of Betsy DeVos will change this situation.</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;"><br /></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;"><br /></span></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;"><br /></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040; font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;"><br /></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040; font-size: 1rem;"><span style="color: #171717;">For decades, the </span><span style="color: #cc0000;"><i>Utopian</i> <i>'MLM income opportunity' </i></span><span style="color: #171717;"> lie has been used to bedazzle, blame and steal billions of dollars from, millions of constantly-churning victims around the world. </span></span></span><br />
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<a href="https://www.blogger.com/goog_1865717576" style="color: #888888; text-decoration: none;"><span style="font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif; font-size: 1rem;"><span style="color: #404040;"><br /></span></span></a><span style="font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif;"><span style="color: #404040;"><a href="http://www.motherjones.com/politics/2014/01/devos-michigan-labor-politics-gop" style="color: #888888; text-decoration: none;">http://www.motherjones.com/politics/2014/01/devos-michigan-labor-politics-gop</a></span></span><br />
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<span style="font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif;"><br /></span><span style="font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif;"><br /></span><span style="font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif;"><br /></span><span style="font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif;"><img alt="See original image" src="http://image.slidesharecdn.com/erikprince-100309124825-phpapp02/95/erik-prince-7-728.jpg?cb=1268138921" height="480" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(119, 119, 119); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px;" width="640" /></span><br />
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<span style="font-family: "helmet" , "freesans" , "helvetica" , "arial" , sans-serif;"><span style="color: #404040;"><a href="http://www.thedailybeast.com/articles/2016/10/22/blackwater-founder-erik-prince-loves-anti-iraq-war-donald-trump0.html" style="color: #888888; text-decoration: none;">http://www.thedailybeast.com/articles/2016/10/22/blackwater-founder-erik-prince-loves-anti-iraq-war-donald-trump0.html</a></span></span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040;"><br /></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040;"><br /></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040;">The appointment </span></span><span style="color: #404040; font-family: "arial" , "helvetica" , sans-serif;">Ms. DeVos</span><span style="color: #404040; font-family: "arial" , "helvetica" , sans-serif;"> to an influential position of government in itself represents a huge conflict of interest. For a start, she is a prominent member of one of the original </span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #cc0000;"><i>'Amway' </i><span style="color: #444444;">cultic</span> </span></span><span style="color: #404040; font-family: "arial" , "helvetica" , sans-serif;">crime families, whilst her brother, Erik Prince (the instigator of </span><i style="font-family: arial, helvetica, sans-serif;"><span style="color: #cc0000;">'Blackwater'</span></i><span style="color: #404040; font-family: "arial" , "helvetica" , sans-serif;">), has been one of the most-controversial figures in the USA in recent years.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #404040;"><br /></span><span style="color: #404040;"><br /></span><span style="color: #404040;">David Brear (copyright 2016)</span></span><br />
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com3tag:blogger.com,1999:blog-2020300354268548128.post-76019977075643973782016-09-28T20:57:00.001+05:302016-09-30T19:37:31.678+05:30Sudden volte-face by Ministry of Consumer Affairs regarding Multi-Level Marketing<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="line-height: 16.1px; text-align: justify;">It appears that the Ministry of Consumer Affairs has inadvertently issued the advisory to the State governments and Union territories to frame guidelines for the direct selling industry. In other words it is nothing but volte-face on the part of the Consumer Affairs Ministry to issue such contradictory and controversial advisory to the State governments.</span></div>
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<span lang="EN-IN" style="line-height: 16.1px;">Way back in 2003, the same Ministry of Consumer Affairs clarified to the Central Economic Intelligence Bureau, New Delhi over the letter of Wajahat Habibullah, secretary of Consumer Affairs which stated that his department was considering the issue of direct selling/network/multilevel marketing as an alternative form of marketing of goods and the entire issue was looked from that angle. It was further clarified that the Consumer Affairs letter does not cover pyramid structured marketing schemes and that area also does not fall within the purview of the department.</span><span style="line-height: 16.1px;"> </span></div>
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<span lang="EN-IN" style="line-height: 16.1px;">Earlier, answering to a question on December 20, 2002, in Lok Sabha on RBI action against Amway India, Minister of State in the Ministry of Finance and Company Affairs Shri Anandrao V Adsul stated that the RBI after once again examining the matter on the representation of Amway, had made it clear that the Amway’s activities attracted the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The minister also stated that the RBI had forwarded a report in this regard to the police authorities who are empowered under the Act for taking necessary action.</span></div>
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<span style="line-height: 16.1px;">A quick glance at the definition of money circulation scheme under the provisions of the Prize Chits And Money Circulation Schemes (Banning) Act, 1978 reveals:</span></div>
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<span style="line-height: 16.1px;">Section 2(c): “Money circulation scheme” means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the conservation for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.</span></div>
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<span style="line-height: 16.1px;">Section 10 of Act says that all offences under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 are cognizable offences. Cognizable offence means police have to initiate action without any complaint from victim or loser or any person.</span></div>
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<span lang="EN-IN">The Division Bench of the Andhra Pradesh High Court in 2007, held that f</span><span lang="EN-IN">rom the whole analysis of the Amway India’s business scheme and the way in which it is structured it is quite apparent that once a person gets into this scheme he will find it difficult to come out of the web and it becomes a vicious circle for him. In any event the petitioners have not specifically denied the turnover they are achieving and the income they are earning towards the initial enrollment of the distributors, the renewal subscription fee and the minimum sales being achieved by the distributors as alleged in the counter affidavit. By no means can it be said that the money which the first petitioner is earning is not the quick/easy money. By promising payment of commission on the business turned out by the down-line members sponsored either directly or indirectly by the up-line members (which constitutes an event or contingency relative to enrollment of members), the first petitioner is earning quick/easy money from its distributors, apart from ensuring its distributor earn quick/easy money. Thus the two ingredients are satisfied in the case of promoter too. We are, therefore, of the considered view that the scheme run by the petitioners squarely attracts the definition of “Money Circulation Scheme” as provided in Section 2(c) of the Act. (Para 35).</span></div>
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<span lang="EN-IN">The Supreme Court of India in the case of Kuriachan Chacko Vs. State of Kerala (2008) 8 SCC 708 held: “The Kerala High Court also upheld the argument of the prosecution that the Scheme was a "mathematical impossibility". The promoters of the Scheme very well knew that it is certain that the Scheme was impracticable and inworkable, making tall promises which the makers of the promises knew trully well that it could not work successfully. It could work for some time. These schemes are like "Paul can be robbed to pay Peter" but ultimately when there is a large mass of Peters, they will be left in the lurch without any remedy as they would by then have been deceived and deprived of their money. (para 41)”.</span></div>
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The High Court of AP in the case of Speak Asia online Vs. State of A.P. CRLP No.5626/2011 heldthat mere informing a scheme, which covered under the money circulation scheme and enrolling members as subscribers, itself is an offence. It is not necessary to further elaborate on the same, since the Sections are unambiguous and clearly indicate the acts which attract an offence.</div>
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When the Indian judiciary unequivocally held that enrollment of members attracts the provisions of the PCMC Act and Amway India has exactly been doing that in its business scheme, how the Ministry of Consumer Affairs could turn volte-face and issue advisory to the Statement governments and Union territories for framing guidelines for direct selling industry.</div>
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Moreover, the Andhra Pradesh State Government way back in 2008 issued GOMS No 178 restraining Amway India from publishing any material/advertisements containing such material connected with any Prize Chits and Money Circulation Scheme promoted or conducted in contravention of the provisions of the PCMCS Act. The GO also declared that every copy of the newspaper and every copy of the publication containing such material or the advertisement to be forfeited to the State government of Andhra Prade<a href="https://www.blogger.com/null" name="m_-1916130929842621647__GoBack"></a>sh.</div>
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The official websites of the police departments of Andhra Pradesh and Telangana States warned people not to join the schemes of Amway and others and lose their hard-earned money. The websites also warned people to report to the police in case they suffer any loss due to joining such schemes.</div>
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When the issue is crystal clear that the Amway India and other companies under the aegis of Indian Direct Selling Association are into the illegal activities, how the State government could frame guidelines as per the advisory of the Ministry of Consumer Affairs when Amway and other IDSA members are promoting illegal Money Circulation Schemes in the name of direct selling.</div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com8tag:blogger.com,1999:blog-2020300354268548128.post-63794954155568089442016-09-21T16:11:00.003+05:302016-09-21T16:11:26.134+05:30Ferreira rejected bail in QNet scam<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="color: #222222; font-family: Arial, sans-serif; font-size: 14pt;">New Delhi: Padma Bhushan Michael Ferreira, former world
Billiards champion is all set to be arrested after the Supreme Court on Wednesday
rejected Anticipatory Bail applications of all prime accused in the QNet scam.</span></div>
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<span style="color: #222222; font-family: "Arial","sans-serif"; font-size: 14.0pt;">The Supreme Court rejected the bail applications of five
including, Srinivas Rao Vanka and Magaral Veervalli Balaji, both directors of
Vihaan Directselling (India) Pvt Ltd, Suresh Thimiri, director of Transview
Enterprises India Pvt Ltd, Malcolm Nozer Desai, who is a 20 per cent
stakeholder in Vihaan and Michael Joseph Ferreira, former world champion of
billiards and an 80 per cent stakeholder in Vihaan.<o:p></o:p></span></div>
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<span style="color: #222222; font-family: "Arial","sans-serif"; font-size: 14.0pt;">Earlier the Bombay High Court had rejected the anticipatory bail
applications of all the accused calling the whole business of QNet as “prima facie
illegal business”.<o:p></o:p></span></div>
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<span style="color: #222222; font-family: "Arial","sans-serif"; font-size: 14.0pt;">The order mentioned, "The motto of the company 'sell more,
earn more' appears very attractive and innocuous. However, this motto is fully
camouflaged. The company stands on a basic statement that people can be fooled.
Thus, the true motto is 'sell more earn more' by fooling people. In fact it is
a chain where a person is fooled and then he is trained to fool others to earn
money. For that purpose, workshops are conducted where study and business
material is provided with a jugglery of words, promises and dreams. Thus, the
deceit and fraud is camouflaged under the name of e-¬marketing and
business."<o:p></o:p></span></div>
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<span style="color: #222222; font-family: "Arial","sans-serif"; font-size: 14.0pt;">"It has very grave and serious impact on the economic
status and mental health of the people on a large scale. On considering
parameters of the Section 438 of the Code of Criminal Procedure, I am not
inclined to protect the accused. It won't be out of place to mention that such
circulation is required to be stopped. It is necessary for the prosecution to
take injunctive steps against this business activity, which is prima facie,
illegal.”<o:p></o:p></span></div>
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<span style="color: #222222; font-family: "Arial","sans-serif"; font-size: 14.0pt;">“The Serious Frauds Investigation Office had termed the whole
business of the QI Group in India as a threat to the national security,” said
the whistle blower, Gurupreet Anand, who submitted the SFIO report in Bombay
High Court as well as the Supreme Court of India along with other documents.<o:p></o:p></span></div>
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<span style="color: #222222; font-family: "Arial","sans-serif"; font-size: 14.0pt;">A detailed Status Report was filed by Special Public Prosecutor
Pradeep Gharat and after going through the contents of the said report the anticipatory
bail applications of all the prime accused was forthwith rejected. Agencies<o:p></o:p></span></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com0tag:blogger.com,1999:blog-2020300354268548128.post-76951249656352052722016-09-19T19:18:00.004+05:302016-09-30T19:38:25.535+05:30Ministry of Consumer Affairs nails Amway with guidelines<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "calibri" , sans-serif; font-size: large;">The Ministry of Consumers Affairs has
taken a right decision in preparing an advisory issuing the model framework to
prepare guidelines by the State governments and Union Territories to expose the
illegal activities of the direct selling companies which are in fact indulging
in illegal money circulation schemes in the guise of selling products and
services. It exposed the true colours of the direct selling companies in
general and Amway in particular. With the help of the model framework, now it
is easier to pinpoint the illegal activities of these companies.</span></div>
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<span style="font-family: "calibri" , sans-serif; font-size: large;">It has prohibited entry
fee/registration fee charged by the companies to enroll members and also
collection of renewal fee every year. It may be recalled that the AP High Court
pointed out that the Amway has been illegally lining its pockets by charging
registration fee and renewal fee from the members which is nothing but easy and
quick money. Though the new set of guidelines is almost similar to the
guidelines issued earlier, there are only thin differences.</span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">The pyramid scheme is clearly defined
in the model framework. Moreover, it prohibits compulsion of these companies to
purchase huge quantities of goods which is detriment to the interest of the
consumers. These companies encourage the members to stock in large
quantities offering commission of 40 per cent or more. They are also compelled
to take back the products if the consumer is dissatisfied. However, it should
have been made clear that the companies should directly take back the products
instead of the present practice of returning through the upline members.<o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">The companies also need to provide a
grievance redressal mechanism to solve the grievances in a time-bound manner.
In view of the framework, it would be easier for the aggrieved consumers to file
criminal cases against these fraudulent direct selling companies. <o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">Some members, who are very senior in
the upline, claim huge income after selling products. In fact, they do not pay
any sales tax to the commercial tax department. With the condition of
compulsory of PAN, they would be compelled to disclose their income if at all
they get. Most of the income they claim is on the products purchased by the
downline members as if they actually sold them. Now they cannot escape the tax
liability. It may be noted here that the Supreme Court held that the income from the purchase of downline members is also easy and quick money. <o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">Some direct selling companies are
euphoric over the framework issued by the Ministry of Consumers Affairs. In
fact, this is only the model framework as an advisory to the State governments
and Union territories to prepare guidelines in their respective states and union territories. Whenever there is a clash between the guidelines and the
legislation, it is not necessary to mention that the legislation prevails over
the guidelines. Even the state governments form guidelines, the Kerala
experience would recur if the guidelines were ignored by these companies. These
companies cannot do business without misrepresenting the facts to the new
members and naturally they would come under fire. <o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif;"><span style="font-size: large;">The big loss to these companies would
be removal of entry fee and renewal fee. This is the main source of income particularly
where these companies make easy and quick money. </span><o:p></o:p></span></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com3tag:blogger.com,1999:blog-2020300354268548128.post-60601024856924848162016-09-19T19:18:00.002+05:302016-09-19T19:20:33.683+05:30Ministry of Consumer Affairs nails Amway with guidelines<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">The Ministry of Consumers Affairs has
taken a right decision in preparing an advisory issuing the model framework to
prepare guidelines by the State governments and Union Territories to expose the
illegal activities of the direct selling companies which are in fact indulging
in illegal money circulation schemes in the guise of selling products and
services. It exposed the true colours of the direct selling companies in
general and Amway in particular. With the help of the model framework, now it
is easier to pinpoint the illegal activities of these companies.</span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">It has prohibited entry
fee/registration fee charged by the companies to enroll members and also
collection of renewal fee every year. It may be recalled that the AP High Court
pointed out that the Amway has been illegally lining its pockets by charging
registration fee and renewal fee from the members which is nothing but easy and
quick money. Though the new set of guidelines is almost similar to the
guidelines issued earlier, there are only thin differences.</span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">The pyramid scheme is clearly defined
in the model framework. Moreover, it prohibits compulsion of these companies to
purchase huge quantities of goods which is detriment to the interest of the
consumers. These companies encourage the members to stock in large
quantities offering commission of 40 per cent or more. They are also compelled
to take back the products if the consumer is dissatisfied. However, it should
have been made clear that the companies should directly take back the products
instead of the present practice of returning through the upline members.<o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">The companies also need to provide a
grievance redressal mechanism to solve the grievances in a time-bound manner.
In view of the framework, it would be easier for the aggrieved consumers to file
criminal cases against these fraudulent direct selling companies. <o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">Some members, who are very senior in
the upline, claim huge income after selling products. In fact, they do not pay
any sales tax to the commercial tax department. With the condition of
compulsory of PAN, they would be compelled to disclose their income if at all
they get. Most of the income they claim is on the products purchased by the
downline members as if they actually sold them. Now they cannot escape the tax
liability. It may be noted here that the Supreme Court held that the income from the purchase of downline members is also easy and quick money. <o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif; font-size: large;">Some direct selling companies are
euphoric over the framework issued by the Ministry of Consumers Affairs. In
fact, this is only the model framework as an advisory to the State governments
and Union territories to prepare guidelines in their respective states and union territories. Whenever there is a clash between the guidelines and the
legislation, it is not necessary to mention that the legislation prevails over
the guidelines. Even the state governments form guidelines, the Kerala
experience would recur if the guidelines were ignored by these companies. These
companies cannot do business without misrepresenting the facts to the new
members and naturally they would come under fire. <o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<span style="font-family: "calibri" , sans-serif;"><span style="font-size: large;">The big loss to these companies would
be removal of entry fee and renewal fee. This is the main source of income particularly
where these companies make easy and quick money. </span><o:p></o:p></span></div>
<div style="background: white; margin-bottom: 10.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in;">
<br /></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com1tag:blogger.com,1999:blog-2020300354268548128.post-17779939631033869082016-07-28T17:23:00.002+05:302016-07-28T17:23:28.187+05:30Kingpin of ‘Crypto mining scam’ arrested<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="color: #222222; font-family: Times New Roman, serif;"><span style="font-size: 18.6667px;">Here is yet another multilevel marketing scam which shocked the authorities and the police alike. The crooks started 3Gcoin with the promise of easy and quick money. Finally the kingpin of the scam was arrested.</span></span></div>
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<span style="color: #222222; font-family: 'Times New Roman', serif; font-size: 14pt;">The
kingpin involved in the scam of ‘3gcoin,’ a multi-level marketing company
involved in crypto mining (digital currency), was arrested from Bengaluru and
produced in a city Court on July 27. A case was registered under various
provisions of IPC and IT Act and the police took up investigation.</span></div>
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<span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">According to the Cyber Crime police of
Cyberabad, the accused, B M Jagadeesha, cheated people to the tune of Rs 2.89
crore during the last two years. Jagadeesha is the head of operations for the
company </span><a href="http://www.3gcoin.eu/" target="_blank"><i><span lang="EN-IN" style="color: #1155cc; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-bidi-font-size: 11.0pt; mso-fareast-font-family: "Times New Roman"; text-decoration: none; text-underline: none;">www.3gcoin.eu</span></i></a><span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-bidi-font-size: 11.0pt; mso-fareast-font-family: "Times New Roman";"> which
is </span><span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">registered
in Europe lured gullible IT employees interested in crypto mining. They
promised to provide huge profits upon investment. The modus operandi involved
active involvement of 500 agents, working on commission basis.</span><span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-bidi-font-size: 11.0pt; mso-fareast-font-family: "Times New Roman";"> </span><span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">The person who introduced the members will get 20 per cent of 30 Euros as commission. The accused promised
them that the introducer would continuously get the commission on each
introduction. He has collected Rs 2,89,12,500 from one group most of which was
distributed as commission to agents. <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white;">
<span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">At the time of launching the company,
they have declared that the value of each Crypto Coin was 30 Euros. They have
projected the investors that if they take one crypto coin by investing 30 Euros
they would get 128 crypto coins at the end of the second year of investment.</span><span style="color: #222222; font-family: "Times New Roman","serif"; font-size: 7.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="background: white;">
<span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">During the investigation it also came to
light that there are several other similar websites such as wowcoin, onecoin,
richcoin, litcoin, which are involved in similar businesses online. “Hence,
it is advised to study about the operations of such companies before investing
their hard earned money,” said Md Riyazuddin, Inspector, Cyber Crimes
(Cyberabad East), who led the team to Bengaluru.</span><span style="color: #222222; font-family: "Times New Roman","serif"; font-size: 7.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white;">
<span lang="EN-IN" style="color: #222222; font-family: "Times New Roman","serif"; font-size: 14.0pt; mso-ansi-language: EN-IN; mso-fareast-font-family: "Times New Roman";">Corporate Frauds Watch appeals to the people from all over the world not to fall prey to the dubious promises of multilevel marketing companies like Amway. Herbalife, Tupperware which are followed by the crooks like 3gcoin and others.</span></div>
</div>
Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com5tag:blogger.com,1999:blog-2020300354268548128.post-55697603533637364872016-06-16T22:26:00.000+05:302016-06-16T22:27:58.173+05:30Will Amway compensate medical & hospital expenses<div dir="ltr" style="text-align: left;" trbidi="on">
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<a data-saferedirecturl="https://www.google.com/url?hl=en&q=https://www.blogger.com/profile/04151982592556532988&source=gmail&ust=1466182416872000&usg=AFQjCNG3kqbHYVea8JXeJrUrd7R20Ws7CA" href="https://www.blogger.com/profile/04151982592556532988" style="color: #1155cc;" target="_blank">RAJAN</a> leaves <span style="font-size: 12.8px;">a new comment "</span><a data-saferedirecturl="https://www.google.com/url?hl=en&q=http://corporatefraudswatch.blogspot.com/2012/07/amway-is-selling-nutrilite-as-medicine.html&source=gmail&ust=1466182416872000&usg=AFQjCNEHEPonNEwdfahYiPBAAf2ByIVCZA" href="http://corporatefraudswatch.blogspot.com/2012/07/amway-is-selling-nutrilite-as-medicine.html" style="color: #1155cc; font-size: 12.8px;" target="_blank">Amway is selling Nutrilite as medicine</a><span style="font-size: 12.8px;">":</span><br />
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I started using AMWAY's Protein Powder, Calcium, Vitamins & few other products in Feb. Mar. 2014. After using for 2 months or so, I used to feel unusually weak & extremely tired. So I discontinued with these. But weakness persisted even after that. Later in Apr. 2014 I had internal bleeding, which somehow I could not recognize at that time & hence I neglected it. I pulled on like this till Nov. 2014 when I happened to do Blood test along with few other Medical tests, I found My Platelets to be alarmingly low - 20,000 ( it went down to 6000 - 4000 level later on ).</div>
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Earlier in Jan. 2014, My Platelets were around 1,02,000, as per my medical check up. I never had any disease of any nature earlier so as to bring down my Platelets to this level & that too at such a short period of time. Even Doctors opined that the Food Supplements as these can do harm, particularly blood related. Friends & relatives told me that there are several news items & articles appearing in the News Papers & in the Internet stating that the Food Supplements are capable of reducing one's platelet levels.</div>
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It took almost an year & a half for me to recover from this dreadful disease. The sufferings & agony underwent by me is beyond one's imagination. Total medical & hospital expenses are around 4 lakh. Will AMWAY Compensate this to me. Is it possible for AMWAY to compensate the sufferings & agony underwent by me. I am not the only one to have such a Bad experience as this. Many are there, but they either do not realise this Or they do not report their complaints. As regards the other products other than Nutrilites, I feel they are too costly, which I demonstrated to my near & dear. </div>
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Use of natural ingredients in its natural way as prescribed in Ayurveda is the best solution for all health & skin care issues. </div>
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Be Indian Buy Indian. </div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com3tag:blogger.com,1999:blog-2020300354268548128.post-10795996845536768682016-03-09T18:34:00.003+05:302016-03-09T18:34:23.220+05:30Herbalife's And Other MLMs' 2015 Data Show Their Growth Era Has Ended<div dir="ltr" style="text-align: left;" trbidi="on">
<h3 class="post-title entry-title" itemprop="name" style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 22px; font-stretch: normal; font-weight: normal; margin: 0.75em 0px 0px; position: relative;">
Robert FitzPatrick shows 'MLM' growth is finished.</h3>
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<div class="post-body entry-content" id="post-body-2612140395063075545" itemprop="description articleBody" style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13.2px; line-height: 1.4; position: relative; width: 660px;">
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<h2 class="title sum" style="box-sizing: border-box; color: inherit; font-family: inherit; font-size: 16px; font-stretch: normal; line-height: normal; margin: 0px 0px 10px; position: relative;">
<span style="color: inherit; font-family: inherit;">Summary</span></h2>
<div class="a-sum" itemprop="description" style="box-sizing: border-box; margin: 0px 0px 25px 20px; padding-left: 20px;">
<div style="box-sizing: border-box; display: list-item; list-style: disc outside none; margin-bottom: 15px;">
Apart from fraud charges, the global performance of Herbalife and other large MLMs shows their era of "growth" is over. The change is not cyclical, but inevitable and irreversible.</div>
<div style="box-sizing: border-box; display: list-item; list-style: disc outside none; margin-bottom: 15px;">
Growth in MLM is not real. It relies on new geography. There is no sustained base of brand loyalists or successful salespeople.</div>
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For individual recruits, MLM "growth" from recruiting is a requirement. No one profits by personal "direct selling."</div>
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While expansion is always promised, data now show contraction, revealing to regulators and investors MLMs inherent flaw and its basis in deception.</div>
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Herbalife, Nu Skin and Usana illustrate the reality of saturation. All depend now on China and other new markets, the proverbial "last ones in." China "growth" is ending.</div>
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Using global and domestic SEC-reported data, I have previously published articles tracking and evaluating the "growth" and "saturation" status of the commercial sector known as "multi-level marketing", MLM.</div>
<div class="p p1" style="box-sizing: border-box; margin-bottom: 15px;">
Recently released data from Herbalife (NYSE:<a href="http://seekingalpha.com/symbol/HLF" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;" title="Herbalife Ltd.">HLF</a>) most clearly illustrate the new reality of the end of the MLM "growth" era, and this nothing to do with the recent controversies of fraud charges against Herbalife.</div>
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The MLM sector includes global companies, Herbalife (<a href="http://seekingalpha.com/symbol/HLF" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;" title="Herbalife Ltd.">HLF</a>), Nu Skin (NYSE:<a href="http://seekingalpha.com/symbol/NUS" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;" title="Nu Skin Enterprises Inc.">NUS</a>), Usana (NYSE:<a href="http://seekingalpha.com/symbol/USNA" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;" title="USANA Health Sciences Inc.">USNA</a>) and Avon (NYSE:<a href="http://seekingalpha.com/symbol/AVP" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;" title="Avon Products, Inc.">AVP</a>), among about 10 others on Wall Street. Its largest private representative is Amway, the progenitor of all current MLMs. Avon predates Amway as a company but adopted the Amway-model only after 2000, and only partially. There are now perhaps over 1,000 MLMs in the USA!</div>
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Wall Street Acceptance of MLM, Pyramid Scheme or Not</h2>
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After years of confusion on Wall Street, it is now widely accepted that "MLM" is a distinct sector, though its definition and legal status are still contested. It is widely understood that, whatever MLM is, the common denominator of the sector is a shared commodity of human recruits who operate under essentially identical legal contracts, unique to MLM and who serve as the direct and ultimate source of almost all revenue. This common revenue source is gained by inducing the recruits to seek financial rewards tied to the hallmark MLM "business opportunity." This shared and virtually identical "business opportunity" offered by all MLMs always depends upon recruits recruiting other new recruits in a classic "endless chain" proposition.</div>
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In putting all MLMs together under one sector, it is implicitly understood that the various consumer products offered for sale and their unadvertised brands do not characterize or define individual MLMs. The various products (usually pills, potions and lotions) are merely incidental elements of the shared recruiting and money transfer mechanism. As to the legitimacy of MLM'sdefining pay-to-play, contractor-recruiting-contractor, endless-chain model, Wall Street generally embraces it but presumably only as long it continues to "grow."</div>
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For a full economic and philosophical endorsement of the MLM business model see the booklet by a Dr. Lasdwun Luzes who boldly lays out the case, <em style="box-sizing: border-box;"><a href="http://www.amazon.com/Defense-Pyramid-Scheme-Lasdwun-Luzes-ebook/dp/B00HYONUVQ" rel="nofollow" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;">In Defense of the Pyramid Scheme</a></em>.</div>
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The Party is Over</h2>
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I will publish a comprehensive summary of 5 years of data of publicly traded MLMs, from year-end 2010 with analysis of the demographic and information saturation factors when SEC reports are available. However, 2015 data already reported by several of the largest MLMs support my earlier analysis that the heyday of MLM is finished, never to return. There will never be another MLM ballooning to the size that some of today's MLMs reached a few years ago. This 35-year MLM pandemic occurred while the FTC deliberately ignored it or administratively dithered over arcane definitions of "pyramid scheme" and some FTC officials strolled through the lucrative revolving door between the FTC and the MLM "industry."</div>
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Free from law enforcement, MLM's recruiting rampage carried this American racket to every corner of the globe, with China as the last stop. Now, in the face of global saturation, based on growing public awareness and demographic limits, the larger MLMs can no longer claim "momentum" and "explosive" growth to lure in recruits. The current challenge of these companies today is to manage unfolding collapse while still promising "unlimited income" to new recruits.</div>
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<li style="box-sizing: border-box; margin: 0px 0px 12px; padding: 0px;">Amway, the oldest MLM with the longest global reach, reports (unverified, since it is a private firm) its global revenue has recently <a href="http://www.mlive.com/business/west-michigan/index.ssf/2016/02/amways_2015_revenues_fall_to_l.html" rel="nofollow" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;">dropped to its lowest point in 5 years</a>. The decline appears to be accelerating, moving from minus 8% in 2014 to minus 12% in 2015. Much of the decline occurred, Amway claims, in China, which had accounted for the previous spike.</li>
<li style="box-sizing: border-box; margin: 0px 0px 12px; padding: 0px;">Avon, the MLM with the largest number of members, suffered a 34% revenue drop since 2010 (including North America revenues in 2015) and has just sold off its entire North American operation, where the company began over a hundred years ago.MLMs classically saturate earlier markets, requiring constant expansion for "growth."</li>
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Investors who still hearken to MLM's historic and enigmatic "growth" rates, even in the middle of global recession, should take note that this recent reversal of fortune is not cyclical but inevitable and irreversible.</div>
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Growth, Quote UnQuote</h2>
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"Growth," as it is conventionally understood, must be put in quotes when referencing MLM because MLMs misuse the term to confuse consumers and investors as part of an entire vocabulary of pseudo-business terms and phrases, including the meaningless term, "multi-level marketing" itself ("multi" actually means <em style="box-sizing: border-box;">infinite</em>).</div>
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I see firsthand how effective this linguistic flim-flam has been in sowing confusion from talking with countless MLM participants, providing professional consulting to dozens of Wall Street analysts on MLM, and being interviewed by journalists assigned to report on this or that MLM stirring up local discontent across the world. Consumers cannot discern the indecipherable MLM play plan and are not told of MLM's epic turnover rates among recruits. Without a good grasp of algebra few can untangle the misleading "income disclosures" - among the few MLMs that offer them at all - revealing 99% loss rates. Aiding and betting the concealment and NewSpeak, the FTC specifically exempted MLMs from all financial disclosure requirements as they solicit investments from millions of people each year.</div>
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Explaining the Unexplainable</h2>
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Wall Street researchers, charged with due diligence on behalf of investor groups, earnestly try to apply conventional metrics to MLM in the naïve belief that MLMs compete and grow like real companies. They imagine MLMs gaining customers from competitors with similar products or creating new markets that add to an existing year-upon-year base of brand loyalists. They further imagine that new customers are won over by profitable salespeople who sell products based on market factors like pricing, quality, technology advantage or some valuable differentiation, resulting in profit to them and "growth" to the MLM enterprise.</div>
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Yet, these researchers are invariably flummoxed to explain a seemingly inexplicable factor that contradicts their "sales" thesis. This is the extraordinary attrition among adherents, reaching virtually 100% in several years. After signing contracts and paying fees, why would salespeople or even customers abandon a "growing" company with loyal buyers in such numbers and so rapidly? To reconcile the mysterious phenomenon, they bravely search for <em style="box-sizing: border-box;">other</em> market-based factors like variations in start-up fees.</div>
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For investor purposes, analysts do their best to exclude deception and fraud as factors. They must do this in the face of otherwise inexplicable consumer behavior, massive consumer loss rates, cult marketing techniques by MLMs and continuous churning of what they define as "salespeople" and "customers" without being able to determine exactly who is selling to whom or what the real products are.</div>
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In reality, none of these market-based factors applies or has anything to do with growth or decline in MLM. Quitting rates turn out to be the same across the board, having nothing to do rational buying, fee levels, or diligent investing. Indeed, conscious buying or investing "choice" is<em style="box-sizing: border-box;">impossible</em> in MLM since no one is ever fully or adequately informed when recruited. MLMs sell a<em style="box-sizing: border-box;">non-existent</em> income opportunity. Therefore, conventional sales and marketing laws and definitions that govern real commerce, in which actual value is exchanged, do not apply.</div>
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Non-existent Opportunity</h2>
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In describing the marketed MLM "income opportunity", I call it "non-existent" not editorially but based on a tedious analysis of the bizarre MLM pay formulas that transfer most commission dollars, per transaction, to the top of an enormous recruiting chain, and impose burdensome pay-to-play purchase requirements on new recruits, serving as the chief revenue source. My description is further supported by de-constructing the available income disclosures that reveal 99% loss rates among all MLM adherents, year in and year out, including those who pay the much higher fees to start out at higher potential pay rates.</div>
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Take the Test</h2>
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Here's a test, requiring only arithmetic, that should settle all question about the existence or absence of an MLM "income opportunity." Take any of the larger MLMs and add together <em style="box-sizing: border-box;">all the people that have ever paid money to become eligible for the fabled "income opportunity", dating from the company's inception</em>, and then ask how many or what percentage of all of them ever did earn a profit or are gaining it now. No one does this in the media or on Wall Street, perhaps because the answer would be too shocking to accept. Hundreds of millions of people, over three decades were obviously churned through a mill of false income promise only to "fail." Even those the MLMs claim are only "discount buyers" universally disappeared. A tiny cadre of recruiters at the top profit directly from those losses, year in and year out. Yet, millions more are still successfully recruited? The specter of commercial deception on such a scale, while the FTC looks on, is literally unthinkable for some analysts and reporters, much less ordinary consumers.</div>
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Not Growth</h2>
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Referring to growth, I employ the phrase, "as it is conventionally understood," because MLMs do not grow according to how that term is conventionally used in business. MLMs that "grow" are only outpacing attrition each year. There is no large base of salespeople or customers upon which to "grow." There are no loyal or repeat customers of any consequence. Only if recruiting outpaces attrition, can revenues be larger YOY. The sales force and the customers did not grow. They were <em style="box-sizing: border-box;">replaced</em>. Collapse occurred more slowly than recruiting accelerated, and the scheme was thus able to give an outward appearance of organic growth, unless one looks more closely. Real growth requires success and satisfaction of earlier buyers and salespeople. MLMs, however, leave almost total failure, abandonment and disappointment in their wake.</div>
<h2 class="p p5" style="box-sizing: border-box; color: inherit; font-family: inherit; font-size: 16px; margin: 20px 0px 10px; position: relative;">
The Meaning of No-Growth in MLM</h2>
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Before citing more of the available company data and their significance, it is important to consider the meaning of MLM's recently arrived at "no-growth" status from the consumer' interests, not just the investors'. A no-growth conventional company can obviously remain profitable and valuable to customers. However, in MLM, growth is not a market condition; it is a promise on which value-for-payment-received is based. It is therefore an <em style="box-sizing: border-box;">existential requirement</em>. But, without capacity for outpacing collapse, MLMs now have no basis at all for claiming that new recruits have a chance at success and therefore cannot plausibly pretend to offer value in exchange for payment.</div>
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Let us be clear in recognizing that <em style="box-sizing: border-box;">individual</em> success in all MLMs is not based on personal sales or "direct selling" as it is called. In 15 years of work in MLM, I have not found an individual who earned sustainable profit without recruiting other recruiters. No one in MLM has or does gain sustainable profit from individual door-to-door selling, an outmoded and unnecessary method of product distribution. Add in absurdly high prices, an upside-down commission plan that rewards the recruiter and oppresses the street-level retailer, unprotected territories, constant inundation of competitive salespeople, no advertising allowed, punishing inventory purchase requirements, and the MLM "direct selling" business is revealed as an utter sham.</div>
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MLM "growth" is not an added benefit but a <em style="box-sizing: border-box;">requirement</em>, since 50-80% of the entire sales force and customer base (for the most part, one and the same) disappear annually and the <em style="box-sizing: border-box;">remaining market shrinks.</em> Yet, for any significant number of new recruits to succeed, the overall chain <em style="box-sizing: border-box;">must get larger and longer</em>. It is this contradiction that leads to the conclusion of many experts that the business model is "inherently" unsustainable and deceptive. An MLM enterprise can thrive only on the <em style="box-sizing: border-box;">failure</em> of its churning and "losing" adherents.</div>
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Mimicking Growth</h2>
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Up to recent times, geographic expansion and brief periods of local increases in prospects, usually brought on by economic distress, could at least mimic sustainable growth or perhaps support the claim that recruiting could <em style="box-sizing: border-box;">always</em>outpace attrition, giving some recruits a chance to "win" though at the expense of <em style="box-sizing: border-box;">their</em> recruits. But, if revenue records show local and global<em style="box-sizing: border-box;">contraction</em>, on what basis can the MLM company base even a bogus promise to the "last ones in" of viable profit opportunity based on "infinite" recruiting?</div>
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Properly understood, the new status of no-growth-due-to-saturation lays bare the realities of MLM for regulators and investors who might still be charmed by MLM's <em style="box-sizing: border-box;">historic</em> "growth", promises of <em style="box-sizing: border-box;">perpetual</em> growth or the newest predictions of <em style="box-sizing: border-box;">return</em> to growth.</div>
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Nu Skin: Pop and Drop</h2>
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It has already been shown that MLM's greatest icons, Amway and Avon, have experienced dramatic drops in revenue recently. Nu Skin, also one of the larger and older MLMs, serves as a further illustration of the trends in maturity and reveals "growth" as merely a reflection of the "last ones in."<img align="right" data-height="185" data-twitter-card-image-dims="0" data-width="240" hspace="6" src="https://blogger.googleusercontent.com/img/proxy/AVvXsEjZL_ro3zxmqKeCc1UuJEZD7sSdQP5lMOQC_0a-uw6ZwapjFoThP60-2K7aIzci9LjR5geETGnd5y6jlR4LDPrngMNxtVCotF9Pitn3_FXnVrkK79wR7sV82x4lC8Yv_1tH3Qk7OoSM_p4BB9S6HaxTEETfFdNE6MiP-PinNMU8juSjgdbMSAU5UbhAgbJLNsKHr4G-KgsU2DUL=s0-d-e1-ft" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; box-sizing: border-box; margin: 10px; max-width: 100%; padding: 5px; vertical-align: middle;" vspace="6" /></div>
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Nu Skin's China "growth" exploded almost 400% between 2012 and 2013, catapulting China to Nu Skin's largest market and accounting for 32% of total revenues. Then in just two years, revenue was nearly cut in half. Between 2013 and 2015, Nu Skin's global revenue dropped by $929.7 million. The drop in one market, China, accounted for about half of that global drop.</div>
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Usana: Chasing Nu Skin</h2>
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Usana is a commercial clone of Nu Skin, both enterprises coming out of Utah, that font of MLM startups and "food supplements." In saturation status it is only a year or so behind Nu Skin before hitting the China Wall. Extreme slowdown has already been reached.</div>
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Consider the drastic change in rates reflected in language in the end of Q4 8Ks of 2014 and 2015. In 2014, Usana trumpeted net sales growth in Asia Pacific (including mainland China) of 34.1% compared to same period a year before. It also added that it achieved a 25.4% "sequential" increase over the 3rd quarter of that year. This is the classic MLM "exponential" growth achieved with mesmerizing and illusory endless chain incentives offered to virgin recruits in newly invaded territories. A year later, there is no bragging of a sequential increase. It had dropped to just over 2% and annual "growth" for the quarter was just 5.4% over the same period a year ago.</div>
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Between 2013 and 2015, Usana "grew" by $200.5 million globally, now edging close to a billion in total revenue. But during this same time frame, it "grew" in Greater China by $169.47. China, a market that Usana only recently entered, accounted for 85% of Usana's global "growth" in the 2013-2015 period. It opened in mainland China with an entirely new line of goods from a small, obscure China-based company selling "baby" products in a country that limits families to one child! Yet, with a new product, in a new land, Usana reports that Greater China is now approximately half the company's total global revenue! Breaking it down even closer, reveals thatUsana is dropping in the areas of Greater China where it entered first, like Hong Kong. Go figure.</div>
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Analysts may deduce that all the rest of the world, accounted for only 15% of Usana's "growth" in the last two years. Excluding Greater China, Usana grew just 4% in the last two years. China, the "last ones in", sustained the company and enabled it to tell hopeful recruits in all other countries that it was explosively "growing", though in many places, even its home country, the USA, it was actually in contraction. Unless you have cousins in China, the actual data showed that the chance of your building a large local downline based on friends and family, ignoring the financial consequences to them, was bleak indeed.</div>
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Usana USA "Growth" Obscured?</h2>
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Analysts that question the sustainability of Usana's earlier rocket-like growth (almost entirely in China, it turns out) might want to know of Usana's performance in the USA, where it all started. Shouldn't this be the strongest area, where it is best known, faces no currency "headwind" and should have the largest base of satisfied adherents over more than 20 years of operation?</div>
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This is a question I have special interest in since "saturation" in MLMs occurs in earlier markets where demographics and actual failure rates finally take their toll. It turns out that Usana makes it difficult to know for sure USA revenue and recruiting status. Is the "drop" concealed while the "pop" is touted?</div>
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<img data-height="64" data-twitter-card-image-dims="0" data-width="548" src="https://blogger.googleusercontent.com/img/proxy/AVvXsEjsOeBebZwH7WpAO6l73tRIqyF6DYm2e6JGDVc9su7qyKa8IUIBiAHGJWwhvOWt93an5uZHWlph6_7CbAjlexZseRzFp5zgf7mlsLFYTrOnbgdZCQiPBvLv_JekOYsHb69IEof-sHSraOMuM9CxLTulCz2ry26kuarcZxSFnlrY21omINh3Ig1x_6b_7Uly6m51vSviStr-=s0-d-e1-ft" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; box-sizing: border-box; margin: 10px; max-width: 100%; padding: 5px; vertical-align: middle;" /></div>
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The reported data does show steady but modest declines in the USA revenue, -10%, while mainland China grew +332%, but, incredibly, Usana has confused the definition of "USA." In 2000, Usana began merging parts of Europe's data with the USA's.</div>
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From Usana's <a href="http://idc.api.edgar-online.com/efx_dll/edgarpro.dll?FetchFilingConvPDF1?SessionID=yighebWFlQ540aS&ID=430152" rel="nofollow" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;">Q-2, 2000</a>, "<em style="box-sizing: border-box;">Since the beginning of the second quarter of 2000, the Company's United Kingdom market has been serviced from the United States and Is no longer an operating segment of the company. The company's operating segments are based on operating geographic regions.</em>" Usana reported in Q1 2012: "<em style="box-sizing: border-box;">North America - United States (including direct sales from the United States to the United Kingdom and the Netherlands), Canada, Mexico, France(1), and Belgium(1) … The Company commenced operations in France and Belgium during the last week of the first quarter of 2012. Net sales and customer count information for these two markets have been included with the United States for the quarter ended March 31, 2012.</em>"</div>
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Say what? Europe is counted with North America for net sales and customer count? And Usanais adding new countries in Europe, making "North America" an expanding market?</div>
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The seemingly modest and gradual decreases in the "USA" that Usana reported to the SEC are contradicted by Usana's income disclosure reports to consumers, not to the SEC. These disclosures are based only on the real North America, not a fictional one presented to shareholders and the SEC. In its North American <a href="https://www.usana.com/media/File/Prospecting" rel="nofollow" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;">Average Total Earnings for 2011</a> the total of USA Associates that purchased at least one product (active) was reported as 135,590.</div>
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Then, when Usana updated this USA data disclosure with <a href="https://www.usana.com/static/images/na/Training/ComplianceCorner/AveIncome-US-EN.pdf" rel="nofollow" style="background-color: transparent; box-sizing: border-box; color: #024999; outline: 0px; text-decoration: none;">2014 data</a>, only for geographic North America, Usana reports only 61,400 associates qualified as active by making one purchase. That's a 54.7% domestic decline in three years. Shareholders seeking insight into Usana'sfuture, especially its future in "explosive China" may want to know exactly how Usana is doing in the 50 states of the USA, really. It is the harbinger for China.</div>
<h2 class="p p9" style="box-sizing: border-box; color: inherit; font-family: inherit; font-size: 16px; margin: 20px 0px 10px; position: relative;">
Herbalife: China and Latinos Sustain the Illusion of "Growth"</h2>
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Herbalife came into being two years after a controversial FTC decision reversed earlier rulings against MLMs and allowed Amway's pyramid plan to continue, based on its sworn testimony that it was a retail sales company, not a recruiting scheme. Herbalife cloned the Amway play plan and after 20 years of operation, Herbalife entered the China market in 2001, one of the earlierMLMs to go there.</div>
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Now, after just 14 years in China, revenue from that country is almost entirely sustaining Herbalife, offsetting saturation in most of the rest of the world, including the USA, its home market.</div>
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<li style="box-sizing: border-box; margin: 0px 0px 12px; padding: 0px;">Between 2013 and 2015, Herbalife declined in global revenue by $142 million. But in the same period revenue "grew" in China by $370.9 million. Excepting for increases in China, Herbalife's global revenue would have dropped over 9% in the last two years instead of -0.34%. As with Amway, Nu Skin and Usana, China is Herbalife's "last ones in," keeping afloat any claim at all for "growth."</li>
<li style="box-sizing: border-box; margin: 0px 0px 12px; padding: 0px;">In the last five years, Herbalife's reported annual revenue increased by $1.7 billion. 38% of that "growth" occurred in mainland China alone and at the same time, Herbalife entered 16 other new countries, adding to the "growth." Without geographic expansion,Herbalife's is in significant decline, but it is now running out of new countries.</li>
<li style="box-sizing: border-box; margin: 0px 0px 12px; padding: 0px;">Between the end of 2012, when scrutiny was focused on Herbalife by the Pershing Square fraud thesis presentation, global revenue "grew" by $397.7 million, while China alone grew by $567.7 million. If you take out the China "growth", (increase in China only) during these three years of controversy, Herbalife global revenue, would show a negative 4%. Even with China and other new countries entered, Herbalife still showed global revenue decline in the last two years.</li>
<li style="box-sizing: border-box; margin: 0px 0px 12px; padding: 0px;">If globally Herbalife is dependent on China, in the USA, it is clinging to the lifeline of Latino immigrants, a virtually new country it invaded <em style="box-sizing: border-box;">inside the USA</em> to offset information and demographic saturation among the rest of the population. Yet, despite this new base of vulnerable recruits, revenue declined in the USA over the last two years after spiking upon a massive and customized recruiting campaign aimed at low income Latinos and other new immigrants.</li>
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Robert FitzPatrick (copyright 2016)</div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com0tag:blogger.com,1999:blog-2020300354268548128.post-87779861455391126712016-03-02T23:21:00.001+05:302016-03-02T23:21:15.890+05:30Serious Fraud Investigation Office asked to probe fraud by 258 companies in last 4year: Government<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">NEW DELHI: Serious Fraud Investigation </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Office (SFIO) has been ordered to probe </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">alleged fraud in 258 companies in the last </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">four years, Parliament was informed.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Of the 258 cases, investigations have been </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">completed in 116 cases and reports have </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">been submitted in this regard to the </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">ministry while in 8 cases, probe have been </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">stayed by the courts, Corporate Affairs</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Minister Arun Jaitley informed Lok Sabha in </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">a written reply.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Further, the ministry has ordered filing of prosecution against companies, directors and </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">other officers for several noncompliance under the Companies Act as recommended in </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">the investigation report in 102 cases, where the probe has been completed. </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">SFIO is the investigation arm of the Corporate Affairs Ministry. </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">"From 201213 and up to January 31, 2016, the ministry has ordered investigations </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">through SFIO into the affairs of 258 companies allegedly indulging in fraudulent or </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">illegal </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">activities," Jaitley said.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">He also said the government has taken various other measures to curb frauds like </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">defining 'fraud' in the new Companies Act, stricter corporate governance norms and </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">statutory status to SFIO.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">In a separate reply, the minister said several complaints have been received pertaining </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">to </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">cheating of small investors, particularly by the companies involved in Chit Fund or </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Multilevel </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Marketing activities.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">On the basis of such complaints, SFIO has been directed to probe 167 such companies </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">till January 2016. Of these, investigation has been completed in 77 cases and directions </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">to file prosecution have been ordered in 68 cases.</span></div>
Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com2tag:blogger.com,1999:blog-2020300354268548128.post-80226058059887478602016-01-19T21:33:00.002+05:302016-01-19T21:33:25.596+05:30Mumsnet Members create 'Timeless Vie' (the cryptic antithesis of 'Forever Living').<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://timelessvie.files.wordpress.com/2015/11/large-279170-tv.jpg?w=427&h=427&crop=1" imageanchor="1" style="color: #888888; margin-left: 1em; margin-right: 1em; text-decoration: none;"><img alt="See original image" border="0" height="640" src="https://timelessvie.files.wordpress.com/2015/11/large-279170-tv.jpg?w=427&h=427&crop=1" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(119, 119, 119); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px; position: relative;" width="640" /></a></div>
<br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Readers of this Blog might like to visit 'Timeless Vie' (the cryptic antithesis of <span style="color: #cc0000;"><i>'Forever Living'</i></span>).</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><a href="https://timelessvie.wordpress.com/2016/01/17/in-memory-of-friends-family-lost-to-juice-plus-herbalife-younique-forever-living-stella-dot-nuskin-etc/" style="color: #888888; font-family: Arial, Helvetica, sans-serif; text-decoration: none;">https://timelessvie.wordpress.com/2016/01/17/in-memory-of-friends-family-lost-to-juice-plus-herbalife-younique-forever-living-stella-dot-nuskin-etc/</a><br /><br /><br /><br /><img alt="See original image" height="480" src="http://myforever.co.za/blog/wp-content/uploads/2014/08/Leadership.jpg" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1px solid rgb(119, 119, 119); box-shadow: rgba(0, 0, 0, 0.0980392) 1px 1px 5px; padding: 5px;" width="640" /><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">After witnessing robotic<i><span style="color: #cc0000;"> 'MLM' </span></i>recruiters amongst their own friends and families, a number of members of the British Internet forum, Mumsnet, created the concept of Bot-Watching (i.e. laughing at the scripted antics of <i><span style="color: #cc0000;">'MLM'</span></i>adherents, but with the serious goal of shining a light on the problem).</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">Mumsnet members have recently created 'Timeless Vie' - a outrageously funny exposure of <i><span style="color: #cc0000;">'MLM'</span></i> cultic rackets in general, but particularly those which have mainly preyed on women. <i><span style="color: #cc0000;">'Forever Living Products' </span></i>seems to be the most virulent <i><span style="color: #cc0000;">'MLM' </span></i>racket of this type, currently infesting the UK.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">Mumsnet has brought together the most significant group of insightful, and determined, people in the UK ever to start to examine the <i><span style="color: #cc0000;">'MLM' </span></i>phenomenon. They have quickly uncovered the extraordinary scale, and underlying cultic nature, of the problem: the disturbing results of which have been all-too evident on social media.</span><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;"> 'Timeless Vie' is a valuable attempt to halt the spread of the </span><i style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #cc0000;">'MLM'</span></i><span style="font-family: Arial, Helvetica, sans-serif;"> fairy story, but its creators accept that they have little chance of influencing the most gung-ho</span><i style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #cc0000;"> 'MLM' </span></i><span style="font-family: Arial, Helvetica, sans-serif;">fanatics.</span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><span style="font-family: Arial, Helvetica, sans-serif;">David Brear (copyright 2016).</span></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com5tag:blogger.com,1999:blog-2020300354268548128.post-4929423348935296962015-12-30T21:43:00.002+05:302015-12-30T21:43:26.331+05:30A SCAM MASQUERADING AS SANTA<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">By Apurva Venkat & Vandana Kamath,</span><br />
<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Bangalore Mirror Bureau | Dec 25, 2015, 04.00 AM IST</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Christmas is here and social media is abuzz with celebrations of its spirit. Lurking in </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">the dark though, is an online scam that has been turning expectations of those </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">participating in it into heartache. Secret Santa, a gift exchange programme, has lured </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">many people into its fold. The exchange programme invites people to join a chain of gift </span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">givers (and hopeful receivers) through social media platforms like Facebook, Instagram </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">and Twitter. The promised deal is that every person in the chain stands to get 36 gifts </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">against one that they make.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">A person interested in being part of the chain, has to post their agreement on their </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">wall, and invite six more participants. The scheme encourages the person to send a gift </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">valued below Rs 600 to a person whose name and address is at the top of a long list of </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">participants that is sent as a private message. Once they have made the gift, they remove </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">the name of the person in first place, and replace it with the person in the second </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">place. The new recruit then puts their name in the second place of the list.</span><br />
<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Social media experts call it as nothing but a pyramid scheme scam. While this has gone </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">viral in the city only recently, the UK and USA governments have already warned their </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">citizens against falling prey to such scams and termed them illegal. While most victims </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">of the scam are sending books as gifts to strangers, there are others who have been </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">gifting cosmetics, chocolates or Christmas gift packs. Of course, most are doing it in </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">the hope of getting back similar gifts.</span><br />
<span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Chaitanya KM, Kannada film director, who sent a book as a gift under the scheme, told </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Bangalore Mirror, "I sent one book and seven people have asked me for my address but I </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">have not received anything in return. I haven't heard about this scam but I do not mind </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">gifting a book anyway without getting anything in return." Some hope that Secret Santa </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">will work as an eye opener for city social media users.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Sunil Abraham, executive director of Centre for Internet and Society, said, "This seems </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">to be a rumour to which many are falling prey. This will work like net-user education, </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">and people will get wiser after they are cheated. Some form of awareness needs to be done </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">because at least two per cent of people will respond to this." </span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;"><b>FACEBOOK BARS IT</b></span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">According to Facebook rules, multi-level marketing on the platform is prohibited. The </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Facebook agreement terms state that engaging in things like pyramid schemes is not </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">allowed. Also posting personal details on Facebook makes one vulnerable to many more </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">identity fraud that can follow.</span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;"><b>IT'S MATHEMATICALLY IMPOSSIBLE</b></span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">Not only are pyramid schemes like this one is also mathematically impossible, they're also </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">against Facebook's terms of use. The list of theoretical participants multiplies into </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">millions of people in just a few steps of Secret Santa. The idea sounds feasible but it </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">is not. Going from step one it starts with six people, who each invite six more, who all </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">send gifts to the person in the number one spot before they're moved off the list. </span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">However, as it spreads, the number of people involved increases far more than would ever </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">take part — if the 36 each invite six people then the total number of participants is 216 </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">going on to 1,296 and so on. Only those who start the schemes or enter in the second </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">round stand a chance of receiving something in return and even in that case it is just </span><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">one gift not 36 as the post claims. Those who join later never ever reach the top of the </span><br style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;" /><span style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 12.8px;">list. </span></div>
Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com1tag:blogger.com,1999:blog-2020300354268548128.post-71514529376703116992015-10-07T22:59:00.001+05:302015-10-07T22:59:06.509+05:30Never-ending story of white collar crimes<div dir="ltr" style="text-align: left;" trbidi="on">
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</span></span><span lang="EN-GB" style="text-indent: -0.25in;">Law-enforcing agencies need to
be empowered to take criminal cases to logical end</span></div>
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<span lang="EN-GB">M V Syam Sundar</span></div>
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<span lang="EN-GB">The other day the High Court at Hyderabad
was annoyed at the progress of investigation into the misdeeds of real estate
company AgriGold which has collected deposits worth about Rs 7,000 crore from
millions of customers throughout several States in the name of real estate and
failed to repay the deposits. The High Court had even called for the presence
of the AgriGold chairman Avvas Venkata Rama Rao and the Additional Director
General of Police Dwaraka Tirumala Rao in the court to explain the delay in repaying
the deposits to the customers.</span></div>
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<span lang="EN-GB">AgriGold is not the first case and it is
not going to be the last in cheating the gullible in the name of selling products,
services, real estate and what not. It is apt to recall that Subroto Roy, chief
of Sahara International, is still behind the bars for not returning the
deposits worth about Rs 40,000 crore to the depositors. Surprisingly, the
Andhra Pradesh CID police did not take Avvas Venkata Rama Rao even into custody
let alone arrest and send him to jail for reasons better known to them.</span></div>
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<span lang="EN-GB">The then superintendent of police of West
Godavari district, Dr Kolli Raghuram Reddy, filed a criminal case against
AgriGold on the charges of illegally collecting deposits against rules of the
RBI. The then Nellore SP Senthil Kumar had also filed criminal case against it.
However, at the time the West Godavari police are raiding the offices of
AgriGold and seizing the records, the mysterious forces acted in lightning
speed and transferred the case to the AP CID. The rest is history. It is really
mysterious as to who was the ‘real estate political personality’ that acted
swiftly to transfer both the SPs. The case would have gone into the cold
storage forever but for the proactive judiciary that has taken the case into
its hands.</span></div>
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<span lang="EN-GB">In spite of the criminal cases filed
against AgriGold, the company is doing its business without any hindrance.
Several of its agents and the customers who were in deep despair had even
committed suicide. Still there is no serious action against the company but for
the occasional statements by the politicians that justice would be done to the
depositors. </span></div>
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<span lang="EN-GB">Before AgriGold, there was Golden Forest
Ltd which collected Rs 2000 crore in 1990s and disappeared without a trace
after criminal cases were filed. Noticeably that AgriGold chief Rama Rao worked
for Golden Forest before he started his own venture. </span></div>
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<span lang="EN-GB">Pearl Agro, popularly known as PACL, also collected
deposits worth Rs 40,000 crore from public. Till the judiciary took initiative,
there was no police action despite the plethora of complaints against it. Till
to date, the company did not return deposits though the SEBI ordered their
refund. </span></div>
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<span lang="EN-GB">A number of companies have cheated and have
been cheating the gullible and decamped with thousands of crores of rupees. For
instance, Speakasia, the Singapore-based online service company duped people
for Rs 3,000 crore. The Andhra Pradesh CID busted the case following a
complaint lodged by an NGO, Corporate Frauds Watch. However, the money could
not be traced by them. It is the Delhi police who pursued the case and tracked
the criminals who finally returned with the booty and started real estate
business at Darjeeling.</span></div>
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<span lang="EN-GB">A number of companies like NMart, Gemini
Techno, V-Can Network shut shop long back and nothing is heard about the
criminal cases filed against them. Not surprisingly, some of these companies
started legitimate businesses with the ill-gotten money hoodwinking the
law-enforcing agencies. </span></div>
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<span lang="EN-GB">Apart from these, there are a number of
direct selling companies which are still cheating people and amassing enormous
wealth. Amway India, Herbalife, Tupperware, Forever Living Products and other
members of Indian Direct Selling Association (IDSA) have blatantly been
demanding legislations in their favour to continue their fraudulent business
activities. It is apt to recall here that Andhra Pradesh High Court in its
judgement in 2006 categorically stated that the business model of Amway is
illegal. However, the adamant company still pleads for a separate legislation
in support of its illegal business model. </span></div>
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<span lang="EN-GB">The former head of Amway India and four others
did not turn up the other at the criminal court. The magistrate was serious and
ordered all the accused to be present in the court by next hearing. This is the
scant respect these people have for our judicial system. It is apt to mention
here that the Enforcement Directorate has served notice to Amway India for
illegally siphoning out Rs 2,000 crore from the country to the USA. However,
nothing is heard about it later. </span></div>
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<span lang="EN-GB">It is high time the law-enforcing agencies were
empowered to pursue the criminal cases without political interference and the
ill-gotten wealth should be confiscated. </span></div>
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Shyam Sundarhttp://www.blogger.com/profile/06882675852552827969noreply@blogger.com4