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.

There is nothing like easy and quick money

One of our readers Anshuman Sharma raised a very good query.

Mr Shyam, please give me answer for my blog. 20 lakh distributors who liked the product and services don't have the problem. It's like prepaid system Airtel DTH or mobile services you can pay in advance and use it for a year. BY stopping NMart facility due to your action against our Indian MLM company now those who were regularly getting product monthly basis is not getting, and those who were getting commission and job in the days of unemployment for their hard work is stopped. So you TELL ME RESPECTED SIR, are YOU saving Indian distributors or creating loss to them.
If you are really against corruption and well wisher of common people who are unemployed so please help them in positive manner like in America out of 5 lakh millionaires 1 lakh are from direct selling industry. Now this INDUSTRY SIZE IS 100 BILLION DOLLERS (Rs 50,000 Cr APPROX) AND PLS FIND OUT STATEMENT OF EX PRESIDENT BILL CLINTON , WARREN BUFFET, BILL GATES , DONALD TRUPH (sic) (actually it is Donald Trump) AND THERE ARE SO MANY IN GOGGLE, THEN YOU WILL REALISE the scope for country and common people. THANX ANSHUMAN SHARMA.

Dear Anshuman, 
You Said that 20 lakh distributors like the products and services and don't have a problem. You have also said that the distributors are getting commission. You did not elaborate how they are earning commission. May I say how they are earning commission. They are earning commission by enrolling more members into the scheme. These people are happy with Rs. 200 per enrollment. But the company is pocketing more than Rs. 5,000. That is illegal. Enrollment is illegal and unjust enrichment by the company is also illegal.
It is not like prepaid system. Nobody would pay Rs. 5500 if they are offering products and services for the same amount. That company is offering double the amount in 48 months. That is the inducement to pocket your money. Not only that they are inducing you to make your friends and relatives to become members to rob their money too. 
This is what is called chain marketing and it is illegal. The chain is going break sooner than later and every distributor in the downline are going to lose their money. 
You said that it is employment. This is not employment but it is a bid to encash the friendships and relationships.
It seems you are also carried away by the propaganda the direct selling is flourishing in the USA. It is not true. The truth is entirely different.
In India, the pyramid scheme, direct selling, network marketing, referral marketing are banned under the  Prize Chits & Money Circulation Schemes (Banning) act, 1978.
You are only losing your friends and relatives by enrolling them in such schemes. They will never trust you in future. That is the dangerous part of this money circulation schemes. 
Don't fall prey to it. Come out of it. There is nothing like easy and quick money. 

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.

Don't fall for promises of easy and quick money

Many people are arguing in this blog that why I have taken so much time to set the law in motion. Some others want a regulatory mechanism to bring order in multilevel marketing. 

When the law clearly says that becoming a member and enrolling others to become members in such schemes is prohibited under the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978, 1978, what is the point to have a regulatory mechanism to make an illegal act legal. It is an open illegal money circulation scheme.

I have made it clear several times, many people who join in these schemes want to earn easy and quick money though they know it is a crime. I have heard at one NMart retail shop, that NMart is going to file a writ petition in the High Court, and we could continue for sometime. It means that they know well that they are cheating their own friends and relatives to join such scheme. 

That is why people are vociferously raising their voice against me and even casting aspersions on my action.

Andhra Pradesh High Court in its judgement in the writ petition filed by speakasiaonline pointed out that "The first contention raised by the learned Senior Counsel is that First Information Report can be registered only on commission of an offence. It is true that First Information Report is to be registered on commission of an offence, more particularly, for a cognizable offence. Once a cognizable offence is committed, First Information Report can be registered. But at the same time, some of the provisions in the law enable the Investigating Agency to register First Information Report for mere preparation alone, for example, Sections 120-B, 399 of IPC and 7(1)(a) of the Criminal Law Amendment Act. Further, whether an offence committed or not always depends upon the ingredients mentioned in the provision of law. Some provisions in the penal laws made the preparation also as an offence. When the provision deals the preparation as an offence, the preparation itself is commission of offence."

The Supreme Court in its judgement in AR Antulay vs. RS Nayak (AIR  1984 SC 718) case stated that "Crime is a wrong against the society at large and therefore, as a general rule, any person having knowledge of the commission of an offense may set the law in motion by a complaint."

It is clear here that a person need not be a victim to lodge a complaint and anybody could complain whenever a crime takes place.

In the speakasiaonline case also, the racketeers raised the same question that the complainant made unjust demands and when it was not met, he lodged a complaint.

The High Court has looked whether there was prima facie offence in the complaint and when the crime was found it dismissed the writ petition.

This is exactly what is going to happen in the case of writ petition filed by the NMart.

In fact, the first complaint was lodged with the police way back in 2010 and had the police taken action at that time, the NMart would not have grown to this extent. Many people would have been saved. Now everyone is going to lose their hard-earned money. I really feel sorry for them. Many of them were lured by easy and quick money and high returns. Even today they strongly believe that they are going to earn a lot of money as per the promises of Gopal Shekhawat.

People should realise that it is a crime to join such schemes and that the friends and relatives they have joined in such schemes would never believe them in future if they suffer loss. If the mutual trust is lost, the society would collapse.

I appeal to the people all over world not to join such multilevel marketing companies and cause damage to the social fabric of our closely knit society.