Sachin Pilot's MLM companies list does not include Amway India

Union Minister of State for Corporate Affairs Sachin Pilot submitted the list of MLM firms illegally operating in the country. However, he did not mention the name of M/s Amway India Enterprises though the Andhra Pradesh High Court squarely held that the business model of Amway India is nothing but a money circulation scheme under provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. 

4/24/13 www.thehindubusinessline.com/industry-and-economy/pilot-submits-list-of-illegal-mlm-schemes/article4647537.ece?css=print 1/4
Sachin Pilot submits list of illegal MLM schemes
Our Bureau
April 23, 2013: The Union Minister of State for Corporate affairs on March 14, 2013 presented to Lok Sabha a state-wise list of companies against which complaints were received for indulging in Ponzi/ MLM (multi-level marketing) schemes. Pilot was responding to queries raised by D B Chandre Gowda and Adhi Sankar.

WEST BENGAL
(1) M/s. Vibgyour Allied Infrastructure Ltd.
(2) M/s. Rose Valley Real Estates Constructions Ltd.
(3) M/s. Rose Valley Industries Ltd.
(4) M/s. Silver Valley Communications Ltd.
(5) M/s. Rose Valley Food Beverage Ltd.
(6) M/s. Rose Valley Marketing India Ltd.
(7) M/s. Rose Valley Infotech Pvt. Ltd.
(8) M/s. Rose Valley Hotels and Entertainments Ltd.
(9) M/s. Rose Valley Projects Ltd.
(10) M/s. Rose Valley Patrika Ltd.
(11) M/s. Rose Valley Films Ltd.
(12) M/s. Modern Investment Traders Pvt. Ltd.
(13) M/s. Rose Valley Travels Pvt. Ltd.
(14) M/s. Brand Value Communications Ltd.
(15) M/s. Rose Valley Housing Development Finance Corporation Ltd.
(16) M/s. Rose Valley Airlines Ltd.
(17) M/s. Rose Valley Fashions Ltd.
(18) M/s. Rupasi Bangla Projects India Ltd.
(19) M/s. Rupasi Bangla media and Entertainments Ltd.
(20) M/s. Rose Valley Realcom Ltd.
(21) M/s. Saradha Realty India Ltd.
(22) M/s. RTC Properties India Ltd.
(23) M/s. RTC Real Trade India Ltd.
(24) M/s. Jasoda Real Estate Ltd.
(25) M/s. Saradha Printing & Publication Pvt. Ltd.
(26) M/s. Saradha Agro Development Ltd.
(27) M/s. Saradha Biogas Production Pvt. Ltd.
(28) M/s. Saradha Tour and Travels Pvt. Ltd.
(29) M/s. Saradha Automobiles India Ltd.
(30) M/s. Saradha Constructions Company Pvt. Ltd.
(31) M/s. Saradha Shopping Mall Pvt. Ltd.
(32) M/s. Saradha Education Enterprise Ltd.
(33) M/s. Saradha Exports Ltd.
(34) M/s. Goldmine Agro Ltd.
(35) M/s. Tower Infotech Pvt. Ltd.
(36) M/s. Chakra Infrastructure Ltd.
(37) M/s. Gold Field Agro Ltd.
(38) M/s. Golden Life Agro India Ltd.
(39) M/s. Golden Pariwar Holding and Developers India Ltd.
(40) M/s. Goldmine Food Products Ltd.
(41) M/s. Hallo India Express Sales Ltd.
(42) M/s. Happy Life Realty (India) Ltd.
(43) M/s. ICore E-Service Ltd.
(44) M/s. MPS Aqua Marine Products Ltd.
(45) M/s. MPS Greenery Developers Ltd.
(46) M/s. MPS Industries & Agro Research Ltd.
(47) M/s. MPS Resorts and Hotels Ltd.
(48) M/s. Prayag Agrotech Pvt. Ltd.
(49) M/s. Prayag Infotech Hi-Rise Ltd.
(50) M/s. Prayag Infra Realtors Ltd.
(51) M/s. Prayag Micro Finance
(52) M/s. Rahul Heights Ltd.
(53) M/s. Rahul Hi-Rise Ltd.
(54) M/s. Ramel Industries Ltd.
(55) M/s. Shine India Agro Industries Ltd.
(56) M/s. Silicon Projects India Ltd.
(57) M/s. Sunshine Agro-Infra Ltd.
(58) M/s. Sunshine India Land Developers Ltd.
(59) M/s. URO Agro India Ltd.
(60) M/s. URO Autotech Ltd.
(61) M/s. URO Hotels and Resorts India Ltd.
(62) M/s. URO Hygenic Goods Ltd.
(63) M/s. URO Infotech Ltd.
(64) M/s. URO Infra Realty India Ltd.
(65) M/s. URO Life Care Ltd.
(66) M/s. URO Trexim Ltd.
(67) M/s. URO Walkers Ltd.
(68) M/s. Vasundhara Realcon Ltd.
(69) M/s. Vibgyor Allied Industries Ltd.
(70) M/s. Vishwamitra India Consultancy Services Ltd.
(71) M/s. Vishwamitra India Multi-Developers Ltd.
(72) M/s. Waris Hospital & Diagnostic Centre Ltd. (Now Waris Healthcare Ltd.)
(73) M/s. Waris Telecom Services Ltd. (Waris Tel International Ltd.)

RAJASTHAN
(1) M/s. PACL (India) Ltd.
(2) M/s. Goldsukh Trade India Ltd.

TAMIL NADU
(1) M/s Unipay 2U Marketing Pvt. Ltd.
(2) M/s Unipay Creative Business Pvt. Ltd.
(3) M/s Unipay 2U Production Pvt. Ltd.
(4) M/s. Goldquest International Pvt. Ltd.
(5) M/s. Questnet Enterprises India Pvt. Ltd.

KARNATAKA
(1) M/s Unigateway 2U Trading Pvt. Ltd.

DELHI
(1) M/s Speakasia Online Pte. (Unregistered)
(2) M/s. Basil International Ltd.
(3) M/s. Vamshi Chemicals Ltd.
(4) M/s. Appeline Cosmetics & Toiletries Ltd.
(5) M/s. Basil Express Ltd.
UTTAR PRADESH
(1) M/s. Nixcil Pharmaceuticals Specialties Ltd.

COURTESY BUSINESSLINE

NMart's writ petition of 2010 was also withdrawn

This week NMart's counsel has withdrawn the writ petition he filed on behalf of NMart in the AP High Court in August 2010 after Corporate Frauds Watch lodged a complaint with the police against the fraudulent company stating that it is a fraud attracting the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978. The NMart appealed to the High Court to declare its business model legal.

Corporate Frauds Watch filed an implead petition in the same writ petition and appealed to the High Court to hear its plea before taking a decision on the writ petition filed by NMart.

However, the fraudsters tried their best to prolong the hearing on the writ petition.

Finally, the Andhra Pradesh police led by an upright police officer Dr Raghuram Reddy, superintendent of police of Prakasam district started taking action against NMart in 2012.

Immediately the NMart racketeers filed two more writ petitions in AP High Court in 2012 instead of putting forward arguments in the 2010 writ petition. 

When they found the going got tough, they simply appealed to the High Court to allow them to withdraw the petitions.

However, the writ filed in 2010 was not withdrawn at that time.
The counsel of NMart on Monday withdrew the writ petition as there was nothing else he could do with it.
In effect, the NMart lost one more chance to defend its business model in AP High Court. In essence, it could be deduced that NMart has actually nothing to present to the judiciary to defend his racketeering.
It is really pity that still the NMart 'distributors' - the fancy name for members - are still in the make believe world that the NMart would open soon.
It has already been mentioned several times in this blog that no court in India would give any relief to the racketeering of NMart and their ilk.
The classic example of this statement is the latest raids on Amway India in Kerala. The fraudulent company has no defense left for it to claim its 'proven business opportunity all over world' was good for Indians.
Last time in 2011 too, instead of approaching the judiciary for a remedy, the fraudulent Amway racketeers have mobilised some IBOs to submit a representation to the chief minister of Kerala.
This time they simply tucked the tail and slunk off.

MLM has been described as the greatest of all scams

Dear Colleagues,

I have just posted a Blog, entitled "Have I Got a Deal for You: The Endless Chain Offer." The Blog references the excellent article recently published by Bruce Craig, former Asst. Attorney General of the state of Wisconsin.

Many of us have debated, studied and written about the fraudulent practice of selling products (services, dreams, investments, training, etc.) by using an endless chain income promise as the marketing lure. Rewards depend on an ever-increasing number of other investors or participants also joining the plan. The "endless chain" is basis for all pyramid schemes, ponzi schemes, economic bubbles and financial manias. Recent events show it to be the most dangerous of all threats to global economic stability. It can distort pricing, ruin asset values, wipe out jobs, and make people crazy. Yet, it is still a largely unstudied or misunderstood form of fraud.

In much of my own analysis of the endless chains in multi-level marketing (MLM) fraud -- following the mainstream Federal Trade Commission approach -- I have focused on levels of retailing by the MLM salespeople as a determinant of MLM legality. 

Yet, in recent months, mostly from conversations with Bruce Craig, and through my own defense in a defamation lawsuit brought against me by a multi-level marketing company,  I have come to see more clearly that an endless chain is an insidious fraud, regardless whether the "downline" has retail customers or not. It is true that perhaps the harm to the victims would be lessened if all the salespeople could recoup some or all of their investments from retail sales profits. But the reason for their initial investment would have been based on deception by the perpetrators. The promised income could not be gained. All their time, effort and other capital investments would be lost.  Also, many would not actually recoup their direct financial investments anyway since the "unlimited" recruitment rewards and the endless profusion of "salespeople" in all areas makes profitable retailing pointless and unproductive. 

Often the so-called threshold of retail sales is said to have been met (3 customers for each salesperson, with both buying the same amount and paying the same price, with salespeople classified as both customer and distributor), yet, virtually none of the so called "distributors" is profitable. They are still paying out more than they gain in retail profit. Gaining the few retail customers (usually friends or family or phantom customers paid for by the salespersons themselves) is merely an additional "consideration" paid to qualify for the illusory endless chain rewards. The scheme is profitable at the expense of thousands of unprofitable salespeople.

Meanwhile, the promised income, that is based on building a downline, is reserved for the top 1% of recruiters. That fact is mathematically pre-determined and immutable. Offering it to everyone as the lure to draw investments, purchases and fee payments or to induce retail sales is "unfair and deceptive", that is, a swindle. Some state laws, Wisconsin's and California's for example, among others, plainly prohibit endless chain income or discount schemes, and they do not include any provision for a threshold of retail sales. The endless chain is recognized as an "inherent" fraud.

Unfortunately, due to the Amway federal court decision of 1979, the PR and lobbying of MLM companies, and the laxness of the FTC,  "retail sales" has become the wedge that opened a chasm for endless chain promises to enter the marketplace, with multi-level marketing (MLM) as the standard bearer. The pyramid scheme was elevated to a "business model." And now, each year,  millions of people transfer their last remaining savings to the MLM promoters on the futile hopes and dreams of building a huge downline and making the "unlimited" income that is promised.  The endless chain income promise is the central and defining feature of MLM pay plans. Without its false but seductive lure, these schemes would collapse in weeks. 

And since retail levels are the held up as the key factor for claiming legality, the MLM industry has gone to great lengths to ensure that data on retailing cannot be documented. They claim not to know retail sales levels or any other facts about "end-users" or that the data is impossible to document. In fact, this is because, in most cases, the retail customers don't exist! So, a factor (retail sales levels), that it essentially irrelevant to legality, is held up as proof of legality, and then that factor is hidden from the public or regulators to document. The legal defense is both irrelevant and mythical. 

MLM has been described as the greatest of all American scams, but the legal defense of MLMs may be an even greater scam.

References:

False Profits Blog

Bruce Craig Article on MLM Legality

Sincerely,

Robert FitzPatrick, Pres.
PYRAMID SCHEME ALERT
Charlotte, NC
704-334-2047
rfitzpatrick@pyramidschemealert.org

Easy and quick money attracts like magnet and a large number of people would be affected in course of time

Money won’t grow on trees. Sooner the consumer realizes this better for the society.  If any company, be it limited, private limited, association of individuals, society or person, is offering huge rate of interest say thirty per cent per annum or more, it is always better to keep off from them.

It is virtually impossible to give so much rate of interest for anyone. The case in point is the recent scam of NMart a.k.a. NewLook Retail Ltd. The company floated by Surat-based Gopal Singh Shekhawat offered enormous returns on a simple investment of Rs. 5,500. Every member, who is attractively called distributor though he hardly distributes anything, has to pay an initial amount of Rs. 5,500 and he would be given a suit length worth about Rs. 1500 (many members did not receive them that is another matter) and 48 vouchers each costing Rs. 220 that has to be exchanged in the next 48 months with products in the retail malls of NMart.

NMart first registered and collected money from the ‘distributors’ all over country and later started malls, which is a misnomer. Almost all these malls have products like biscuit packets, kurkure, soft drink bottles and very few toiletries.

NMart has also offered Rs. 200 per enrollment of new members into the scheme. If a member enrolls 50 members he would get Rs. 10,000 that means he got hundred per cent returns on enrollment alone.

Apart from commission on enrollment, the members are offered gifts like computers, motorcycles, luxury cars and even foreign jaunts and many more if they enrolled prescribed number of members into the scheme. 

And by exchanging coupons with products in the next 48 years he would get 220x48= 10,560. It is again hundred per cent appreciation of what he invested in four years.

There is one more offer, if a member purchases products worth Rs. 1500 every month for the next 48 months, he would be given an incentive of Rs. 11,000. This is again hundred per cent appreciation of his initial investment of Rs. 5500. It is all very inducing for the common man to simply brush it off.

Where does the NMart get all these money from? Nobody questions. The greedy people enrolled speedily and it spread like a wildfire. Like all Ponzi schemes, the NMart would pay the early birds from the payments of late birds and once chain breaks, he would vanish with all the money. 
If any NMart member has any problem like breach of contract he has to go to Surat to file a civil suit and it is impossible to go to Surat to claim a settlement for the money he invested in the company as the expenses are far more than his investment.

Anyway, he has already started enjoying life with people's money going around on a helicopter and a Rolls Royce.

Corporate Frauds Watch, Vijayawada-based civil society organization, smelled rat in it and lodged a complaint with the police way back in 2010. The police as usual were complacent to such complaints and let it grow. However, Gopal Singh Shekhawat, like all Ponzi scheme operators, filed a writ petition in the AP High Court and the police stopped the investigation stating that there is a writ petition pending in the high court.

By 2012, the membership of the company has touched almost 1.5 million. Corporate Frauds Watch has been lodging complaints with various agencies all over the State. Finally, the Prakasam district police under the guidance of its dynamic and incorruptible IPS officer Dr N Raghurami Reddy went ahead and took the complaint on file. The rest is history.

Gopal Singh Shekhawat filed another writ petition in AP High Court questioning the propriety of Corporate Frauds Watch but it was dismissed as withdrawn on October 9, 2012.

Money won’t grow on trees and sooner the people realized this better for the society.

Wake up Consumers! Don’t fall for the easy and quick money.

नेटवर्क मार्केटिंग के नाम पर गरीबों से लूट

ग्वालियर (15 अक्टूबर)! आज कल नेटवर्क मार्केटिंग के नाम पर गरीबों एवं बेरोजगारों को लूटने का खेल खुलेआम चल रहा है. आज कल ढेरों ऐसीं कंपनिया बाजार में आसानी से देखि जा सकती है जो बेरोजगारों एवं गरीबों को आसानी से पैसा कमाने के तरीके बताते हुए अपनी कंपनी से जुड़ने की बात करते है. कंपनी से जुड़ने के लिए एक निश्चित रकम चुकानी होती है.

कंपनी से जुड़ने के बाद ये कंपनी नेटवर्क मार्केटिंग के नाम पर अपने प्रोडक्ट को महंगे दामों पर बेचने के लिए लिए बाध्य करती है, इनका बिजनेस मोडल या तो पिरामिड सिस्टम पर आधारित होता है या फिर बाइनरी सिस्टम पर जो की "प्राइज चिट्स एंड मनी सर्कुलेसन एक्ट 1978 (बैनिंग) के तहत अवैध होता है एवं पकडे जाने पर 3 साल के करावाश का प्रावधान है.

इस प्रकार की अवैध कंपनिया पहले युवकों को स्वर्णिम स्वप्न दिखतीं है और फिर दावा करतीं है की अगर आपको अपने इन सपनो को साकार करना है तो कंपनी के साथ जुड़ कर नए सदस्यों को जोडीये.

इस समबन्ध में जब हमारी टीम ने ग्वालियर के जिलाधीश पि.नरहरी से बात की तो उन्होंने कहा की अभी तक इस प्रकार के किसी भी कंपनी के सञ्चालन से सम्बंधित कोई सिकायत नहीं आयी है, अगर कोई सिकायत आती है तो दोषियों पर अविलम्ब कार्यवाई की जाएगी.

इस प्रकार के कंपनी से जुड़े एक व्यक्ति ने नाम न छपने के शर्त पर बताया की उन्हें मीडिया एवं उन व्यक्तिओं जो की कंपनी के बारे में ज्यादा जानकारी देने को कहते है, से दूर रहने को कहा जाता है.

यही कारण है की इस प्रकार की कंपनी से जुड़ने वालों में से ज्यादात्तर गाँव के कम पढ़े लिखे लोग ही सामिल है.

--

Deepak Kumar

NMart trying to enroll new members

NMart is on an enrolling spree of new members into the scheme in Uttar Pradesh, Madhya Pradesh. According to reports from these two states, the NMart has been trying to kindle some hope among its existing members by spreading outright lies. No need to say that these lies would not serve any purpose and people have realised that it is a fraud.
Some of the lies include: NMart has got transferred the Writ petition from Andhra Pradesh High Court to Bombay High Court and Shyam Sundar could not come to Mumbai to contest the case and NMart is going to win it.
NMart troubles would be over soon and they could start the business soon and every NMart member would be compensated for the loss they suffered so far.
However, the reality is otherwise.
The writ petition in the Andhra Pradesh High Court is dismissed as withdrawn and it simply is not possible to transfer writ petitions to other high courts.
Gopal Singh Shekhawat, the kingpin behind the racket is still hiding in some rat hole afraid of peeping out at least once in a while. If he comes out, the police would catch hold of him immediately and put in a prison.
Surprisingly, no NMart member is asking the natural question as to why Gopal has failed to clear the their doubts and why he is hiding if he believes that his business is legal. Actually, Gopal has made enough money to live comfortably through out his life and he least bothers to get the business restarted.
Now he is only trying to make as much money as possible in other States where there are no criminal cases filed against NMart. Once the police got wind of the criminal cases in South Indian States, they would also file criminal case against NMart and more people would lose their money.
Corporate Frauds Watch appeals to people not to fall prey to the evil designs of NMart and not to lose their hard-earned money. 

Reality-inverting propaganda by Lyoness apologosit

Shyam

I observe that a tedious person signing himself/herself 'SMRnana' has posted reality-inverting propaganda (in the form of a scripted-comment) on Corporate Frauds Watch, in defence of the European-based 'income opportunity' racket known as 'Lyoness.'

In brief, 'SMRnana,' has claimed that 'Lyoness' is just an innocent cash-back company which he uses to do a bit of discount shopping, and that anyone who says otherwise, has some hidden dishonest motive or does't understand how the company functions.

Sadly, we've heard essentially all of this familiar bullshit before from the transparent propagandists of other 'income opportunity' racketeers.

If 'Lyoness' really is just an innocent cash-back company, as 'SMRnana' pretends, then perhaps he/she could offer an explanation to the free-thinking readers of CFW as to exactly what was happening at the pay-through-the-nose-to-enter 'Lyoness' mass-meeting which features in this alarming video. 

http://www.youtube.com/watch?v=AlkIdyr74PI&feature=related

Self-evidently, all these deluded people have not joined 'Lyoness' just to do a bit of discount shopping. They have signed up in the false belief that they are all going to make lots of money by recruiting their friends and relatives.

The quantifiable evidence proves beyond all reasonable doubt that 'Lyoness' has been the corporate front for a classic 'prosperity gospel' cult, and that its instigators are racketeers who have been peddling an unoriginal Utopian lie.

David Brear (copyright 2012)

Andhra Pradesh High Court refuses to grant any relief to NMart

Justice K C Bhanu on Tuesday heard the arguments of NMart's counsel in the writ petition filed by NMart which is accused of indulging in money circulation schemes and criminal cases were filed against the company.

The counsel for NMart pointed out that the police have been registering more FIRs against the company when the writ petition is being heard in the High Court. However, when Justice Bhanu asked for the copy of second FIR he could not show.

The counsel requested the Bench to grant interim stay on the investigation into the case against NMart.

Justice Bhanu said that when the original plea under the writ petition was not maintainable how could an interim stay could be granted. He refused to grant any relief to the NMart.

When the NMart's counsel appealed to give more time, the hearing is adjourned and would be heard only on Dasara vacation.

In effect, the members of NMart have to wait till at least October 29 to know their fate which would anyway be sealed by then.

It is a lesson to the greedy people who want to make fast buck by way of cheating their own friends and relatives though they knew well that it is a crime.

People like Gopal are always try to make easy and quick money by playing with the greediness of people who too want easy money. Ultimately, it is Gopal who made wads of money laeaving several lakhs of people  in the lurch.

The smooth talk of such crooks is the most dangerous part in our society which would be broken with mistrust among people.

My Dear Fellow Indians and world citizens! Do not fall for the easy and quick money lure. 

There is nothing like that. These crooks are out there to grab your hard-earnings. 

The 'lie' fundamental to all 'MLM/Direct Selling income opportunity'frauds

Shyam

 

I think that we should again remind your free-thinking readers that it is universally accepted that lying to, or withholding key-information from, people in order to take their money, is fraud which is a form of theft. However, common-sense reveals that, by 'passing any law, but failing to enforce it, has the effect of authorizing (but not legalizing) the very crime which you are trying to prohibit.' 

Bearing the above in mind, I observe that various intellectually-castrated commentators have recently appeared on 'Corporate Frauds Watch' who, on the one hand, have freely-accepted that certain 'MLM' schemes (like 'NMart') have been frauds prohibited by Indian criminal law banning money circulation schemes. However, on the other hand, they keep insisting that these criminal 'MLM schemes' can't have been authentic 'MLM schemes,' because 'MLM' is a lawful 'Direct Selling Business Model.'

As ever, none of these latest 'MLM' propagandists can produce any independent quantifiable evidence in the form of audited accounts (particularly, income-tax payment receipts) to support the absurd fairy story entitled 'lawful MLM/Direct Selling.'  

As you know, about 15 years ago, I coined the common-sense phrase: 'premeditated, or dissimulated, closed-market swindle,' in order to deconstruct all Ponzi schemes, pyramid frauds, money circulation games, chain-letter scams, etc. The lie which is fundamental to all 'closed-market swindles' is that people can earn income lawfully by contributing their own money to participate in any alleged 'profitable commercial activity' which is secretly an economically-unviable fake, due to the fact that the alleged 'profitable commercial activity' has no significant, or sustainable, source of revenue other than its own participants.

For more than 50 years, in the USA, 'MLM/Direct Selling income opportunity' racketeers have been allowed to dissimulate closed-market swindles by offering their victims various banal, but grossly-over-priced, products, and/or services, in exchange for unlawful payments, on the pretext that 'MLM' products and/or services, can then be regularly re-sold for a profit in significant quantities. However, since no gang of 'MLM' racketeers has ever proved that 'MLM'wampum has actually been regularly re-sold directly to the general public for profit in significant quantities, 'MLM' participants have, in fact, been peddled infinite shares of their own finite money.

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

David Brear   (copyright 2012) 

Gemini Techno fleeced Rs. 20 crore in the name of multilevel marketing

Rajahmundry-based Gemini Techno private limited started selling various products under the business model of direct selling a few years back including products like idli stand and other kitchenware material. According to the business model, a person who wants to become a distributor of Gemini Techno has to pay about Rs. 3,000 and he would be given some products and if he enrolls more members into the scheme he would be given a commission of Rs. 200 per membership.

Many people bite the bait and become members. After finding it very difficult to enroll more members into the scheme they started blaming their fate for joining the scheme.

The scheme ran for several years and within a short span of few years, Gemini Techno chief made about Rs. 20 crore. Police filed a criminal case against the company and like all the crooks, the Gemini Techno preferred to file a writ petition in the AP High Court  appealing it to declare its business model legal.

They started the racket once again showing the writ petition copy to the police. Though the High Court did not grant any relief, the police remained silent and did not take any action. The racket continued for a few more months.

After learning that the Gemini Techno filed the writ petition, Corporate Frauds Watch filed an implead petition in the writ petition filed in the AP High Court.

The writ petition reached the Bench in 2011 and Corporate Frauds Watch’s counsel appeared in the court. The division bench comprising Justice Goda Raghuram and Justice Ramesh Ranganathan heard the arguments of the counsel of Gemini Techno.

Counsel of Corporate Frauds Watch waited patiently for his turn to present the arguments. However, the justices kept on shooting questions one after another and the counsel of Gemini Techno faltered to answer their queries. Justice Ramesh Ranganathan asked the last question that the company is selling idli stand and other kitchen appliances but what is techno in it. That was the last straw on the camel's back, and the defense argument collapsed.

The writ petition was dismissed and the police arrested all the directors of the company and confiscated the properties of the company freezing all the bank accounts of Gemini Techno.

That was the end of a multilevel marketing company.

The MLM apologists conveniently ignore the latter letter by the Secretary of Consumers Affairs

Often multilevel marketing apologists quote the letter written by secretary, consumer affairs, Government of India which is blatantly misused.
They conveniently or out of ignorance never mention the follow up letter written by the same department on 23-09-2003. It is herewith being produced verbatim for the convenient of our free-thinking readers as well as ignorant or cunning members of MLM companies.

F.No. 21/(22)/IT/2001

Government of India

Ministry of Consumer Affairs, Food & Public Distribution

Dept of Consumer Affairs

Shastri Bhavan, New Delhi

Dated 23.09.2003

To

Ms. Sunitha Kalla,

 Dy Director General & Joint Secretary

Ministry of Finance, Dept of Revenue,

Central Economic Intelligence Bureau

6th Floor, B Wing Janpath Bhavan

Janpath, New Delhi

    Subject:  Applicability of the Provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978  to pyramid marketing structure/schemes - Regarding.

Madam,

      I am directed to refer to your D.O. Letter No. 301/15/2001-CEIB (Pt-II) dated 22nd September 2003 addressed to Shri Wajahat Habibullah, Secretary (Consumer Affairs) on the subject mentioned above and to say that this department was considering the issue of direct selling/network/multi-level marketing as an alternative form of marketing of goods and the entire issue was looked from that angle. However, subsequent feed back/response have showed that companies using pyramid structured marketing techniques too sell their products putting forth their schemes based on the clarification issued vide D.O. letter of even no dated 31st March, 2003 claiming that their activities also do not fall within the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. It is clarified that this Department's clarification of even number dated 31st March, 2003 does not cover pyramid structured marketing schemes. That area also does not fall within the purview of this Department.

This is issued with the approval of Secretary (CA).

Yours faithfully

sdxxxx

Alice Chacko

Under Secretary of Govt of India

Copy to : Chief Secretaries of all States and Union Territories.

The letter of Consumer Secretary was annulled by this letter on the reference of Central Economic Intelligence Bureau, Government of India. 

Still, Gopals, Mallappas and plethora of other apologists refer the same annulled letter.  It is nothing but cheating once again after stealing billions of rupees from millions of people

Gopal cheated millions showing empty papers as Supreme Court order

Just watch this video which was taken when Gopal Shekhawat was opening NMart's Bhopal branch. The video is self-explanatory. 

Gopal was very confident to tell the blatant lie to the gullible that there is a Supreme Court order allowing his company to continue his business. He asked them to show the Supreme Court order to the police when they were confronted to arrest them under money circulation scheme enactment. But he never handed over the copy of it to anyone. Nor he could produce it to the Andhra Pradesh police when he was arrested and about to be shifted from Mumbai. It is proved beyond reasonable doubt that Gopal is a number one cheat. So he knew from the beginning that the police would come after him and his business associates for indulging in money circulation scheme.

It is also proved beyond reasonable doubt that he lined his pocket with ill-gotten easy and quick money. Only his advocates somehow managed to obtain the bail for him and he now became the fugitive running away from the law-enforcing agencies hiding in a rat hole.

Still, his 'devotees' praise him and hope that NMart would be revived soon. They refuse to believe that NMart is gone and so is the hundreds of crores the crook Gopal has garnered from public. They also blindly believe that there would be a comeback for NMart.

My dear fellow Indians! This is the true colour of all these crooks who are out to cheat you in the name of multilevel marketing, network marketing, referral marketing, direct selling so on and so forth.

The Supreme Court has rightly said in its judgement in Kuriachan Chacko case. The organisers of such schemes   know well that it is mathematically impossible to run the schemes forever. They also know that the chain is going to break sooner than later. Still, they induce people to become members. That is why Section 420 of Indian Penal Code is applicable while filing criminal case against such crooks under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

It is a classic case to be presented to the law enforcing agencies and law makers to prove that there is nothing like infinite chain and ask them to desist from making any guidelines or regulations in favour of the multilevel marketing.

For the last several years Corporate Frauds Watch has been cautioning the public not to lose their hard-earned money to these crooks. They are overpowered by greed to earn easy and quick money. This is how the crooks have been cheating the gullible in the name of multilevel marketing.

Some of our friends who lost their money and vociferous in defending the fugitive Gopal say that they have no time even to see the video (LoL).

After stealing people’s money, the crooks want a law in their favour

Earlier, even if a single story was published in the press against them, people used to shy away from public and feel embarrassed.  Nowadays, the crooks have become so brazen that they are showing victory signs to the TV channel cameras while they are being arrested by the police.

More, these crooks want a law to protect them from police while they are stealing crores of rupees public money.

The hectic activity on this blog could not be missed after a criminal case was filed against NMart and suddenly a sizable number of crooks raised their ugly heads demanding refund of money from Gopal Singh Shekhawat.

Many of them knew that the chain is going to break any time but everyone wants their share of booty before it is closed. They just refuse to believe that the chain would break soon.

One reader reported from Gujarat that a criminal case was filed against Gopal Singh Shekhawat there in 2010 itself. The tactics of all these crooks is similar. They immediately file a writ petition in the respective States where police file criminal cases against them.

Look at the track record of Gopal Singh Shekhawat. He filed a writ petition in Rajastan High Court in 2010 and another writ petition in AP High Court also in 2010. Immediately, after Corporate Frauds Watch filed a criminal complaint against NMart, he filed two more writ petitions in AP High Court without mentioning the old writ petition. NMart has also chosen two more writ petitions in Bombay High Court.

Police keep quiet fearing wrath from the judiciary. And these crooks continue their looting. However, there is an elastic limit and the chain brreaks. Then they start running away from law. 

That is exactly what Gopal Singh Shekhawat is doing now.

There is a demand from some quarters that a law is needed in favour of multilevel marketing. It is like thieves asking for an enactment to let them freely steal public money. When the multilevel marketing itself is illegal and a crime, how could there be a law in its favour.

The only category that is silent is that of burglars. No wonder if they too formed an association in future demanding a right to steal and an enactment in their favour.

Not surprisingly, everyone who joined such schemes knows well that the chain is going to break in near future. But everyone wants to make as much money as possible before the chain breaks and police start filing of criminal cases.

One fellow was heard saying that the management of NMart is filing a writ petition in the high court and they could continue till it is disposed of.  This is the attitude of the members of such schemes. Everyone wants easy and quick money. They do not mind to cheat their own friends and relatives to achieve that. At the same time, there are some who are carried away by the tall promises of these crooks.  In one word, the greed to get easy and quick money has been landing them in trouble.

My dear fellow humans all over world! There is nothing like easy and quick money and do not fall prey to such evil designs of these crooks.

NMart accused sent to judicial custody in jail

Prakasam district police who arrested the four accused persons who hold key positions in NMart brought them and presented them before the judicial magistrates of Chirala and Kandukuru.

Md Saleem Khan, one of the directors of the fraudulent company NMart was presented before the judicial magistrate of Chirala and the magistrate sent him to judicial custody for 14 days.

Likewise, Chief Executive Officer Akhil Patrawala, Human Resources head Hiren Devani, Business head Pratik Desai were presented before the judicial magistrate of Kandukuru. The magistrate sent the accused persons to 14 days judicial custody.

Meanwhile, the key accused in the Rs. 1400 crore scam, Gopal Singh Shekhawat continues to play hide and seek with the police.

It may be recalled that Corporate Frauds Watch filed a criminal complaint against the fraudulent company NMart a.k.a. Newlook Retails Pvt Ltd for indulging in money circulation scheme in the name of selling products.

Police arrest CEO, Director, HR Head, Business Head of Nmart

Prakasam district police arrested one of the directors of NMart Md. Saleem Khan, Chief Executive officer Akhil Patrawala, Head of Human Resources Hiren Devani, Business head Pratik Desai. The accused persons would be presented in the judicial magistrate court. Kandukuru CI Akkeswara Rao and Chimakurti SI Muralikrishna arrested the accused.

However, the chief of NMart Gopal Singh Shekhawat is still at large and police issued a lookout notice for him. It may be recalled that NMart a.k.a. Newlook Retails, indulged in money circulation scheme in the name of selling products offering astronomical returns in a short span of time. Corporate Frauds Watch, Vijayawada-based civil society organisation, lodged a complaint with the police of Kandukuru about the illegal activities of the company.

However, after the police registered a criminal case and went to arrest Gopal Singh Shekhawat, on the promise of presenting himself before judicial magistrate at Ongole, he secured bail but jumped the bail. Thereafter, police have been searching for the fugitive Gopal Shekhawat.

Meanwhile, NMart filed a couple of writ petitions in Andhra Pradesh High Court but the high court refused to entertain any relief to the accused including anticipatory bail to the kingpin Gopal Singh Shekhawat. NMart could not convince the judiciary that its business model is legal. It also could not convince the judiciary how they are going to give returns of more than hundred per cent in four years. They also could not explain how they are going to extend various gifts like computers, motorcycles, luxury cars and even foreign trips to the members if they enroll more members.

That is why Gopal Singh Shekhawat is hiding in some obscure place avoiding the arrest.

The Bosses of 'Herbalife' have been robbing the Grameen Bank via its customers

Professor Muhammad Yunus is a Bangladeshi economist who, in 1976, attempted to tackle the problem of world-poverty by founding the Grameen Bank. This common-sense institution now distributes more than $100 millions of low interest, small (or micro-credit) loans annually, to persons (mostly women) without collateral, in order to help them to escape the poverty-trap by starting their own businesses and achieving financial self-sufficiency. Muhammad Yunus was awarded the Nobel Peace Prize in 2006, along with Grameen Bank, for their campaign to create economic and social development around the world. 

Amongst many other international awards, Muhammad Yunus received the Presidential Medal of Freedom from Barack Obama, in 2009.

Although technically it is not classified as a bank in the USA (because it can't accept deposits from the public), in 2008, Grameen America opened its first Branch in the New York borough of Queens. This was followed in 2009, with a branch in the South Side of Omaha, Nebraska, where almost all borrowers have been unemployed, women immigrants from Latin America. 

It has recently been reported that many of the poor women who received their initial $1500 loans from Grameen America in New York and Omaha, have been persuaded to pour this borrowed-cash into 'Herbalife' and other 'MLM income opportunity' frauds, believing that they were going to achieve total financial freedom through buying a quota of products each month whilst recruiting their friends and relatives to duplicate the same endless-chain plan. In this way, numerous empty stores in Omaha were transformed into so-called 'Herbalife Nutrition Clubs.' These were typically draped with green curtains and decorated with posters of soccer stars who play for clubs sponsored by 'Herbalife.' Sadly, a number of these so-called 'Herbalife Clubs' have already vanished and the loans which were used to create them, have not been repaid.

'Herbalife income opportunity' propaganda  from the UK

In reality, all so-called 'MLM income opportunies' have been dissimulated closed-market swindles (i.e. without a significant or sustainable source of revenue other than that deriving from their own contributing participants, due to the fact that 'MLM' products have always been effectively-unsaleable on the open market). Classically, other than an insignificant minority of schills at the top of these pyramids, all so-called 'MLM income opportunities,' have had an 100% rolling loss/churn rate, whilst this key-information has been deliberately hidden from the public by their instigators.

Until recently the Grameen Bank has operated a policy of trusting its clients to make their own choice of business. However, for obvious reasons, certain Grameen staff have belatedly begun to advise their American borrowers not to get involved with 'Herbalife' in particular, and  with 'MLM' in general.

http://online.barrons.com/article/SB50001424053111904370004577390241476503930.html#articleTabs_article%3D1

It is interesting to note that the US federal government's Small Business Administration (without actually naming any so-called 'MLM' companies, because that is forbidden by law) specifically lists all 'pyramid sales plans' as being ineligible for financial assistance; describing them as:

... 'plans, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants. Such products as cosmetics, household goods, and other soft goods lend themselves to this type of business.'

http://www.sba.gov/content/businesses-eligible-ineligible-sba-assistance

David Brear (copyright 2012)

Madras High Court held in V-Can Network case MLM is a fraud played on hapless, innocent public

In a land mark judgement the Madras High Court in Writ Petition No. 2908 and Writ Petition No.4144, W.P.M.P.Nos. 3650 and 5221, W.P.No. 2908 all of 2003, stated that the V-Can Network (P) ltd is indulging in money circulation scheme in the name of selling products.

One look at the facts of the case reveals that there are striking similarities between the present NMart and V-Can Network in the business model with only difference that former has set up retail shops all over the place.

Let us get into the details of V-Can Network. A case in Crime No.42/2003 was registered on 24-01-2003, under Sections 420 and 506 (1) I.P.C.; under Sections 4, 5 and 6 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978; under Section 15 of Indian Medical Council Act; under Sections 3 and 4 of Drug and Magic Remedies Objectionable Advertisement Act, 1978 by Central Crime Branch, Chennai City Police, based on a complaint given by one Jayaraman of Chennai.

The allegation in the complaint is that one Senthil Murugan, who had become a member and who had bought a magnetic bed, falsely induced the complainant that if he purchases a magnetic bed for Rs.5,990, he would in turn become a member and if he in turn introduces two more members, he would make quick money to the tune of lakhs of rupees and thereby cheated the complainant.

As per definition 2 (c), money circulation scheme or multi-level marketing or whatever by name called, is a fraud being played on the hapless and innocent public by way of manipulation and deceit. It is the case of the respondents that inferior quality products are sold with false claims at exorbitant rates while the products are worthless and thereby they cheat the public.

Likewise, the members/distributors are falsely induced by selling inferior products at exorbitant rates which are worth nothing and in turn for them to make quick or easy money.

The members/distributors have to falsely induce more members. It is demonstrated before me that as per that scheme, every member/distributor has to be necessarily enrolled with a membership fee which is taken by the petitioner/promoter to buy their products and each member/distributor has to falsely induce and enroll more members and if that is done, he gets a minor share of the ill-gotten wealth and thereby the chain continues. The intention of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 was to prevent white collar crimes being perpetrated on hapless and innocent public. It is the case of the respondents that the preliminary investigation prima facie discloses that the petitioner/promoter company is involved in money circulation scheme, thereby whatever money is paid to a member/distributor is money paid by the members themselves to a minor extent and the major part is illegally kept by the petitioner/promoter company by false inducement and false representations.

It is also demonstrated that unless the member/distributor falsely induces others to become members/distributors, they cannot make quick or easy money and the money paid or circulated as commission or incentive is only the ill-gotten money made from other members/distributors and the chain continues by manipulation and deceitful false claims.
Learned senior counsel for the petitioner has contended that though this system already existed in this country and multi-national companies are doing the same business, the petitioner-VCan Network alone was singled out and the police have taken action against them.

For this, the learned Government Advocate has brought to notice that they have already taken action against promoters of Cymbolic Multi-crore company and arrested the persons concerned. It is also stated that their bail applications were dismissed. He also brought to notice that apart from this, a case has been registered in Crime No. 230/2003 on the file of Inspector of Police, Central Crime Branch, Chennai against Japan Life company which is also indulging in the sale of magnet beds and about 80 persons have already been arrested and later released on bail. The above particulars show that there is no mala fide intention on the part of the respondents and there is no basis for the allegation that action was taken against the petitioner alone.

Though the V-Can Network management claims innocence and their business being lawful, the same has to be ascertained only after thorough investigation, final report, trial, evidence and judgment and in such a circumstance, the grievance expressed by V-Can Network and the distributors cannot be gone into in a writ jurisdiction under Article 226 of the Constitution of India. It is needless to mention that it is open to them to put-forth their defence before the appropriate forum/Court if their business/activities are lawful.
In such circumstances, since the investigation is at the crucial stage, any interference in the investigation will seriously hamper and prejudice the investigation.


This Court hoped that the Investigation Agency will undertake the task promptly and complete the same expeditiously. With the above observation, both the Writ Petitions are dismissed.

India needs an intellectually-rigorous, and accurate, definition of 'lawful direct selling'

Shyam

I notice that (without offering to produce any quantifiable evidence to support their anecdotal claims) certain intellectually-castrated Indian adherents of 'NMart' keep bleating that 'MLM' is perfectly lawful, whilst other correspondents of Corporate Frauds Watch have politely asked: How can 'NMart' be reformed? 

Hopefully, the legislators tasked in the republic of India with drawing up a new definition of 'lawful direct selling,' will take note of what has been happening in the USA, where 'MLM/Prosperity Gospel' rackets have spread like cancers, and where (to date) they have only been challenged by less-than-intellectually-rigorous, and/or corrupt, trade regulators who have allowed billionaire-criminals to write their own inaccurate definition of 'lawful direct selling.' 

I have previously described this tragi-comic situation as the equivalent of trying to stop the spread of the 'Nazi' lie, by asking the governing body of the Boy Scout Movement to keep an eye on the 'Hitler Youth.'

Your free-thinking readers should be aware that a common-sense, but effectively-toothless, new US Federal Trade Commission 'rule' was introduced at the start of 2012 which requires anyone in the USA selling a 'business opportunity (other than a so-called 'MLM') to supply anyone buying that 'business opportunity,' with a one page disclosure-form which must include:

• evidence to support any earnings claims
• a list of any previous legal actions against the sponsoring company
• a declaration of the sponsoring company's cancellation/refund policy 

In other words, although they are obviously not described in accurate deconstructed terms by current FTC officials, this 'business opportunity rule' specifically excludes blame-the-victim 'MLM Prosperity Gospel' cults from regulation and has effectively-placed their bosses above the rule of law in the USA.

Sadly, FTC agents have completely failed to recognise 'Prosperity Gospel' cultism as a form of major, ongoing racketeering activity, because the FTC has itself foolishly allowed the instigator/leaders of these gangs lawfully to register their unlawful activities as 'direct selling/MLM' companies - 'Amway', 'Herbalife', 'NuSkin', 'Xango', etc. However, in the adult world of quantifiable reality, no evidence exists (in the form of audited accounts; particularly, income-tax payment receipts) proving that a significant number of the constantly-churning adherents of any of these organizations (which all have exhibited the universal identifying characteristics of a cult) has ever received an overall net-income from lawfully-retailing goods, and/or services, directly to the general public for a profit.

To add insult to injury, the following non-specific statement had previously been made by David Vladeck, the current  US FTC Director Bureau of Consumer Protection:

'The victims of these (business opportunity) frauds are our neighbours - people who are trying to make an honest living... they risked their limited financial resources in the response to the promise of a job or an income - a chance at a profitable home-based business. But these turned out to be empty promises - and the people who counted on them ended up with high levels of frustration and even higher levels of debt.'

David Vladeck's largely-empty rhetoric was also repeated by another leading FTC attorney, Eileen Harrington. Obviously, it is a perfect description of 'MLM income opportunity' fraud, but these laudable words were part of the FTC's ironically-titled initiative, 'Operation Empty Promises' which, unbelievably, has not targeted any of the most-pernicious 'MLM' mobs.

http://ftc.gov/opa/2011/03/emptypromises.shtm  http://www.ftc.gov/multimedia/video/cases/empty-mlmpromises_hanks.shtm .

Meanwhile, the US Dept. of Justice, which (due to its previous, let's turn a blind-eye to all businessmen, policy) is now sinking in a sea of fraud, has recently announced the following impressive-sounding initiative - a 'consumer protection working group to combat consumer fraud.' In plain language, this translates as: large numbers of US Justice Dept. attorneys now have a further pretext to keep holding 'conferences' at the expense of their employers (the public) whom they have failed to protect.

 http://www.stopfraud.gov/opa/pr/2012/February/12-ag-200.html . 

http://www.bloomberg.com/news/2011-09-20/-extravagant-spending-16-muffins-found-at-justice-conferences.html .

Judging by their previous, shameful track-record, legally-qualified, senior US government officials, would appear to be some of the last people in America who should be tasked with coming up with solutions to fraud. Self-evidently, the only common-sense legislation which could have halted blame-the-victim 'MLM Prosperity Gospel' cultism in the USA many years ago (and before it became a global problem), would have been to have made it a fundamental requirement for the instigators of all alleged 'direct selling/income opportunities' to produce quantifiable evidence to prove that they have had a significant and sustainable source of revenue other than that deriving from their own participants. Had such common-sense legislation been enacted, and rigorously enforced, then (since 1970) if the instigators of any alleged 'direct selling/income opportunity' had been unable to produce such elementary proof of the economic viability, and legality, of their alleged 'commercial' activities, they could have been immediately arrested by FBI agents, their labyrinths of counterfeit corporate structures closed-down and all their illegally-acquired assets seized, under existing RICO legislation. 

Once you understand that all so-called 'MLM' companies have been cultic Trojan Horses, it is a pointless exercise examining their reality-inverting 'commercial' exteriors. The blindingly-obvious common-sense questions which have never been put to the officers of the so-called 'Direct Selling Association' by either the American mainstream media or by US law enforcement agents, are:

• Exactly how many US citizens have signed up for so-called 'MLM income opportunities' overall, and exactly how many overall have got back more than they paid in
• Out of all the alleged 'multi-billion dollar direct retail sales ' claimed by you and your member companies in the USA down the years, exactly what percentage have been authentic, external, retail transactions to members of the general public for a profit, rather than internal transactions between your member companies and their many millions of alleged 'business owners,' but which have been laundered as 'retail sales' by you, and by your member companies, in order to dissimulate the operation of closed-market swindles from which the ill-informed ordinary contributors cannot have hoped to receive any more money than they paid in?
• Excluding all your own member companies' documentation, and that issued to their alleged 'distributors,' what quantifiable evidence can you produce proving that any of your member companies' alleged 'Multi-Level Marketing income opportunies' have actually had any significant, and sustainable, external source of revenue other than that deriving from their own participants?

Although it remains unthinkable to many people, a large part of the so-called 'direct selling industry,' which recently boasted '$28.56 billions of annual retail sales in the USA,' can be proved to have been nothing more than the 'corporate'-front for a collection of blame-the-victim 'MLM/Prosperity Gospel' cults which have been running some of the most extensive, and outrageous, dissimulated, closed-market swindles in history. 

For a long time, it has not been in the interests of the US Justice Dept. to face up to this ugly reality, because 'MLM' racketeers have greased the palms of a remarkable number of key persons, and organizations, in the American establishment (particularly, leading members of the Republican party). Indeed, the ultimatedream of 'MLM' racketeers (to have the protection of the sitting US President), might soon be again turned into a nightmare reality. 

David Brear (copyright 2012)