HYDERABAD: The Cyberabad Economic Offences Wing on Tuesday busted yet another money circulation scheme and arrested 58 persons working with multi-level marketing firm QNET for cheating customers across the country to the tune of Rs 7,000 crore.
“The company faces a number of cases across the country,” Cyberabad Police Commissioner VC Sajjanar said. As many as 14 cases have been booked against Vihaan Direct Selling Private Limited which works under the banner of QNET, a Hong Kong-based multi-level marketing company owned by QI Group. Thirty cases have been booked against QNET in Cyberabad. Telangana CID too is looking into eight cases filed against the MLM venture.
QNET recently began offering e-learning courses, but inquiries revealed none of the programmes are recognised by the government or affiliated to any university in India or abroad.
The arrested include 14 techies, private firm employees and unemployed youth and are from Karnataka, Gujarat, Delhi and Odisha. Police said the firm targeted unemployed youngsters and recent graduates in the city, mostly from the IT corridor. “Deposits in different bank accounts totalling Rs 2.7 crore have been frozen and a godown and an office in Bengaluru belonging to the agency have been cordoned off,” said Sajjanar.
QNET, which started off in Hong Kong in 1989 and has presence in 10 countries, set up ponzy and binary schemes in India through its franchise Vihaan Direct Selling with Dilipraj Pokkella and Mohd Imthiyaz as directors.
QNET lured customers promising high returns if they became a part of its businesses including but not limited to cost-optimization, health and wellness, watches and jewellery, personal care and beauty, tour and education. Once a new member joins the chain through a promoter, he becomes an independent representative and gets complimentary items. The promoter, in return, gets a commission. While top-level members get good returns, new members are left with nothing.
QNET claims to have a through-direct-selling-process business structure, but in direct sales, the person selling the product gets maximum commission and those above him get less. In pyramid and binary schemes, the primary seller does not receive any commission in the beginning, but as the chain grows under him, the commission he receives increases.
QNET got pulled up for fraud for the first time in India in 2003 in Mumbai, after which a series of cases have been registered against it in different parts of the country including Hyderabad. In 2016, Hyderabad Central Crime Station sleuths arrested former world billiards champion and Padma Shri awardee Michael Joseph Ferreira and two others — all then directors of Vihaan Direct Selling India — for fraud.Ferreira and the other accused were released on bail after the Supreme Court stayed all 19 cases registered against them.Those duped by QNET have formed an association in Mumbai and are fighting for justice.