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Moneylife » Economy & Nation » MLM / Chain Money » QNet: The “money game” played by MLMs to lure the gullible

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

Sucheta Dalal and Yogesh Sapkale | 17/11/2012 02:38 PM | 

QNet, the controversial MLM company is luring executives and professionals by promising a weekly income of Rs27.7 lakh. Do the math… this is about the salary that Mukesh Ambani, one of India's highest paid CEOs earns. Yet, this patently exaggerated claim by QNet is ensnaring people to invest their hard-earned money on the fake promise of an enormous wealth. Meanwhile, the company seems to operating under several different names that are designed to hide a trail to its operations

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) and identities seems to be working on a clear plan to hide the trail of its Indian operations. Interestingly, worried investors and bloggers or those burned by the pyramid marketing business are doing an excellent job of tracking its operations and publicising them. Here are some such trails gathered through helpful bloggers like Sherwette Mansour from Egypt (http://joinnetworkmarketing.wordpress.com ).

 

According to Wikipedia, QNet’s business model has been described as a simple pyramid scheme, where initial entrants to the scheme do make money, but as the number of IRs increase, finding more independent representatives (IRs) becomes harder and harder, until those that join late are unable to recover even their initial outlay and the model collapses. QNet counters this explanation as offering a business opportunity that doesn't have the high cost of start up as a limiting factor. When an IR recommends the product, the customer makes a purchase through QNet’s online system and the IR receives a commission based upon QNet’s compensation plan.

 

The compensation plan operates by the recruitment of customers by the existing IR. An IR is provided with an ID that gives access to a “Tracking Centre” (TC) in its computer system through which the IR’s sales are tracked. A TC has a left and right customer group. Every customer owns a TC which is then placed on the left or right customer side of the IR’s TC. A ‘direct’ transaction (a customer’s personal reference or sale) is counted as one transaction. An “indirect transaction (someone in the customer’s TC buys/refers/sells) is also counted as one transaction. QNet pays $250 each time three product sales on an IR’s left customer group are matched by three product sales on the right,” says Wikipedia.

 

According to Mr Mansour, the blogger, if you are being paid for every six new people you recruit, by 13th level down you would exceed the population of Earth. He uses example of his home country Egypt. He says, “By level 11, you will exceed the population of Egypt. So, I am assuming that the business flourish and reaches level 10, which will have 60,466,176 (6.04 crore) people. Let’s assume that all these people will join the business, keeping aside the fact that Egypt is a POOR country and not everyone can pay an average of $1,000 to join the business. By level 9, the last level making profit in the country assuming everyone will join, an average of 60,466,176x$1,000 = $60,466,176,000 ($6,046.6 crore) is sent outside the country for all members in level 9 to make profit. Please do keep in mind that this number of people entering the business is almost impossible because a small percentage of Egyptians can actually afford to pay an average of $1,000 to join the ‘business’.”

 

To read more about QNet on our wesbite, click here.

 

Here are the repeat sales points (RSP) and its cash and business volume (BV) equivalents provided by QNet in its FAQs for India...
 

Image source-QNet FAQs for India

 

QNet says, its IRs can achieve rankings like Bronze Star, Silver Star, Gold Star, Platinum Star and Diamond Star, depending upon, how much he and his network or down lines sells.

 

Image source- QInfinite Compensation Plan for India

 

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, then please share it.

 

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. Here are the details mentioned in the frequently asked question (FAQ) section on QNet’s site…

 

Image source-QNet FAQs for India

 

QuestNet Enterprises was operating QNEI eStore, a platform from where IRs, which is how the investor-dealers of QNet are described, could place orders or buy products and also enrol new recruits. After launching Vihaan, the company asked all its old IRs to mandatorily register under the new business name in order to receive their commissions. It is pertinent to mention that the big crackdown on its operations also occurred in Chennai when QNet operated under the name GoldQuest and sold numismatic coins.

 

You may also be interested in reading about the many other MLM schemes that Moneylife covers. Click here to read about them.


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363 Comments
jitu moni

jitu moni 1 week ago

http://www.moneylife.in/article/qnet-mpi...
The special court has rejected anticipatory bail applications of two directors of Vihaan, Suresh Thimiri of Transview as well as Malcolm Desai and Michael Ferreira, the stakeholders of Vihaan that handles QNet's MLM operations in India

The special Maharashtra Protection of Interest of Depositors (MPID) Court on Tuesday rejected anticipatory bail applications of five accused in the multi-crore QNet scam. This includes, Srinivas Rao Vanka and Magaral Veervalli Balaji, both directors of Vihaan Direct selling (India) Pvt Ltd, Suresh Thimiri, director of Transview Enterprises India Pvt Ltd, Malcolm Nozer Desai, who is 20% stakeholder in Vihaan and Michael Joseph Ferreira, former world champion of billiards and 80% stakeholder in Vihaan.
The Economic Offences Wing (EOW) of Mumbai Police, which is probing the case, had invoked the stringent MPID Act against controversial multi-level marketing (MLM) company QNet, which has denied any wrongdoing on its part.

Transview Enterprises is an associate company of Vihaan Direct Selling Pvt Ltd that handles QNet's multi-level marketing (MLM) operations in India since 14 April 2012. Vihaan Direct Selling, in which Michael Ferreira, the former world billiards champion, owns 80% stake, is a direct selling agent of QNet and had done large financial transactions with Thimiri's company Transview.

The EOW had booked several accused including the former world champion of billiards and five companies related with QNet, under the MPID Act. This means all the cases against QNet, Vihaan and all those involved in the MLM scam would be heard before the special MPID Court. Until now, the accused were being investigated for cheating and forgery under the Prize, Chits and Money Circulation Schemes (Banning) Act 1978, and for money laundering by the Enforcement Directorate (ED).

In February 2014, the ED registered a case under the prevention of money laundering act (PMLA) against QNet, Vihaan Direct Selling, Ferreira and QNet founder Vijay Eswaran and three other independent representatives (IRs) of the MLM operator.
Gurupreet Singh Anand, a computer consultant from Lokhandawala, Andheri in his first information report (FIR) 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.”

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jitu moni

jitu moni 2 months ago

http://timesofindia.indiatimes.com/city/...
MUMBAI: Investors who lost their money in major scams and multi-level marketing's cheating cases can heave a sigh of relief now. The state government has appointed 49 new competent authorities (CAs) to take decision in as many as 101 cases regisered under the strinent law, The Maharashtra Protection of Interest of Depositors (MPID) Act. This will help to dispose of as much as Rs 10,000 crore of investors that is stuck in over a hundred cheating cases' legal battle.

Earlier, the city economic offences wing (EOW) had only two competent authorities. "CAs will proceed with the procedure of disposal of properties and realisation of money for repayment to the investors. It will expedite the process of recovery and will help the victims who have been cheated to get their money back," said Dhananajay Kamalamakr, joint commissioner of police and EOW chief.

The big cases where these CAs will focus first include the cheating cases incluidng National Spot Exchange Limited (NSEL), QNet, SpeakAsia, fixed deposit scam led by Sheesha lounge owner Mohammed Fasih and the Mumbai District Cooperative Bank. SpeakAsia alone has over 24 lakh investors. The money lost in this case is over Rs 2,276 crore while investors' over Rs 6,000 crore is stuck in the NSEL case.
TOI had on October 11, 2015 reported about that as many as 62 cases under the MPID act were pending in a city court due to non-appointment of a competent authority. While seized properties of the accused in all the above cases await disbursement among the victims, the city police has sent a proposal to the state for several amendments including the appointment of CA for a speedy return of public money, said police sources. More than Rs 10,000 crore public money is stuck in MPID cases in the city alone, they said.

"Earlier, non-appointment of competent authority defeated the objective of the enactment of the MPID Act," said an EOW officer. While an investigating officer probes the criminal part of a case, the civil aspects such as the attachment of properties, sale-realization of properties, and disbursement of sale proceeds to the victims are exclusively in the domain of the competent authority who is a revenue officer of deputy collector rank.

"It is observed that competent authority has been appointed in 23 cases in the city MPID cases earlier, notification of the properties in the official gazette is yet to be published. Hence, it would be better to have CAs with independent portfolio for MPID cases," said a senior IPS officer.

Major cases where the appointment of competent authority will give relief to investors:

· NSEL Rs 6,000 crore
· SpeakAsia Rs 2,276 crore
· QNet Rs 425 crore
· FD scam Rs 325 crore
· Mumbai District Cooperative Bank Rs 119 crore

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jitu moni

jitu moni 8 months ago

http://timesofindia.indiatimes.com/city/...

VIJAYAWADA: Yet another multi-level marketing (MLM) company Vihaan Direct Selling Ltd was sealed by police and its representatives were paraded before mediapersons here on Tuesday. Police will soon serve a notice on its promoters -- Vasudeva Reddy and Ch Gangadhar - who are currently in Dubai and alert the Interpol to help nab the duo.

Addressing a press conference here on Tuesday, commissioner of police A B Venkateswara Rao said that 134 people in the city have fallen prey to the company. "Vihaan Direct collected Rs 1.16 crore and deposited Rs 65 lakh in the account of Vihaan Direct Selling Ltd, which is based in Mumbai. Another Rs 10 lakh was deposited in the account of VR 1 Training Centre, which is based in Bangalore. Rest of the funds have been misappropriated," he said.

Acting on a complaint from a depositor Prathipathi Lakshmi Ganesh, Krishna Lanka police led by circle inspector S V V S Murthy arrested four representatives of the firm- Gourang Desai, Y Babul Reddy, D Nagaraju and Ch Manikanta -- on June 22 and recovered Rs 15 lakh in cash and four mobile phones.

It was on January 5 this year Mumbai-based Vasudeva Reddy, a notorious MLM agent, opened Vihaan Direct as a franchise of Hong Kong-based Q-Net near Prasanthi Hospital in Labbipet. He also ran a training centre called VR 1. City-lad Desai, who met Vasudeva in Mumbai, was nominated as in-charge of the training centre. Gangadhar, a close aide of Vasudava, was nominated to run the direct selling firm.

Gangadhar recruited Babul, Nagaraju and Manikanta as independent representatives (IRs) to carry out the fraudulent MLM operations. Their modus operandi was typical of a binary tree structure- each IR has to recruit more members. IRs will receive commission based on the number of referrals and sales volume of other IRs in their team.

The police commissioner said that Vijay Eswaran, who runs Q-Net, is the brain behind the MLM firms. "From 2002-08, he ran a firm in Chennai that swindled Rs 1,100 crore. Between 2010-14, he ran another MLM firm with Vasudeva Reddy, which swindled Rs 425 crore from depositors," he added.

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jitu moni

jitu moni 8 months ago

QNET multi-level marketing scam busted in Vijayawada - Tv9

https://http://www.youtube.com/watch?v=Plsdlh0FBkU

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jitu moni

jitu moni 8 months ago

http://www.business-standard.com/article...
Four persons have been held today for their alleged involvement in the multi-level marketing 'Qnet' case, police said.

The four persons, identified as V Bal Reddy, Gautam Desai, Dasari Nagaraju and Cheemakurti Manikanta, were arrested today and Rs 15 lakh, deposited in different bank accounts, were seized from them, district Police Commissioner A

B Venkateswara Rao said.

The accused were nabbed by Economic Offences wing of the Commissionarate and the key person involved in the alleged fraud, Gangadhar from Vijayawada, is absconding and is currently said to be in Dubai, the senior officer said.

The five persons were associated with multi-level international marketing firm Qnet, a company founded by one Vijay Eswaran, a Malaysian citizen based in Hong Kong, in 1998, where the company agents extracted huge money from people by offering them lucrative incentives, he said.

The company also operated in India with other names like 'Qen' and 'Quest, police said.

Eswaran had appointed one Vihan Direct Selling, owned by Gangadhar, as the sole selling company in India, where the firm had assigned some agents to recruit salesmen under the direct selling system.

According to police, the agents had appointed 134 first level salesmen by collecting Rs 1,16,55,000 and another 13,400 second level salesmen were joined by the 134 sales persons.

In the meantime, one of the salesmen suspected company's activities and lodged a complaint with the police and the four accused were arrested after investigations.

Rao said if necessary, a red corner notice will be issued against Gangadhar.

He said Qnet is facing many charges in the country and some of the cases against the company are pending in courts.

A decade back, the company was involved in a Rs 11 crore case of alleged fraud in Chennai. It has also been facing some cases in Mumbai, the officer said.

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