MLM fraud: More skeletons tumble out as investors cry foul

  Panic gripped the investors of multi-level marketing companies after they duped around Rs 400 crore from over lakhs of investors on the pretext of providing them high returns. Investors are running from pillar to post to get their invested money back.

According to a senior police official, Gold Sukh Trade India Ltd duped around Rs 203 crore from its 1.5 lakh investors and police have arrested 16 persons, including three directors, in this connection. The only question in the minds of the investors is that whether they are going to get their money back.

However police officials deny that it is not their work to return the money. Their duty is just to nab the criminals.

Likewise, another MLM firm, Eve Miracle Company duped 19 thousands investors of about Rs 145 crore. The company expanded its business in states of Maharahstra, Madhya Pradesh and Rajasthan, but the police were unaware of its activities. Recently, the Shyam Nagar police arrested Shivraj Sharma, director of the company. According to police, 14 kg of gold was also seized from the office of Eve Miracle.

In another case, Aditya Cosmos Pvt Ltd duped around Rs 19 crore from its investors and gold worth Rs 2 crore was seized from their officer. Company's two directors, Guru Baksha Singh and Ghanshyam Singh, were arrested earlier in the Gold Sukh case. Later, third director Guru Tej Singh was also arrested by the Vaishali Nagar Police.

Recently, another MLM firm Swarna Yug came under the scanner of the police. Before the arrest of company's directors Kamlesh Pareek and Pawan Pareek, they had amassed more than Rs 3 crore from its investors.

Another Sankalp Techno Trade Companies duped its investors on the pretext of buying them land at cheaper cost near Chaksu. Swarna Labh, an MLM firm on Tonk Road, also came under the scanner of the police. The Bajaj Nagar Police seized the documents of the company and investigation are on.

Ref: Daily Bhaskar

Investors petition Collector on MLM fraud

  Persons who had invested in a Coimbatore-based Multi Level Marketing (MLM) firm BirillacSolutions (P) Ltd. that promised heavy returns and monthly mobile recharge for a deposit of Rs. 500, petitioned the Collector here on Monday seeking action on the persons who cheated them and to help them get back the money.

One of the petitioners, S. Ashok Kumar of Erumapatty in Namakkal Taluk, told The Hindu that they petitioned the Superintendent of Police and Namakkal Sub Collector claiming that the accused – Subburayan, Head Constable in Tiruchengode Sub Division Camp Office and Mohanraj, a veterinary sales representative – had duped 260 persons to the tune of Rs. 1.93 lakh.

“More victims contacted us after seeing reports published in newspapers and now we have learnt that close to 40,000 persons in Tamil Nadu, Kerala, Maharashtra and Puducherry were cheated to the tune of nearly Rs. 2 crore”, Ashok said.

According to him nearly 20,000 of the victims are from Namakkal.

He claimed that the victims were cheated by the false promises made by the Namakkal heads of the firm by assuring attractive returns in the form of earning upto Rs. 2,000 per day in addition to free tours and other surprise gifts.

“They also gave us online receipts for our payments , but the websites has also been closed down now ”, he added.

Additional Superintendent of Police (PEW) T.P. Suresh Kumar, who received the petition during the grievances meet held at the District Collectorate, said that it has been forwarded to the Tiruchengode DSP A. Sujatha.

“We have asked her (DSP) to submit a report on the petition in a week's time, based on which action will be initiated”, he concluded.

‘Nearly 20,000 of the victims are from Namakkal'

Ref: The Hindu.

MLM fraud: Another shocker for Jaipurites

A multi-level marketing company, Avanee Trade Link Private Ltd allegedly duped its investors by offering high returns under the Jyoti Nagar Police station area on Tuesday.

A police official said that the police have received the complaints against the company's directors Kunal Ghai, Sammi Ghai and its officials Naveen,Vishnu and Dr Soni from four investors, Babu Lal, Radhe Shyam, Khayali Ram and Mohar Singh, that the company offered them high returns.

Later on, they did not give them the returns they had promised, the foursome alleged in their complaint.

As per the complaint, the accused offered the investors an interest of Rs 523 per month on an investment of Rs 5,000 and promised to pay Rs 4.44 lakh within 11 months if a sum of Rs 1 lakh is invested by them.

The complaint said due to tempting offers, the investors invested a certain amount, but the accused neither returned the principal amount nor paid the interest on the money invested.

The police official said the directors of the company have been arrested on the complaint of the investors and interrogation is underway.

The office of the accused has been raided and computers have been seized. Further investigations are on, he added.

Ref:

Money chain fraud: DGP

 The Kerala High Court on Wednesday directed the DGP to file a statement regarding the status of the investigation initiated against the multi-level marketing companies.
A Division Bench comprising Acting Chief Justice Manjula Chellur and Justice C N Ramachandran Nair issued the directive while considering a petition challenging the recent government order. The state had issued an order stating that genuine direct marketing should not be disturbed while investigating cases against money chain frauds. The petitioner alleged that the state passed the order with a malafide intention to protect the culprits in money chain cases.
The petitioner further submitted that the state had issued the order nullifying the penal provisions of Price Chits and Money Circulation Schemes (Banning) Act 1978 and added that the government failed to consider the fact that money chain and network marketing companies were doing illegal business without taking any proper licence from the sales tax department.
The petitioner said that as many as 1,000 cases have been registered across the state against Amway India Enterprises, RMP Infotect Private limited, DXN and Nano Excel company in connection with money chain fraud.  Additional Advocate General K A Jaleel informed that the state is against the fraud committed by the companies.
(Ref: http://ibnlive.in.com/news/money-chain-fraud-dgp-asked-to-file-statement/201097-60-116.html)

MONEY CIRCULATION & PREVENTIVE LAWS

MLM means Making of Lots of Money by unscrupulous entities.

Multilevel marketing (MLM) means Making of Lots of Money with other people's efforts and other people's money. Various High Courts in India slammed this business model and held that it is a fraud being pulled against people. Still, a number of companies have been thriving in our society and making a fast buck.
A score of companies have been playing havoc with the lives of people by snatching their hard-earned money.
It is high time that people should unite and stop the illegal business activities of these unscrupulous entities.

Amway's business model is illegal

Here is an e-mail reproduced here for the benefit of our valued readers.

"I too was brainwashed and lied to for two years. I lost many friends, some that I had known my whole life. I accumulated a mass amount of debt that I would tell myself would be paid when I went Diamond. Needless to say, I filed bankruptcy and my credit was screwed for several years. Financially, my life has never been the same. Before AMWAY, I was a 25-year old single dad earning handsome salary. Today I make just enough to get by and live a very simple life. My sponsor was a childhood friend who I still keep in touch with. Other Friendships were not so fortunate.

I would estimate that the whole Amway experience cost me several thousands in two years. Not to mentiion, the money I blew to try to impress people that I was on my way to financial freedom. What a joke! I applaud you for what you are doing!"

Amway apologists might say that he was a loser. But they refuse to accept that they are also losers. Like Teacher Nirmala's husband they too strongly believe that they are going to become rich even though they did not make any money since the beginning and nothing in near future.

Amway's business model is a money circulation scheme disguised in the name of selling products. It's a pyramid structure sales model which had already left several millions all over India and other countries penniless. But many victims prefer to remain silent for obvious reasons. That is the forte of this monster.

My appeal to fellow humans all over world is not to fall prey to the scheming business model of Amway.

Multi Level Marketing

Have you ever been in a situation when one of your friend, neighbor, or a relative elaborate about imported any product and pushed you to buy?


Also, he or she hard-pressed you to join in a group to make huge amount of money in short duration by paying a token amount. If so, you are a victim of Multi Level Marketing.


Multi Level Marketing is a method of selling products or services by joining persons in a chain method systematically by building in a pyramid or hierarchical manner.


All your desire to join the group of multi level marketing starts simply “to get rich by making easy money in a short time”. MLM appeals even lucrative to those who are greedy. Typically, MLM marketers reach to the people who are jobless, undereducated, and poor. Or who wants to become rich quickly “in any which way”, and the victim is doomed if they have a wide network of friends.


Mainly two types of people join multi level marketing schemes. First type wants to pursue it as full time job, taking it as their full time activity. Others enroll to the scheme to do in their free time as a part time activity.


People who are in the first type are generally poor, unemployed, and undereducated. They are mostly from villages, small towns without any proper exposure, as MLM companies also deliberately target this segments, as they are easy bait. They initially boost themselves that multi level marketing is a self-employment/ entrepreneurial opportunity to make easy money. However they don’t understand that Multi level marketing is a complex hierarchical system on which they have no control.

Multi level marketing is identified as illegal in many countries as exploiting human relationships. Still many multi level marketing organizations exist without making any contribution to the society.

One of the rules mentioned by FTC on multi level marketing is that sales made by MLM firms from non-distributors should be more that 70%. However, most MLM firms said they get only 18% business from non-distributors, which implies that all MLM firms are illegal.

In most cases, they buy the material provide by the MLM firms with a hope that they can make money in the near future. Soon they get to know that the sales they make becomes less than 5% of what they spend as an investment to do better sales.

How people are exploited?

In most cases, they buy the material provide by the MLM firms with a hope that they can make money in the near future. Soon they get to know that the sales they make becomes less than 5% of what they spend as an investment to do better sales.

With multi level marketing, many people are exploited, lost valuable time, deceived in order to create a long-term career. Multi level marketing created deep wounds and many people are exploited. Most of the people soon or later realize that it is not a career choice. When people eventually get out of multi level marketing they fully keep quiet. Even people around that person also keep quiet, as they know that he/she is a loser. This continues with thousands of people while the multi level marketers sell one success at the top since thousands of failures unseen.

Multi level marketing is a disease that reinforces the wrong beliefs about business. It is exploiting vulnerabilities in different socio-economic segments and creates deep wounds for people that take long while to recover from.

Avoid getting into Multi level marketing schemes. They are everywhere Amway, many insurance companies, health, and almost into every kind of category. If you are already involved, the sooner you realize the truth, the quicker you can reconcile in your life.

Kerala officials have been caught red handed helping 'MLM' racketeers

Kerala officials have been caught red handed helping 'MLM' racketeers

The bosses of the 'Amway' mob continue to behave as though the rest of the world is  too stupid, and/or lazy, and/or corrupt, to work out how their insidious racket functions.

The ongoing, extensive 'payment for legislation' racket that Jack Abramoff has admitted once being a part of  in Washington, and which he lately-condemns, is exactly the same as the one which is now evidently appearing in the Indian State of Kerala.

Abramoff has described how, just by introducing precise, but essentially meaningless, language into US federal legislation, it was possible to subvert the democratic process to the financial advantage of anyone who supplied him with piles of loot to bribe greedy US politicians and key members of their advisory staff, with valuable gifts and highly-paid job offers. These traitors to the American Republic, then unlawfully gave Abramoff a free-hand to write the legislation. Abramoff does not hide the alarming fact that he had significant influence in the offices of around one hundred key Washington legislators, and that his ambition had been to own all of them.

The available evidence strongly suggests that the 'Amway' bosses are currently attempting to buy  stupid, and/or lazy, and/or corrupt, key legislators in Kerala in order to try to continue to commit the same fraud which they have already paid stupid, and/or lazy, and/or corrupt, key Washington legislators to ignore.

The size, and duration, of this (still-largely hidden) scandal is absolutely without precedent, but where the Hell is the mainstream media?

Some more of the obvious questions I have, are:

-  What are the names of the Kerala officials who claim to have written the 'direct selling guidelines,'  but who obviously haven't written them at all?

-  What has been the exact nature of the relationship between these Kerala officials and persons representing 'Amway India Enterprises' from the so called 'Indian Direct Selling Association'  who have been allowed to draft these precise, but essentially meaningless,  'direct selling guidelines' to the financial advantage of the billionaire 'Amway' bosses in the USA?

- How can we get a rigorous corruption investigation started in Kerala? 

David Brear (copyright 2011)

MLM frauds exposed

   Even as the police are groping in the dark on how to tackle the mammoth statewide money-chain fraud and the DGP lamenting 'the police failed to monitor the activities of such companies', the real magnitude of the fraud is still unexposed. Though the DGP had assumed that the fraud involved about `1,000 crore, many point out that what is already exposed is just a tip of the iceberg. The police, under the leadership of two officials DySP Muhammed Shafi, Mananthavadi, and DySP P P Sadanandan (crime detachment), Vadakara, could successfully trace up to the top echelons of 'Bizarre' and 'Tycoon' companies, respectively. But, the rest and more influential MLM money chain groups are still untouched. The total amount poured into the 14 accounts of Bizarre alone is more than `120 crore, according to the police. "The Tycoons had a total of `415 crore in their 12 accounts of the Punjab National Bank, South Indian Bank and ICICI. The details of the accounts in State Bank of India and HDFC are yet to be received," says P P Sadanandan, DySP, Vadakara, who is investigating the case. "All the accounts have already been frozen," he said, adding that 'the police fPublish Postailed to nab the directors of the company as all the addresses given in the banks were fake.' "The total amount mobilised by the two companies alone is about `535 crore and with other companies the amount would cross `1000 crore," say the police officials. The total amount amassed by all other companies allegedly engaged in fraudulent financial activities including Goodway, RMP, PACL, Lakshya India, Aryaroop, Promo Kerala, Nano Excel and Way to Life is believed to be many folds higher than this. "Such companies are engaged in daylight looting and the operations of much influential companies like RMP are yet to be brought under the ambit of investigation," said prominent lawyer Adv P Chathukkutty, who is also the chairman of Malabar Devaswam Board."If the transactions of such companies with broader network and more lifespan are assessed, the total amount would be more than `1,500 crore," he said. Interestingly, the police charge cases against the culprits under the Prize Chits and Money Circulation Schemes Act. Why did the police fail to ensure rule of law until thousands fell in to the trap? Most of the police officials cite lack of complaints.