Moneylife - Linkedin Moneylife - Facebook Moneylife - Twitter Moneylife - Youtube Moneylife Rss feed
close

Moneylife » Life » Public Interest » QNet: Mumbai police register fraud case against the MLM

QNet: Mumbai police register fraud case against the MLM

Moneylife Digital Team | 17/08/2013 01:10 PM | 

QNet, Vijay Eswaran, Qnet FIR, GoldQuest, QuestNet, QNet, QI Ltd, QI, ChiPendant,

EoW from Mumbai registered an FIR against QNet, the MLM company, for allegedly duping thousands by selling them plastic and glass products as miraculous objects

QNet, the controversial Hong Kong-based multi-level marketing (MLM) operator with multiple names (GoldQuest, QuestNet, QNet, QI Ltd and QI group are the better-known names) has finally come under the radar of Mumbai police.

 

According to a report in Times of India, the economic offenses wing (EoW) of Mumbai police has registered against QNet, for allegedly duping thousands of investors by selling them plastic and glass products terming them miraculous objects for treating severe diseases like Cancer.

 

"The firm (QNet) posed as a marketing firm which would sell bio-disc, watches, chiPendants, gold coins, herbal products, e-education packages and holiday packages. They even claimed that by using the bio disc one can cure cancer and brain related diseases," the report said quoting a police officer.

 

UPDATE: According to a report from Times of India, the EoW has arrested Bandra-based Manjunath Hegde for cheating in the QNet case. He was reminded to police custody till 22nd August. "Hegde, who is an advertiser by profession, was arrested from his Bandra residence. We searched his house and seized computer hard disc and several incriminating documents, which will be produced in the court. There are some payment/commission receipts among the documents," the report said quoting an investigator.

 

The complainant, Gurupreet Singh Anand, 40, a computer consultant from Lokhandawala, Andheri stated that his wife was duped for Rs30,000 by some people who had introduced themselves as the independent representatives (IRs) of QNet. Anand told the police, "They (IRs) had said that one of the bio-products my wife bought could be used to treat my 12-year-old son's brain related diseases".

 

The first information report (FIR) names five accused, including QNet's Hong Kong-based founder Dato Vijay Eswaran, a Malaysian by birth and an Indian by ethnicity, who is photographed hobnobbing with the Prince of Saudi Arabia, in order to enhance its credibility in the Gulf.
 

(Vijay Eswaran (circled), the founder of QNet along with Dev Wadhwani (in blue shirt), VP of QNet Source: facebook.com/QNETIndiaOfficial)

 

"One of the wanted accused Vijay Eswaran, had earlier floated two firms; Gold Quest and Quest Net Enterprises, in India and duped thousands of people. These two firms were also popular in Egypt, Afghanistan and Malaysia. We are trying to zero in on Eswaran and will soon arrest him," the newspaper said quoting the officer.

 

While QuestNet and GoldQuest, which mainly sold numismatic gold coins (they claimed they were limited edition coins that whose value would increase over time) in 2009 were forced to shut shop in India, their new avatar QNet offers a broader range of lifestyle ‘enhancing’ products (holiday packages, diamond watches, bio-discs, Chi-Pendants and herbal products for anything between Rs30,000 to Rs7 lakh), which promise fabulously high returns so long as new distributors are enrolled rapidly. Its product brochure says, “With 8 ways to earn and up to 50% of the sales paid out in commissions, QNET offers the most dynamic and innovative compensation plan in the direct selling profession.”

 

(Suresh Thimiri, MD & CEO, QNet India (circled) with Indian Tennis stars at the Davis Cup Source: facebook.com/QNETIndiaOfficial)

 

The last time around, QNet was being evangelised by former World Billiards champion Michael Ferriera, as well as some former international cricketers. QNet even sponsored the Indian tennis team for Davis Cup. This time, it is being hard-sold by senior corporate executives, including heads of multinational companies, who have been forced to quit in the 40s and 50s, having fallen off the career ladder. Moneylife has received emails from several worried readers asking us to bring the “QNet scam” to the attention of regulators before it dupes their friends and relatives already ensnared by the hard sell.

(Muttiah Muralitharan, the greatest Test match bowler from Sri Lanka at QNet event. During 2005, the GoldQuest scheme spread across Sri Lanka, marketing gold coins for double their worth. This forced the country to frame new law to ban MLMs, especially GoldQuest. Image Source: facebook.com/QNETIndiaOfficial )

 

Manoj Arora (name changed), a chartered accountant and management consultant tells us how he decided to string along a QNet ‘operative’ to understand its modus operandi which promises to make you a millionaire in two or three years.

 

He was scandalized at what he discovered and says, “QNet is just not about Amway-esque MLM but a Stockguru-type pyramid scheme. The premise is to get more and more people to invest Rs1 lakh to Rs6 lakh in an 'e-commerce' venture. They make you owners of QI group by selling three shares for every Rs1 lakh. How does that generate returns? The victims who are enrolled into the scheme, in turn hunt for newer victims to buy into the Ponzi. They are entitled to get 14% of share capital they or their victims raise. The scam is proliferating through social media like Linked-in to find newer targets. This reader had stored names and screenshots of people canvassing QNet from their profiles on Linked-in.

 

Well, the company had a chequered past. In 2008-09 it was making waves like it is today. At that time, it flaunted powerful political connections (at that time a GoldQuest executive, K Preetha had said that Nalini Chidambaram was a legal advisor. This was after we pointed out that the connection was highlighted at its meetings to recruit/ensnare new agents). However, QuestNet virtually folded-up after the Chennai police arrested several employees and the business was in complete disarray.

 

QNet claims that a Diamond Star can earn up to Rs27,73,800 (Rs27.7 lakh) per week while the same for a Platinum Star would be Rs22,39,050 (Rs22.4 lakh) a week. The money earned by a Diamond Star in QNet is almost the same that Mukesh Ambani of Reliance Industries (RIL), India's richest man as per the Forbes list, earns every week as salary (Mukesh Ambani forgoes Rs23.82 crore from his pay package ). We all have heard about Mr Ambani and his wealth. However, nobody knows how many Diamond or Platinum Stars are there in QNet's MLM network. If you know, please share it.

 

There are several people who are now demanding their money back from QNet. Few of them even posted such messages on QNet India's page on Facebook. On 20th May, Suryakant Kaushik, posted: "Even after a month of filing for the cancellation, I am still waiting for the refund. Adding to this, I have dialled the customer care numbers-+91 99 0006 3901 & +91 96 8668 9974.10-15 times a day but nobody responded. I am very frustrated by the way my case is handled. Never thought that the refund process could take more than a month and still nothing can be said about the status."

 

CA Abhishek Sahay wrote this message: "hi CHIEF Pathman...on 1st AUG 2013 I bought QVI Club membership from QNET for Rs2.61 Lakh and on 2nd August, I requested to cancel it and refund full amount, QNET official assured initially to refund full amount but now they are not responding my call or email. I request you to please look into the matter and get my full refund as soon as possible. My IRship is IN*****9 and email is a******4@gmail.com; Please do not let me feel cheated by your Company QNET. Please do not check my calmness. Refund my money ASAP."

 

Bala Kavassery posted this message: "I have been requesting since last 5 days with QNet support team India for cancellation of my IR IN*****4 and refund of vacation package ordered earlier. No support or response forthcoming till date. Once again request for my IR cancellation and refund of vacation package amount."

 

As Moneylife wrote earlier, Ashu Dutt, a well-known television journalist shared how he and his family became a victim of QNet. He said, "QI/ QNet/ QuestNet/ GoldQuest/ Faith Network is not just a fraud, but they lure women to break away from their families and then go after the family money. My own wife fell into this trap. Once this was done, they got her to put money from our house and relatives. Once they trap the women, they go after their wealth. My wife has now gone on to take over our assets by changing directors and doing all kinds of illegal corporate stuff guided by QI kingpins. This is my story. I can tell you that there are hundreds of Indian families that have been ruined by these people. In Mumbai, they use hypnotism and cult-like practices (wearing white clothes with blue pendants)."

 

In India, QNet’s MLM operations were controlled by QuestNet Enterprises (India) Pvt Ltd, a company registered at Chennai till 13 April 2012. From next day, it shifted all its registered agents, database and business to Vihaan Direct Selling Pvt Ltd, company registered in Bengaluru.

 

Moneylife has done extensive work on all MLMs and come to the conclusion that all of them fall foul of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.  We have also made representations to the Prime Minister’s office to ban MLMs altogether or allow them to operate under a clear regulatory framework under a designated regulator.

 

Today, while tens of thousands MLMs and Ponzis are cheating people no ministry or regulator is in charge. The ministry of corporate affairs (MCA) does not even require these companies to be incorporated in India. This ludicrous situation persists at a time when there is such heated debate about legitimate foreign direct investment in retail and insurance.

 

You may also want to read...

QNet, the MLM has resurfaced in India; will people be duped again?

 

QNet, the MLM company, has no answers to Moneylife’s simple questions

 

QNet: The “money game” played by MLMs to lure the gullible

 

Forbes magazine's strange activism on behalf of the shady MLM QNet

 

MMM India, QNet ‘cult’ growing. Why government is dragging its feet in tackling this MLM menace?

 


Post Comment

More in Moneylife

VIDEOS

Moneylife Foundation launches Legal Helpline and Resource Centre

LATEST COMMENT

jitu moni

MORE

Supreme Court asks BCCI to probe IPL case Moneylife Digital Team

Energy drinks allowed to increase caffeine content to ‘dangerous’ level Moneylife Digital Team

Comment

1218 Comments
jitu moni

jitu moni 2 hours ago

http://www.hyderabadpolice.gov.in/Frauds...

Money Circulation Schemes, Direct Marketing, Multi-Level Marketing Schemes, Network Marketing


Money Circulation Schemes are being promoted in the name of Direct marketing (DM), Multi-Level Marketing schemes (MLM), Network marketing (NWM), Referral Marketing, Introduction Marketing, Chain Marketing etc.


These schemes are nothing but camouflaged Money Circulation Schemes. In the front end the promoters display products and services at the back end it is nothing but Money Circulation Schemes banned under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act 1978.


To divert the attention of the public as well as the Law Enforcement Agencies and to cover up their illegal activity of Money Circulation Schemes they display products and services.


Product is only a bait but end result is Money Circulation Scheme


Money Circulation Scheme means any scheme by whatever name called where in the person has to enroll into the scheme through a already enrolled member by subscribing to the scheme by paying initial kit / member ship amount and purchasing goods and services, where in by this the introducer of the enrolled member will get benefits (easy money) and the company which promotes the scheme earns quick money. The enrolled member again has to enroll further members to get his amount back and also the benefits. By this the promoter of the company by just promoting the scheme gets benefits and the person who enrolls at the initial of the scheme reaps the benefits.


By enrollment into such scheme one would be getting back the initial paid investment and keep gaining financially by enrolling new members. So also, the second set of enrollers keep multiplying and gain financially, fascinating every onlooker to get engrossed into such dubious money circulation schemes. Such a system of chain to work endlessly to provide profit to everyone concerned would ultimately breakdown at some stage, resulting the financial benefit to some who joined the scheme at initial stages (they will be none than the promoters of the scheme), resulting in big financial loss to those who joined at a later stage. When a person fails to get his required clients or non-viability of the scheme but blame it as one’s personal failure. The gullible people are taken unaware when the real failure. The gullible people are taken unaware when the real picture of the money circulation schemes emerges. By the time the people realize that they were taken for a ride and cheated, it would be too late.


The promoters to promote their schemes through high profile campaign by using film stars, Government servants, Doctors, Engineers and well known personalities of the society in their meetings which are conducted in star hotels, Kalyanamandapams etc., with lot of fan fare. Public should refrain from attending such meetings.


Promoters of the scheme float their companies with attractive names like “Wonder World Co.” “Miracle Co” “Japan Life India” "Amway” “Gold Quest” “Ayerveda Life” “Herb Life” “Happy Life Co” “Magic Co.” “Nice Co.” “Mega Co.”, “eBIZ” etc.


They give attractive names to the enrolled members depending upon their enrollment like with attractive and stylish titles as “Silver member, Gold member, Diamond members, Platinum member, so on and so forth. They also call them as “Master Distributor, Super Distributor, Double Super Distributor etc,”, etc


They also use attractive slogans like “ Earn in rupees or dollars. Work from home ” “ Work four hours and earn Rs., 50,000 per month ” “ U R the boss of your business, so enroll immediately” “ Earn up to Rs.35,000/- + Monthly by just working 2 hours at home ” “ Do u want to earn extra by sitting at Home? The contact us ” “ Your pathway to Heaven ” “ Enroll with us for Healthy and Wealth life ” “ Do u want to lose your weight, then contact us ” etc.


These companies win over confidence of the members (victims) and maintain their image as charitable and benevolent, by offering donations to charitable, social and service oriented institutions by attracting publications, photographs of VVIP’s donating cheques. Likewise, they boost their image in a corporate style and try to gain mileage.


A single company will launch many sister companies to fool public as if to show that they are big group of companies. A single company renamed many a time attracts people of different places, takes its chameleon stride through colorful gifts, brochures, under case of cheating. Likewise, all innovative methods are put action to successfully grow them well and make money for themselves causing irreparable financial loss to the general public and society.


These companies results in exploitation of personal influence of each and every distributor or his close relative. If a Superior officer or his ward involved in MLM, the subordinates are forced to become members in the chain. Likewise if a close friend comes with a scheme, one finds it difficult to say “No” and if all the above get cheated also but they refrain from complaining to Police only to save their relationship/friendship.
BEWARE…!
If your close relative, friend, neighbor or your superior or colleague approaches you with a product / service which involves enrollment and further enrollment of members and meetings at high profile places / kitty parties then it is nothing but Money Circulation Scheme banned under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act 1978.
The appeal to the public to not to enroll themselves into Multi Level Marketing Companies, Money Circulation Schemes, Network Marketing Companies and other such companies and such schemes and get cheated.
MLM schemes destroy the well knitted social fabric of our Indian society and make your house as well as your neighborhood a market.
It is an appeal seeking your co-operation with the Investigating Agencies to curb such menace and nip it in the bud before it engulfs the gullible Public.

Reply »Link » Report abuse
X
jitu moni

jitu moni 5 days ago

http://pib.nic.in/newsite/PrintRelease.a...

Press Information Bureau
Government of India
Ministry of Corporate Affairs
30-April-2013 17:52 IST

Curb on Fraudulent Mlm Companies

Multi Level Marketing (MLM) Schemes involving enrollment of a vertical chain of investors/agents constitute “Money Circulation” and are banned under the Prize Chits & Money Circulation (Schemes)Banning Act, 1978 which is implemented by the States. Giving this information in written reply to a question in the Rajya Sabha, Shri Sachin Pilot, Minister of Corporate Affairs, said that in order to facilitate effective control of MLM, a Group of Officers from Ministries of Finance, Corporate Affairs & Consumer Affairs along with representatives of Reserve Bank of India, Central Economic Intelligence Bureau (CEIB) and the Serious Fraud Investigation Office (SFIO) have prepared Model Rules called Money Circulation Scheme (Banning) Rules, to explicitly cover MLM under the said Act. Ministry of Finance (Department of Financial Services) has sent the rules for notification to the States.

Reply »Link » Report abuse
X
jitu moni

jitu moni 1 week ago

http://www.moneylife.in/article/qnet-eow...

QNet: EOW seizes documents from Vanmala's 'hidden' office

Moneylife Digital Team | 12/04/2014 06:13 PM |

After being named as accused in the Rs425 crore QNet scam, Vanmala shifted its office to undisclosed location. However, the EOW raided this secret hideout and seized important documents about the MLM operations of QNet

Economic Offences Wing (EOW) of Mumbai Police has raided a little known or 'hidden' office of Vanamala Hotels, Travels & Tourism Services Pvt Ltd, an associate of QNet India. The EOW has seized documents and computers used by Vanmala related with its vacation holiday packages sold to customers of QNet in India, say sources.

Vanamala had its office at Trade Centre in Bandra Kurla Complex (BKC). However, the tourism services provider shifted its office to an unknown location when it was named as an accused in the first information report in the Rs425 crore QNet multi-level marketing (MLM) scam.

Vanmala shifted its office to Lower Parel from BKC. However it kept the new address hidden even from its submissions in the court. Daryl Patrick Bisset, the chief executive of Vanmala has been found avoiding EOW and not forthcoming since past few months, the sources added.

During the investigation into the QNet scam, it was revealed that majority of the victims across the country were sold the "Holiday & Vacation Packages" from Vanmala.

In February 2014, the Enforcement Directorate (ED), the agency responsible for enforcing economic laws and fighting economic crime in India, registered a case in the Rs425 crore QNet scam for money laundering.

The ED has named QNet Ltd from Hong Kong, its official franchisee Vihaan Direct Selling Pvt Ltd, Vijay Eswaran, the founder of QI group and three other independent representatives (IRs) of QNet from Mumbai.

In a media statement, QNET called the money-laundering probe by ED against it as 'allegations that are preposterous and completely baseless'.

Reply »Link » Report abuse
X
gurupreet

gurupreet 1 week ago

Vanamala/QNET runs away from Mumbai...

This is the message that was posted on http://www.vanamala-india.com recently...

Dear Members,

Due to service disruptions on our current hotlines, please refer to the following number should you have any queries: 0008006001144 or email us at customercare@vanamala-india.com

We apologize for any inconvenience.

Is it a 'Simple" Disruption or there is more then meets the eye..The truth is their offices were raided by the EOW..effectively shutting down the whole operations of Vanamala in Mumbai.

The last time this message was posted after Vanamala's Payment gateways were blocked..

Important Announcement regarding Payment Gateway - INR Payments
Dear members,

We are experiencing problems with our Payment Gateway system. As such, please refrain from using it with immediate effect.

To know the alternate modes of payment you can use, please contact our Customer Experience Ambassadors at
+91-22-6139-9500 and they will assist you accordingly. Thank you.

The above mentioned PRI Line number +91-22-6139-9500 has also become un-operational

How good these white collared criminals are at sugar coating the real truth...Raids become "disruptions"...blocking becomes "problems"...shame on you all white collared criminals, you all should be tried for treason for your anti national activities.

Reply »Link » Report abuse
X
gurupreet

gurupreet 1 week ago

Cheap Pathman said in his video message to India.."We shook hands with the right people in India"

Wouldn't it be FUN exposing these "Right People" ;)

hehe

Reply »Link » Report abuse
X
Daily Newsletter

1,00,000 Readers

Follow Moneylife
DNL facebook icon DNL linked in icon DNL twitter icon DNL youtube icon DNL rss icon
Moneylife Magazine

What's your say?

With the Supreme Court ruling, do you think the govt should scrap its Aadhaar project?
Yes
No
Can't Say
 
Enter Code : secure code
    change code
VOTE

What you said

Who will be the next PM of India?

Thanks for casting your votes! View Previous Polls