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More Sajjanars, Raghuram Reddys, Jayanths, Valsans are needed to tackle crooks

May 31, 2013, 11:57 pm
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For the first time in the long history of Amway which boasts of its presence in over 60 countries, one IPS officer filed a criminal case against the company for its fraudulent activities. He is none other than V C Sajjanar. Many people wrongly believed that he was against only Amway. In fact, first he broke the back of a product-based money circulation company, Japan Life which duped millions all over the country.
He faced severe criticism and rebuke from his colleagues and politicians at national level. A top opposition leader has brought tremendous pressure on the honest and upright police officer Sajjanar to drop the case against Japan Life. However, he did not relent and pursued the case to take it to its logical end.
Then only he studied the business model of Amway India Enterprises to convince himself whether it is a money circulation scheme or not. After he was convinced he went ahead against the company all over the State as the head of Economic Offences Wing of the CID, Andhra Pradesh. However, he has succeeded in exposing its dubious nature of business model in spite of pressure from many a quarter.
He roped in the victims of Amway in the fight against the global giant which has billions of dollars in its kitty to fight back.  He has succeeded in convincing the Indian judiciary that the business model of Amway is nothing but a banned activity under the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978.
The landmark in this case is the judgement of Andhra Pradesh High Court. The State’s highest court unequivocally and unambiguously stated in its judgement that the Amway India is making easy and quick money in the name of its business model. Not only that the High Court has described the business model, “It is, thus, evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme.  By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money.”
So it is proved beyond reasonable doubt that the company was making easy and quick money which is the main ingredient in the PCMCS Act, 1978. This is not a small achievement to fight against an MNC which could hire the most brilliant lawyers like Soli Sorabjee to argue on its behalf.
Sajjanar was also quick to react when a criminal case was filed against GoldQuest International which promised easy and quick money to its members. Though the case was later transferred to the CID of Andhra Pradesh, he built a case and brought the top brass of the company except Eswaran to the smallest police station in the State for interrogation. Here too he faced tremendous pressure but did not give up.
Dr Kolli Raghuram Reddy, superintendent of police of Prakasam district is another upright police officer to tackle the white collar offenders with an iron hand. He effectively closed down various small and medium crooks who amassed crores of rupees collected from the gullible. He never bowed down to the pressure from various quarters. His uprightness did not give a chance to anyone even to think of approaching him to influence.
The maximum pressure he experienced was while handling the NMart Retail owned by Gopal Mohan Singh Shekhawat of Surat. It was a challenging task for any police officer. He did not mince words to call spade a spade.
Dr Raghuram Reddy has taken lot of pains to arrest the accused in the NMart fraud. It was not an easy task. Gopal Shekhawat has already amassed several hundreds of crores of rupees from the public and out to purchase anyone who crosses his path. In spite of the pressure from various quarters he did not budge. Gopal Shekhawat is such an arrogant person, he believed that he could do anything with money. He jumped the bail and never reported to the court. He allegedly ‘purchased’ the anticipatory bail from a court. Later, the Andhra Pradesh High Court cancelled that bail. By braving a lot of pressure from the powers-that-be, Dr Raghuram Reddy brought the accused Gopal Shekhawat to Ongole and put him behind bars.
We need such officers who do not budge to anything but to the law of the land.
Jayanath Jayanthan is another tiger. He went after several white collar offenders before chasing the multinational criminal company Amway India. Without bothering the bickering, Jayanath, popularly known as JJ, raided the godowns of Amway and seized products worth Rs. 2.5 crore and booked the higher-ups of the Amway India. Though he was asked to take care of some other important issues, he did not leave the trail.
Valsan, the SP of Economic Offences Wing of CID of Kerala, who has been handed over the Amway India criminal case, has taken the case to its logical conclusion by arresting the honchos of Amway India. Probably, he might have gone through the tremendous pressure in discharging his duties.
We need more such daredevil officers to uphold the law of the land.
We, the members of Corporate Frauds Watch, salute the heroes.
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Amway India chief, two others arrested under PCMCS Act. What about other MLMs?

June 2, 2013, 9:28 pm
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(http://www.moneylife.in/article/amway-india-chief-two-others-arrested-under-
pcmcs-act-what-about-other-mlms/32894.html)

Kerala, the first state to tighten guidelines on multi-level marketing companies, has cracked the whip on Amway, which is among the first multinational direct marketing companies to enter India in the 1990s. What does the Kerala action mean for other chain-schemes such as QNET and others, which have far more dodgy antecedents?
Crime Branch officials of the Kerala police arrested Amway India’s managing director and chief executive William Scott Pinckney and two directors, Anshu Budhraja and Sanjay Malhotra of the multi-level marketing (MLM) company for alleged money laundering and breach of trust. The arrests were made under the Prize Chits and Money Circulation Schemes (Banning) Act 1978 (PCMCS Act), which only goes to prove that the Act is not as toothless as various state governments have liked to claim. Moneylife and Moneylife Foundation have always said that Amway and several other multinational chain-schemes do fall foul of the PCMCS Act and there are clear high court judgements to this effect. 
Last month, after the collapse of Saradha group, the ministry of corporate affairs (MCA), in a face saving measure, has decided to hand over probe of such chit-fund, MLM, Ponzi and pyramid scheme operators to the Serious Fraud Investigations Office (SFIO). The ministry said the probe has been ordered in view of a larger public 
interest involved in the issues, although the state governments are the appropriate authorities for regulation of such chit fund companies and schemes under the Chit Fund Act, 1982. Since then dozens of schemes in Kolkata, which claimed to be chit funds have collapsed. Over 18 people have committed suicide out of despair over the loss of their life savings in Saradha alone. 
Interestingly, the PCMCS Act, 1978, was promulgated only after large-scale loot by these dubious companies and a report by the James Raj Committee (1974) called for a total ban on such schemes arguing that they were prejudicial to public interest. 
Over the past 35 years, the Prize Chits Act has been rendered ineffectual because of the refusal by state police to act quickly enough—the only exceptions to this have been exceptional police officers like VC Sajjanar from Andhra Pradesh (AP) and sporadic action in Kerala.
The fact is there has been plenty of litigation on the issue, precisely because various authorities consider that the operations are illegal under the PCMCS Act of 1978. Moneylife Foundation, an NGO working towards spreading financial literacy, has repeatedly warned people about falling for MLM and pyramid companies with innumerable examples of losses incurred. Moneylife Foundation sent a representation to the prime minister, finance minister, governor of RBI and SEBI.
A set of powerful MLMs, which are part of an exclusive closed club, called the Indian Direct Selling Association or IDSA (on the lines of the Direct Selling Association of the US) has been lobbying hard to make a distinction between their operations and those of others, who they call, fly-by-night operators such as Speak Asia and Ad Magnet. In fact, the tens of thousands Ponzi/double-your-money schemes that exploit poor financial literacy cause the biggest losses to Indians across the economic spectrum today.
Amway can be at best a source of pocket money Senior Amway representatives had met Moneylife to clarify their views on Amway. 
Richard N Holwill and Rajat Banerjee , who met us, admitted that although some distributors tend to go overboard in pitching the scheme, income from being a distributor of Amway can, at best, be a source of additional income or pocket money for most people. It is not the pathway to riches as MLM companies make it out to be. However, Amway also insisted that there is no longer any joining fee and the model does not necessarily require enrolment of distributors. However, there was no answer to expensive nutraceuticals being prescribed by doctors, whose 
wives or relatives were Amway agents.
In India, AP was the first state to enact a law to ban money circulation schemes in 1965. Both the Supreme Court and several high courts have passed landmark judgements against the operation of these schemes as they violate the law of the land and are detrimental to the interests of the public. There are on-going cases 
against Speak Asia and Amway, to cite two examples.
After the decision of AP High Court, a spokesperson for Amway India had said that 
the company had filed a special leave petition (SLP) before the Supreme Court. 
The HC in its ruling observed that the company's business model may come within 
the mischief of money circulation scheme under the PCMCS Act.

VC Sajjanar, a former superintendent of police, Economic Offenses Wing, Andhra 
Pradesh, who was involved in the investigation of Amway, said this (the comment of 
the spokesperson) was nothing but a propaganda used by the company to continue its 
MLM operations. “Section 3 of the PCMCS Act prohibits any entity from promoting, 
conducting any prize chit or money circulation scheme, enrolling any member of any 
such chit or scheme, or participating in it otherwise, or from receiving or 
remitting any money in pursuance of such chit or scheme. This is the provision we 
used to ban Japan Life, Amway and GoldQuest,” said the officer, who is now DIG at 
Hyderabad.

Moneylife has been writing about the menace of MLM schemes, including GoldQuest, 
QuestNet, Stockguru.India, Japan Life, Amway, Speak Asia, NMart, AdMatrix and so 
on. On the other hand Moneylife Foundation is helping people to become aware about 
money circulation or MLM schemes and is actively involved in making changes in the 
government policies through representations, memorandums etc.

Moneylife had been the first to flag Speak Asia as a fraud, way back in October 
2010. In December 2010, Moneylife had reported about the dubious modus operandi of 
Stockguru.India and advised investors to stay away from investing in the company. 
It collapsed much later. Similarly, in August 2011, we informed our readers, how 
Surat-based NMart Retails, a division of Newlook Multitrade Pvt Ltd, is running a 
collective investment scheme (CIS) based on MLM model, under the guise of selling 
products through its retail chain. Needless to say all the three mentioned above duped lakhs of people. There are scores of other such examples.
EAS Sarma, former secretary to the Government of India (GoI), has written several letters to the prime minister, ministry of corporate affairs, ministry of finance, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and others, on MLM menace.
“Many of these (MLM) companies are not even registered under the Companies Act. Even those registered evade regulation. Those booked regroup under different names and continue to cheat the people. All these companies and those that promote them should be dealt with an iron hand and be prosecuted effectively,” he said.
Kerala, said to be the country’s most literate state, is flooded with numerous “get-rich-quick” or “earn-huge-return” schemes offered by money swindlers. While the state director general of police has admitted noticing frauds amounting to over Rs1,000 crore, the worrying factor is that even a few policemen have been found to be involved in these MLM schemes.
The Kerala police have also warned hotels, restaurants and convention centres across the state, not to allow money-chain companies to hold any meetings on their premises.
MLMs, chain companies or networking companies—also known as chit funds or blade companies—have turned very powerful in several states, which are ruled by regional parties and have strong political connections. Their political funding protects them from any action. Also, as Mr Sarma has pointed out, “Many of these promoters 
have political links and they approach various ministries in the guise of marketing companies and make overtures to protect themselves. They know that they can play one ministry against the other and get away with their loot.”
Independent regulators are all IAS officers who owe their jobs to being compliant or their willingness to act as hatchet persons for politicians (barring the singular exception of Vinod Rai as Comptroller & Auditor General of India, (CAG). 
Nobody in the system is under pressure to prevent wrongdoing; hence, no regulator, bank chairman or union minister has lost his job in the past 20 years, despite the sharp increase in the size and number of scams. If this is true of massive scams and misappropriation of funds unearthed by the CAG (2G, coalgate, irrigation, 
aviation, mining, defence procurement, disbursement of government subsidies, etc), where is the question of holding anyone accountable for failing to go after MLMs, Ponzis and chit funds?
Remember, Saradha chit fund from West Bengal? Millions of people were connected to the chain-money or chit fund companies in West Bengal. These created the wrong kind of jobs and dubious economic growth, which is under threat with no new businesses coming up and chit funds unravelling.
There are more than 50 major schemes operating in the eastern India, commonly called chit funds, but really in the 'business' of paying old deposits with the new ones, thriving on the potent cocktail of illiteracy, greed and regulatory inaction. There are a few thousand smaller schemes that are also conning people with the same modus operandi. And, they are now imploding.
After the Saradha case blew up mid-April, the flow of money has completely stopped. The collapse of Saradha, with ostensible businesses in automobiles, cement, media etc., has claimed several lives.
The media too will be deprived of an important source of revenue. The Bengali print and TV media and the hoardings, thrived on advertisements from Rose Valley and MPS Greenery. Rose Valley has set up its own TV channel now but continues to advertise in popular media outlets like ABP’s Ananda channel. In a last burst of 
that cosy relationship, the print media is now getting huge ads from the surviving several chain-money schemes which are asserting that they are different from Saradha.
While the RBI has maintained that the deposit-taking companies does not fall under its jurisdiction, market regulator SEBI tried to rein in such companies in the past under its collective investment schemes (CIS) regulations. However, these companies managed to subvert the SEBI orders and continued to flourish with 
political patronage.
Another interesting aspect of all deposit-taking companies is the source of money. Nobody knew exactly where the money was coming from for these companies, but everybody suspected that it was some kind of a pyramid marketing scheme, made infamous 30 years ago by the failed Sanchaita Investments. Sanchaita Investments 
went bust in 1980s leaving behind a long trail of ruin and suicides by number of agents and depositors in West Bengal.
So far, all deposit-taking companies, chit funds and CIS operators have received patronage from politicians across the party lines. Especially in West Bengal, the ruler got changed but patronage has remained the same. The CID and state finance department officials had once raided Rose Valley’s office in Tripura, but to everyone's surprise, no arrests were made. Many people had attributed the outcome to Rose Valley's cosy relations with the Left Front.
The Saradha group is reportedly known to be close to Trinamool Congress leaders and the government.
According to Robert FitzPatrick, President of US-based Pyramid Scheme Alert, schemes like Amway, QNet or GoldQuest are an “endless chain”, or a “pyramid scheme”.
“I believe this form of fraud is a clear danger to national economies. They subvert efforts to accumulate wealth. They divert energy and funds from real businesses. They often divert people from seeking more education with their promises of fast wealth. They destroy savings and equity of lower income people. They confuse people as to what a legitimate value-based business is. Unless the regulators and analysts recognize and are willing to assert that this form of business is ‘inherently’ fraudulent and harmful, it is rather difficult to stop any one particular company. Such a fraud, whether the products are soaps, gold coins, vitamins or air in a box, will always cause 90%-99% of the investors to ‘fail’. Whether some of the people engage in retail selling or not, the income 
promise that relies on continued expansion is deceptive, that is, it is a lie. The financial harm to the vast majority is predetermined. Calling it a business does not make it so. A real business requires an exchange of value,” wrote Mr FitzPatrick to us. He is actively exposing several pyramid, Ponzi and MLMs.
Here are some of the important stories written and representations made by Moneylife over the years…
Moneylife Foundation’s representation to PM, FM and RBI on MLM schemes In May 2011, following the exposé by Moneylife on Speak Asia Online Pte Ltd and its MLM scheme, Moneylife Foundation sent a representation to prime minister Dr Manmohan Singh, (the then) finance minister Pranab Mukherjee, finance secretary Sushama Nath and Reserve Bank of India (RBI) governor D Subbarao urging them to  ban all MLM companies and their schemes in the country, or to bring all MLM companies under the regulation of either the RBI or the Securities and Exchange Board of India (SEBI), to stop them ensnaring gullible people.
West Bengal’s ‘chit fund’ mess and inaction of MCA The massive money, which is raised surely shows somewhere on the balance sheet of  the company, filed regularly with the MCA. The primary recipient of the 
information about these companies is the MCA, and surprisingly the MCA is the least proactive in the entire process of bringing these perpetrators to regulatory focus, sooner before tonnes of money vanish.
Chain Game
Dubious pyramid schemes or money-circulation schemes are looting Indians across economic strata, finds Sucheta Dalal. This will continue since Central and state governments seem unconcerned.
Pyramid schemes: Daylight robbery
Pyramid marketing companies are looting the public easily, while the government watches. Many countries have banned them outright.
Ponzi Scheme: Is RBI Passing the Buck?
A strange deposit scheme that is proliferating in the states of Orissa, Chhattisgarh, Karnataka and Maharashtra has already collected almost Rs1,000 crore and is expanding virtually unchecked. The scam has elements of money-laundering and possibly the use of fake and forged currency as well; however, the banking regulator would like to pass off the investigation to the respective state governments for investigation under the antiquated Prize Chits and Money Circulation Schemes (Banning) Act.
Coin Game
An international network marketing scheme hawking expensive limited edition coins is attracting a huge following. Sucheta Dalal examines this strange quest.
Ponzi schemes: Free for all
Moneylife readers know how MLM schemes ensnare lakhs of people by promising extraordinary returns. We learn from the ministry of consumer affairs that the government is now waking up to the need for better regulation of MLMs and Ponzis. At the same time, the powerful Direct Selling Association of the US is lobbying 
hard for an amendment. 
‘Beware of deception by pyramid schemes, MLMs trying to lure people with promise of high returns’
Pyramids are pure fraud. Their business is unsustainable-they promise payment for goods or services of dubious value. The hallmark of these schemes is the promise of sky-high returns in a short period of time, for doing nothing other than simply handing over your money to them, and getting others to do the same.
Ponzi schemes: The fraudulent art of chain game
Even as India bans pyramid schemes under a statute called the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, the country continues to be a happy hunting ground for pyramids because our legislation is deliberately unworkable.
Dubious Ponzi & MLM Schemes
Investors losing money, or falling for dubious Ponzi schemes, is not a recent phenomenon; this has been happening for decades and it is not restricted only to India. Why is it that people repeatedly fall prey to such schemes in spite of being aware of the frauds perpetrated by conmen under different guises?

Set up inter-departmental group to curb MLMs
EAS Sarma, former power and finance secretary, said the ministry of finance, RBI, SEBI, and the investigating agencies should collectively tackle this problem without any delay, as every day of procrastination will only result in thousands of hapless families cheated by the promoters of these schemes.
How MLMs wave an annulled letter to claim legitimacy of their operations and con people
Spokespersons and dealers of MLM schemes or network marketing schemes respond to questions about their legitimacy by brandishing a 2003 letter issued by the then secretary, ministry of corporate affairs (MCA). What they omit to mention is that the letter was subsequently annulled following complaints about its misuse. This 
means, the letter used by these scamsters is no more valid.
Pyramid and MLM schemes are scourge on people
While there are existing laws such as Indian Penal Code (IPC), the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (PCMCS Act) and others under which concerned agencies could prosecute the culprits, there is no effective mechanism in place to ensure a coordinated approach to identify the fraudulent operators in 
advance and book them well before they destroy the livelihoods of thousands of households and launder the ill-gotten funds to unknown destinations.
MLMs now want to ‘invest’ money in India, really?
A set of powerful MLMs, which are part of an exclusive closed club, called the Indian Direct Selling Association or IDSA (on the lines of the Direct Selling Association of the US) has been lobbying hard to make a distinction between their operations and those of others, who they call, fly-by-night operators such as SpeakAsia and Ad Magnet.
QNet, the MLM company, has no answers to Moneylife’s simple questions
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) refused to answer simple questions like how much money their independent representative (IR) earns on an average every month and why their products are priced so highly. Instead, it sent us a threatening and defamatory mail that raises more questions as to their real motive.
2011: A year dedicated to MLM and Ponzi scheme frauds
If 2010 was the year of great Indian scams, 2011 was rather of Ponzi and MLM frauds. SpeakAsia managed to top the chart, but soon many others joined the bandwagon, duping gullible investors for several thousand crores.
How to avoid 'get-rich-quick' schemes and scams
Nothing comes free in this world, especially money. The universal truth is you need to earn your money by hard labour all the time and there are no shortcuts to double it in the shortest span of time. Therefore, even if your near and dear ones tell you he/she will double, triple, quadruple your money within a few days/months, politely reply to them that it is not possible and what they are advocating is a pure “get-rich-quick” type of scam.
Herbalife is a pyramid scheme worth zero dollars: Bill Ackman
Herbalife, a global MLM scheme also prevalent in India, is believed to be worthless according to hedge fund manager Bill Ackman, who made a detailed presentation on why consumers should avoid buying the company’s products and stay away from the MLM.
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A Long Chain Of Infamy Amway, and its can of crooked worms

June 2, 2013, 9:42 pm
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PRAGYA SINGH

A Soup Gone Sour

*Crackdown on multi-level marketing in Kerala and AP *Kerala investigators says MLMs like Amway are a “fraud”.
*AP police cautions public against investing in “illegal” Amway. *Andhra HC dismissed 18 writs filed by multi-level marketing firms *Amway says it’s victimised by jealous distributors, that it’s a case of ‘sour grapes’
A wave of arrests, probes, allegations and denials is sweeping through the direct selling industry. On Monday, Kerala police’s economic offences wing arrested three  top executives of Amway India Ent­erprises, one of the biggest direct selling firms operating in the country.
The move, six months after a former Amway dealer filed a complaint against the company, took the company by surprise. “Amway CEO William S. Pinckney and directors Sanjay Malhotra and Anshu Budhraja were in Kozhikode  to seek anticipatory bail for another criminal complaint. Sleuths from Wayanad, however, took them into custody under a fresh FIR,” says Amway’s head of corporate communications, Sudeep Sengupta.
Now, it emerges that at least six probes against Amway are under way in Andhra Pradesh too. The firm is bending over backwards to refute the charges, but the stage seems set for a wider probe, with a wary public still absorbing the shock of Bengal’s Saradha scam.
“Four very serious complaints have been registered against Amway in Kerala since 2011,” says P.A. Valsan, Crime Branch superintendent of police (economic offences wing). He stresses that the firm’s modus operandi is uncannily similar to a Ponzi or pyramid scheme.
SpeakAsia, PACL, Japan Life and other fraudulent schemes have collapsed in recent years, leaving a trail of bankrupt subscribers. Over Rs 1.5 lakh crore is said to have been siphoned off so far by Ponzis. Of late, direct selling, in which distributors have the legal status of mere informal sales agents, have also come under the scanner.
The Amway men were released on bail by a Kozhikode court on Tuesday, but were asked not to leave India and to coo­perate with the probe. The complainant, Vishalakshi, has alleged she was forced by Amway to purchase Rs 3 lakh worth of products she couldn’t sell.
“Overcharging, illegal circulation of money and creating a chain of money using recruits...are typical of direct sellers like Amway,” says V.C. Sajjanar, DG, counter-intelligence, Andhra Pradesh, who earlier led many direct-selling investigations. Direct sellers and their distributors routinely violate the Prize Chits and Money Circulation (Banning) Act, he says. Promises of quick money, false assurances of huge profits and earnings based on enrolment—all are banned under this Act. But they are part and parcel of Amway’s business, claim the Kerala 
investigators.
The firm is also being probed for charging exorbitant prices for ordinary products, and putting undue pressure on recruits to enrol more people.
“It will take a few months to file a chargesheet. Fraud and cheating cases may also be imposed—the court will decide,” Valsan says.
Amway’s Sengupta says they are being ‘targeted’ for being successful. “Vishalakshi did not make it big. It’s a case of sour grapes.” He could not explain why even the police would be ‘envious’. “The bigger you get, the more people bring you down,” he says. Since the only source of income in direct selling is commissions paid by those down the line to those above, the smaller players lose money while a few corner profits. This is what’s difficult to prove, and, far from making investigators envious, confounds them.
Amway claims revenues of Rs 2,288 crore in FY 2012 and 1.5 million ‘distributors’. 
Its sales force is the jobless and the vulnerable, including housewives, making it tough to regulate.
Direct sellers’ lobby group IDSA chairman Amarnath Sengupta says, “The all­ega­tion of Rs 3 lakh loss is false”. He, how­ever, admits to other complaints aga­inst Amway, including one for mis-selling ‘Amsure’, an insurance product, but insists the police is ‘overreaching’. Amarnath Sengupta runs Daeshan Trading India, a direct sel­ling firm also under investigation. Daeshan’s Kerala offices were sealed last year.
IDSA’s attempts to get its members declared ‘genuine’ and excluded from the Prize Chits Act seems in vain, as the spate of complaints and arrests have more or less muddied the pitch.
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In India, it is business as unusual for Amway

June 2, 2013, 9:49 pm
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While Indian laws are inadequate to deal with direct marketing schemes and their  exorbitant pricing, the United States of America already has rules that force companies like Amway to price their products competitively. While considering the operations of Amway in the 1970s, the U.S. Federal Trade Commission had mandated that at least 70 per cent of the inventory of a distributor of Amway has to be sold through retail or wholesale. “The 70 per cent rule gives the consumer a chance to compare the prices and products of Amway with other products. If Amway’s prices are too high, the customer will naturally pick a similar product of another company,” said a Crime Branch officer who has been closely monitoring the economics of Amway and multi-level marketing companies. “They cannot sell the other 30 per cent at high prices either as customers will be aware of their rates in stores,” he said.
While the government cannot control the rates at which the company chooses to sell its products, legislations like the ‘70 per cent rule’ ensure that direct marketing companies follow competitive pricing if they are to stay in business.
“There is no rule governing multi-level marketing in India. We would also like the government to formulate new rules so that Amway has a set of guidelines that it can follow,” said counsel for Amway K.P. Satheeshan. In India, Amway sells its products through direct marketing to avoid spending on large advertising campaigns. This, however, has not translated into lower prices for the end consumer.
During a recent raid at the offices of Amway in Kochi, the Economic Offences Wing of the Crime Branch came across a list of 119 items for which the company had been charging prices four to 12 times the cost price. A calcium-magnesium tablet, the production cost of which is Rs.60.76, is sold by Amway for Rs.639 – at 10 times 
the cost price. Mascara costing Rs.73.14, meanwhile, is sold at Rs.445. Mr. Satheeshan said that the company’s pricing was no different from what other companies that retailed their products did.
“If you take any product in the market, a part of it goes as commission to the retailer, wholesaler, stockist and super-stockist. Amway does not have retailers. Our distributors sell the products directly and the commission they take from the sale is their incentive to sell the items. If you check the company’s accounts, you will see that they make a maximum profit of 20 per cent only. This is not different from what other companies that retail their goods make. Ultimately, it is for the consumer to decide which product they want to buy,” he said.
The Andhra High Court, while examining a petition against Amway in 2007, had found that the company’s operations were not permissible under the Prize Chits and Money Circulation Schemes (Banning) Act 1978.
The court said it was “evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrolment of new members to earn more and more commission is inherent in the scheme.
“By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase new members in their hot pursuit to make quick/easy money.”
Crime Branch Superintendent of Police P.A. Valsan said, “Most of their products are priced very high. The company has the freedom to sell at whatever price they want. It is the consumer’s decision whether to buy the product or not. But people are buying Amway’s products not to use them, but for business purposes. That 
cannot be done”.
The police also said that unlike the company’s claim that its products are manufactured from the produce of special farms in the United States, many items are actually produced in factories in India. Activist C.R. Neelakandan said that the government should take the chance to examine the loopholes in the law and strengthen legislations governing multi-level marketing chains in the country.
“What drives the sales of the company is not quality, but the money chain that promotes greed,” he said.
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Clear proof against Amway men, says PA Valsan, SP EOW

June 2, 2013, 9:57 pm
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http://www.deccanchronicle.com/130601/news-current-affairs/article/%E2%80%98clear-
proof-against-amway-men%E2%80%99

Kozhikode: Amway India chairman and managing director Will­iam S. Pinckney and two other dire­ctors were arrested on the basis of clear evidence, according to the crime branch (economic offences wing) superintendent Mr P.A. Valsan. 
“The police have enough evidence against the Amway India officials,” Mr Valsan told DC on the last day of his service in the police department. The investigation against multi-level marketing companies had been on for quite 
some time now, he said and added that the pace of investigation pic­­ked up after the formation of the economic offences wing in January 2010. 
“We have arrested several persons in connection with these cases and many of them are in jails for the past one-and-a-half years,” he said. “There were no protests then and I don’t understand the hue and cry over the arrest of a white man,” he said.
On home minister Thiruvanchoor Radhakrishnan’s statement that a probe will be ordered on the circumstance of the arrest of the Amway CMD, Mr Valsan said that the probe team would provide the relevant details. 
“The network of the money chain cases is large and widespread as 26 multi-level marketing companies have collected `3,000 crore from Malabar region only,” he said. 
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Article 1

June 6, 2013, 9:28 am
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Why is Indian Minister, Sachin Pilot - suddenly the 'Amway/MLM' racketeers' best friend?


India's SP 
http://en.wikipedia.org/wiki/Sachin_Pilot

Although he is only 36 years old, Sachin Pilot (b. 1977) is currently the American-educated, Indian Minister for Corporate Affairs. He has previously worked for the British Broadcasting Corporation in India, as a well as for the American-based multi-national, General Motors. 



Sachin Pilot with his party, and nation's, leader, Manmohan Singh

http://en.wikipedia.org/wiki/Indian_National_Congress
http://en.wikipedia.org/wiki/Rajesh_Pilot

Sachin Pilot, whose late father, Rajesh, briefly led the the Indian National Congress party, is a member of the same party (now led by the current Indian Prime Minister, Manmohan Singh) as well as a member of Indian Parliament and a serving, regular officer in the Indian Territorial Army. 


America's SP

Unfortunately, young Sachin Pilot (like his American equivalent, Sarah Palin) seems to have been promoted to his lofty governmental post more for his clean-cut, good-looks, than for his intellectual capacities; for, if he sincerely believes that 'Amway India Enterprises' is a 'law abiding and reputable company' (as has recently been reported ), then he is far too stupid even to be making the tea at the Indian Corporate Affairs Ministry, let alone running it.

http://www.dnaindia.com/india/1841200/report-clearer-laws-on-tackling-fraud-schemes-soon-sachin-pilot-on-amway-issue


American 'MLM income opportunity' racketeer, William S. Pinkey, arrested for fraud.




Despite his previous, apparently well-informed pronouncements, on hearing of the recent arrest of the managing director of 'Amway India Enterprises' on fraud charges, young Sachin is reported as saying:

'it is disappointing that such an eventuality came about.' 

'the government will remove as early as possible the ambiguities in laws aimed at tackling fraudulent investment schemes.'

'We (Corporate Affairs Ministry) will work closely with concerned ministries and industries to remove the ambiguity in the law (related to tackling ponzi and other fraudulent schemes) as soon as possible.' 

'While steps should be taken to crack down on fraudulent companies running dubious investment schemes, companies that are reputed and abiding by the law must be delineated,'

'Such events  might negatively affect the prospects of our country as an attractive investment destination,'

'While we take strong actions against ponzi schemes, we need to be careful not to create a vitiating atmosphere for reputed and law abiding companies.' 

When translated into plain English, Sachin Pilot has apparently said that he has absolutely no intention of allowing the Indian police or the courts to do their job and protect the people of the republic of India from the biggest 'MLM income opportunity' racketeers! On the contrary this young fellow is reported as having steadfastly pretended moral and intellectual authority whilst, at the same time, foolishly broadcasting his urgent intention to place all the biggest  'MLM income opportunity' racketeers above the law of the land, before they can be convicted of fraud and sent to prison.

Apart from the fact that young Sachin has already been approached by countless deluded 'MLM'adherents, begging him to save their 'businesses, there is another explanation for his morally, and intellectually, bankrupt commentary. Namely, the billionaire racketeers whom Sachin Pilot now apparently claims he selflessly wants to protect in the wider-economic interests of the people of the Indian republic, have been following the same subversive tactics which have enabled them to dodge criminal prosecution in the USA, and elsewhere, for decades.

Thus, I have some common-sense questions which I would like to put to Mr. Sachin Pilot:


  • What exactly has been your own, and/or your political party's, financial connection, with the foreign-controlled, major, organized crime group known as 'Amway?'



  • What exactly has been your own, and/or your political party's, financial connection with the foreign-controlled, parallel organization known as the 'Direct Sellng Association?'



  • What quantifiable evidence have you seen to prove that any member of the so-called 'Direct Selling Association' has actually been regularly retailing goods, and/or services (based on value and demand) to the Indian public, rather than operating a dissimulated closed-closed market swindle, or pyramid scam, in which unlawful investment payments (based on the false expectation of future reward) have been laundered as retail sales simply by offering a never-ending chain of temporarily-deluded victims of the swindle, effectively-unsaleable wampum?   



  • What possible lawful reason can you supply to explain why you now, urgently don't want the above serious matters to be fully-investigated by independent Indian law enforcement agents and put before independent Indian judges by independent Indian prosecutors? 


In an ideal world, it wouldn't be me putting these common-sense questions to Sachin Pilot. Self-evidently, if they have been reported accurately (and I have no reason to doubt that they have), Sachin Pilot's recent thoughtless pronouncements are further evidence that, due to the length of time it has survived and amount of capital it has already unlawfully-generated, the absurd, but nonetheless pernicious, lie entitled 'MLM income opportunity,' represents an ongoing threat to democracy and the rule of law, all around the globe.


David Brear (copyright 2013)
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Amway: The Most Intelligent Scam Ever?

June 9, 2013, 12:17 pm
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One of our readers and blogger Shrikanth writes about Amway in his blog and it is reproduced here.

Few days back Amway India Chairman and CEO William Pinckney was arrested along with two directors and booked under the Prize Chits and Money Circulation Schemes (Banning) Act., while this didn't surprise many but what followed after is quite interesting.

India's corporate Affairs minister Sachin Pilot gave a statement that the government is looking to remove the legal ambiguities to differentiate between fraudulent Ponzi schemes and genuine businesses run by "reputed and law-abiding" entities (referring to Amway).

And Kerala government ordered a probe into the circumstances that led to the arrests.

One reason why the government is so vocal in supporting Amway is because of the investment it is making in India, the foreign money it is bringing to desperate economy.
As a side note, India is in serious Current Account Deficit (Expected to be around 5% for 2013) and most of it is balanced by using the foreign investments. So, once the cheap money entering this country stops, things will worsen more. Hence government want to keep its image clean in the eyes of foreign investors.

As they have put in their own website, Amway invested around Rs 200 crores ($35 million) and one tenth of it is in the form of FDI (foreign direct investment).
And they have made Rs 2300 crores ($420 million) in sales turnover in 2012 alone.

Amway, like HUL, Avon, Tupperware sells their products directly to consumers. They are members of regulatory body Indian Direct Selling Association. And Amway is the biggest direct selling company in the world.

So everything is great, what's the problem ?
why do we hear no complaints about Avon or Tupperware which also sells their products directly like Amway?
Why is it always Amway which is news for all the bad reasons ?
With so many complaints and arrests all over the world, how is this company still sticking around and making millions year after year in more than 100 countries ?
Are Amway Products so great that consumers are behind them , and made Amway a $10 billion company ?

There's only one simple answer all the questions :
Amway is so meticulously planned SCAM that it is impossible to prove legally that it is a SCAM!!

But anyone with little bit of common sense can strip their business model and say with no doubt that it is the mother of all intelligent scams. So, let's do it.

Before writing this article, I have attended a session from Amway distributors who claim themselves as intelligent IIM's and IIT's !! (The Indian versions of MIT's and Princeton's)

Amway guys would never tell anyone they pitch that they are Amway distributors.
Why ?
The name Amway is so terribly tarnished over the last 50 years that they can't use it upfront. No body would even listen to them, if they tell that they are Amway guys.

The Amway guy talked for more than 30mins but never used the word AMWAY even once till he reached the end of the presentation.

While I'm not going to reproduce the entire transcript of the presentation, will mention the major lies/sucker punches which concerns us,

Mr IIM started by saying how he was drawing huge salary before he quit his job to pursue his passion, interest : to start his own business, which is now making business with most of the fortune 500 companies !!!

He gave a well rehearsed lecture about recession and how companies are laying off employees, and we should have our own business to tackle it.

LIE No.1: When a consumer purchases a product from retail outlet, he pays the middle men like wholesalers , retailers, their staff salaries, real estate cost, maintenance cost etc. but our business(Amway) removes the middle men , hence customer will get the products at the wholesale price!!

 As they have put in their website, Amway has more than 3 million distributors or middle men, more than any other company. Can you compare this with P&G which made more than $85 billion dollars in sales last year ?

So, when a consumer buys an Amway product or a product marketed by Amway, he pays huge middle men commission, paying insanely more than for the better product available in the retail outlet. According to their own statements, when a product of $100 is sold, more than $40 dollar will be given to the IBO(Independent Business owners or distributors). Can you see the difference ?

LIE No.2:Our products are costly because of their exceptional quality. For example one vitamin tablet of Amway is equal to 4 vitamin tablets of other best companies or One drop of Amway liquid washer is equal to 10 drops of P&G liquid dish washer!!

While I wont say that their products are crap, but it would be an outright lie to say that their products are costly because of their unmatchable quality.

They are over priced because the way Amway works. When someone buys an Amway product from a distributor, part of the money spent will go as commission to all those distributors in his uplink (above him in the chain).
According to Amway, more than 40% of the product cost is pure middle men commission.

So, if this is the case if one buys from a distributor , what if you directly buy online from their website ?
In this case you are not paying any middle men commission, so you should get the products cheaper right ?
WRONG...
If you get the product cheaper directly in their online store who will buy from their distributors ?
So, distributors stop buying their products making huge loss for the products they have already bought.

so what ? who cares about distributors ? A company should concentrate on customer but not on distributors right ?
Wrong again. This is why I said earlier that Amway is an intelligent scam.

If there are no distributors Amway will shut down in months!! talk about $10 billion dollar company creating world class products !!

Here's why...

As a consumer what will u shop online ?
Cell phones, iPod's , cameras, clothes, shoes, drinks, groceries, books what else ?
ok, now checkout Amway Global or Amway India website, do you find anything that you want to buy ? energy drinks ? vitamin tablets ?

If you have, that's great,  now check their prices.

You should be insanely mad, out of your mind, lunatic idiot , screwed psychopathic, bizarrely paranoid person to buy them at their fatuously inflated prices. Well most won't be and will simply come out of their site.

In fact they have added few products with price tag in their website recently, before that there was no option to see their catalogue, only thing was we had to enter reference number of the distributor and click on buy!

They say, they make business with most of the fortune 500 companies, where are their products in the Amway website ? Isn't selling directly from their website to the consumer called direct selling ?

Then how does a distributor sells these products to consumers ?
Here is the catch. Hardly any distributor sells the Amway products to a new genuine consumer.
A distributor buys products for himself and/or will sell products to another distributor under him aka new sucker.

So, unlike P&G or HUL, Amway hardly makes any money(Roughly around 5%) by selling their product to the genuine consumers. 

LIE No.3: We are perfectly legal and not running a Pyramid Scheme.

This is what you'll hear from Amway CEO to bottom level IBO. And this lie is what still keeping them in the business, as it's not possible to prove legally that they are running a Pyramid Scheme.

They say, they are running a perfectly legal MLM (Multi Level Marketing) structure, where one can recruit to sell the products.

Hmm wait, is this really what's going on ?

When you come across an Amway guy, what does he try to convince you ?
Will he ever try to convince you to buy their awesomely high quality products ?

Ok, lets imagine a distributor is very ethical and just try to sell products, he'll pitch people for hours and if he is really good in it, he'll convince lets say one among 20 of them to buy his overpriced products.
He must  pitch say about 35 hours to find one buyer, and he earns 0.02% commission on it!!!

One must be out of his mind to do it right ?

Yes, this is the reason why you'll not find any Amway distributor trying to sell products, they are just looking for more suckers under them. As they get more IBO's under them, more they'll buy for themselves and more suckers they'll recruit. If one doesn't find anyone under him and keep on buying for himself, he'll keep on loosing money.

Looking at the pyramid more than 90% of the IBO's loose money, which will be promptly shared by the people at the top. Higher you are in the pyramid, more you'll make.

If this is not an illegal pyramid scheme, damn what the hell is a pyramid scheme then?

As they hardy have any genuine consumer, more than 90% of the people involved in this business must loose money for Amway to make profit. If they can't find any sucker, they can't make any money. No new money enters the system. Thankfully for them, as P.T. Barnum once said, “there’s a sucker born every minute”.

Amway announced record sales of $10.9 billion for the year 2012. You must know by now, how much did its distributors lost last year.

If everyone knows this fact, then what's the problem in prosecuting them ?
Because Amway OFFICIALLY doesn't ask their IBO's to do it. Intelligent.

LIE No.4:You are required to work only 6 to 8 hours a week in your spare time, and man you will make millions in 6 months.

 This is just one among many deceptive statements their IBO's make. Let's see some statistics.

According to their own statistics, more than 60% of the IBO's are inactive.
What does it mean? Out of 100, 60 realise after loosing some money that it's a crap and time to move on. If they are making lot of money why would they ever quit?

This is what they say, when you buy the products for the first time, you'll get them for discount (oh you have already started to earn ), you get some people under you lets say 20, they all will get people under them, everyone buys the products, and you make huge money!!!
whoa it's so easy.

Let's believe it for a moment, see what happens,
You'll start to hunt for people, You'll first go to your friends and relatives and say, hey guys I have a wonderful business idea, it's called Amway, we all can make lot of money!!
You can imagine the reaction from them the moment they hear the word Amway !!!

Lets say some wont be knowing it, and finally after making lot of phone calls and meeting so many friends whom you wouldn't not have met for years, lets say you'll able to convince 3 to join you.

Now how to find more ? your upline will preach you not to use the word Amway when pitching others and go to markets, shopping malls, bus stations, railway stations pitch everyone you get to talk to.
Is this what you really want to do in your life?

ok, lets imagine you started to do it,

9 out of 10 persons you pitch will say, not interested, lets say you pitched 50 persons.
you'll give big presentation to those 5 guys, say one gets convinced and join you. It must have taken you at least a month to find one new guy.

Now you slog really heard and find 10 guys in 6 months !!!
Now, 60% of them loose interest and quit in few months.
you'll be left with 4 people under you. And will they be as enthusiastic and talented as you to find more people under him ?
lets say 2 of them are really good and start to find people under them.

Bottom line is you found 2 people under you after slogging for 6 months. 6 to 8 hours of spare time per week for ???
It's a joke.

And how much did you earn ? if those 4 have bought lets say $200 products each, you'll make maximum $5.

All this time if you are buying stuffs for yourself including their CD's , books, tapes and attending their functions, then you are in bigger shit.

Lie No.5: You are not getting more people because you don't have the skills to pitch them, you need to get educated, attend our functions, meetings, buy CD's , books, you'll see wonders in few days.

 When you join Amway , your upline will force you to attend paid functions, meetings, to buy their books, CD's or tapes of Diamonds. In these functions/CD's Diamonds will tell about their lavish life style, how many cars they have, how big is their mansion, how much they earn almost doing nothing, how you can do it by not listening to negative news about Amway and all. A complete brainwash.

While Amway doesn't make money by these tools, people at the top will.

Imagine some IBO succeeded in convincing you to join the scam under him. And you are pretty intelligent and don't want to buy product for yourself. Now that person who recruited you is not making any money from you. If you leave in between without recruiting anyone, it's a waste of effort on his part.

Hmm they are smarter than you. Here's what they'll do,

As soon as you join, they'll tell you to attend these meetings and buy their CD's and tapes. They'll tell that these are not compulsory but are damn necessary to succeed in Amway. They will convince you to buy these tools , so before you leave, they'll make sure you'll loose some.

Only truth they tell is , they made billions even in recession time.
That's true. During recession, layoff's time, it is easy to find gullible people desperate and nervous about their future. No surprises here.

 Here's one such diamond, brainwashing the audience. Observe, as everyone in the audience is a new Amway distributor, they never ask him any questions and listen to all the bullshit he has to say.


 But ultimately, the truth is,

Only 1% of the IBO's will be able to at least recover the money they have spent.
Now you can imagine the odds of you becoming a diamond.

Do you want to involve yourselves with a business which has 99% chances of you loosing your money and 100% chance of loosing your friends and family ?





Finally,

IDSA, which jumped into the scene as soon as Amway CEO got arrested and put pressure on government to come up with policy changes to give Amway business model a clean chit, has to answer one simple question: Doesn't it know the pyramid scheme Amway is running and how much is it getting from Amway which incidentally is it's biggest member?

Corporate Affairs minister who refers to Amway as "reputed and law-abiding" must be -
  • Ignorant of the sheer number of cases going on against Amway all over the world.
  • Ignorant of the fact that Amway agreed to pay $150 million in 2011 to settle fraud cases against it in US.
  • Ignorant of the fact that Amway paid the largest criminal fine in the history of Canada for tax evasion.
  • Ignorant of the fact that Amway is banned in China from direct selling.
  • Ignorant of the fact that India received $30 billion last year as FDI and counting mere $3.5million from Amway.
  • Ignorant of the fact that of all Amway distributors involved in India, more than 50% are college students who are mind washed to spend their time and energy in loosing their family income ?
Banning Amway distributors from buying products for themselves will not affect India's reputation in the eyes of foreign investors. Every one knows how reputed and law-abiding Amway is.

On a final note,
Amway constantly attacked bloggers and its critics who wrote against it. Sidney Schwartz was one such critic, Amway filed lawsuits against him, threatened, finally made him to shutdown his website. Here are the links to the copy of his site - Amway: The Untold Story and Amway: The Continuing Story.

P.S : If somebody pitches you and tells you that he has a great business Idea and it's Not Amway, it's 100% Quixtar, an online version of Amway. Don't fall for it.

Thanks for reading.
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Sachin Pilot still believes the 'MLM Income Opportunity' fairy story

June 23, 2013, 12:37 pm
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The American-educated, pretty-boy, politician, Sachin Pilot, is currently on an official tour of the USA where he's been playing the unconvincing role ofIndia's intellectually, and morally, authoritative Minister for Corporate Affairs.


I don't what it is about Sachin Pilot, but he's now beginning to remind me of Tom Cruise.



 'The Economic Times of India' has recently published the following report of young Sachin's latest, absurd, but nonetheless dangerous, pronouncements on the subject of  'MLM Income Opportunity'racketeering:
With an aim to segregate the genuine multi level marketing companies from those operating fraudulent ponzi schemes, the (Indian) corporate affairs and consumer affairs ministries are working on a clearer set of rules for such businesses.
"While we must take strong action against the companies that are misusing the laws and duping investors, reputed companies that are doing good work and did not violate any Indian laws should be allowed to operate without any fear. They must be given confidence," Corporate Affairs Minister Sachin Pilot told PTI in an interview here.
The Indian minister is on an official visit here. The minister's comments come against the backdrop of the recent arrest of global direct selling major Amway's India Chairman William S. Pinckney and two company directors by the Kerala Police over allegations of fraud.
While they were released later on bail, the incident has generated a debate on need for a clear set of rules for differentiating between registered companies doing genuine businesses and those duping the investors through fraudulent schemes structured like multi-level marketing operations.
"My Ministry (Corporate Affairs) and Ministry of Corporate Affairs are now working on clarifying these guidelines (for multi-level companies)," Pilot said.
Stressing on the need for protecting investors against fraudulent entities, the Minister said the newspapers also have a larger role to play as watchdogs and should not entertain paid advertisements from illegal companies.
"Sometimes newspapers publish advertisements placed by companies running illegal schemes to dupe the investors.
"The newspapers have a larger role to play in being watchdogs of investors and refuse such paid advertisements in the best interest of readers. Companies must deliver what they promise," Pilot said.
________________________________________________________________________
Sachin Pilot is evidently still mistaking the 'MLM' Utopian fairy story for fact, and, as I have previously pointed out, if this well-connected young fellow sincerely believes 'Amway India Enterprises' to be 'doing good work,' then he is not fit to be making the tea at the Indian Corporate Affairs Ministry, let alone running it. There are, of course various other, possible, logical explanations for Sachin Pilot's morally, and intellectually, feeble stance - most of which (if rigorously investigated) would land him in prison.
The mere fact that the Indian Minister for Corporate Affairs has been passing any comments on this dissimulated form of ongoing, major, organized crime (as though it is a lawful commercial enterprise), is a victory in itself for 'MLM Income Opportunity' racketeers.
Despite what Sachin Pilot claims to be reality, the republic of India already has common-sense criminal legislation which seeks to protect the Indian public and punish the guilty, by identifying, and banning, all forms of closed-market swindles, or pyramid scams, no matter how cleverly these are dissimulated. Furthermore, the Indian police is tasked with independently enforcing this criminal legislation, and independent Indian courts are also there to see that that the Indian public is protected and that justice is done. 
According to his latest scandalous pronouncements in the USA, Sachin Pilot is still attempting to remove the Independent Indian police and courts from the equation, and introduce toothless civil regulators, thus, placing foreign-based billionaire racketeers, like those behind 'Amway India Enterprises,' above the criminal law in the Indian republic.

David Brear (copyright 2013)
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NMart seeks investigation by CID, how funny?

June 28, 2013, 12:37 am
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NMart filed a writ petition in Andhra Pradesh High Court seeking transfer of all criminal cases filed against the company to the Crime Investigation Department (CID), Hyderabad. The High Court admitted the petition and issued notices to the State Government and the Director General of Police to present their views on the petition.
Though it has to be wait and watch what the government would do in this respect, some basic questions arise regarding the writ petition.
Can a theif ask or demand that a particular police officer or a group of police officers should investigate his crime?
This is not first time such proposal was put forward by NMart. Earlier also, the same demand was proposed and that writ petition was wtihdrawn later.
WHY NMart is asking the judiciary to transfer the criminal to the CID is the moot point to be discussed at length. However, due to the constraints of many things, let us briefly discuss about the issue here.
The CID has the dubious distinction of prolonging the investigation for several years. Moreover, the CID never presses for the expedition of the trial in the court.
The cases in point are several instances.
The CID filed a criminal case against the Amway India Enterprises in 2006. The Amway India moved the AP High Court to declare its business model legal. However, the High Court in unambiguous terms stated that the business model of Amway is illegal.
Then Amway India tried its hand by moving a special leave petition in the Supreme Court. Unfortunately for Amway, the Supreme Court upheld the High Court decision.
Then following direction of the Supreme Court to complete the investigation in six months and file the chargesheet, the CID filed the chargesheet in the Chief Metropolitan Magistrate Court, Nampally, Hyderabad in 2007. 
For reasons better known to the CID officials at the helm of affairs, the name of the company i.e.Amway India was not mentioned in the chargesheet. When that was pointed out by a section of media and Corporate Frauds Watch, the CID officials included the name of the company in the chargesheet. 
After that the CID never bothered to pursue the case in the CMM Court.
The accused in the criminal case including the CMD of Amway India 'visit' the court occasionally whenever it was suited to them and ask for a date for the next appearance whenever suited to the accused.
Now it is more than six years, the 'farce' has been going on without taking the case to its logical end.
Then again in 2008, Corporate Frauds Watch filed a criminal case against GoldQuest International, which has duped Indian up to over 20 billion rupees. When several criminal cases were filed against the fraudulent company all over the State, the investigation was transferred to the CID in 2008. Even after five years, the CID did not file even the chargesheet in the court. It is not even sure whether it had completed the investigation into the whole murky deals of the GoldQuest.
The CID has also taken up investigation into the Rs. 30 billion fraud by speakasiaonline. The Singapore-based company had defrauded Indians and after Corporate Frauds Watch lodged a complaint, the CID has taken up investigation in 2011. The investigation remains incomplete till date forget about chargesheet.
Morever, there have been several allegations against the top CID officials regarding the investigation into these criminal cases.
In essence, transfering the case to CID means burying it fathoms deep. That is why the crooks of NMart has moved the High Court to transfer the case to the CID.
The reasons:
1. The accused would obtain the bail easily since there would be little resistance.
2. The case would be pending investigation for many years
3. After investigation the case would be pending trial for many years.
4.The accused would enjoy the 'fruits' of his crime without hindrance.
5. The accused would have to appear, if at all, before only one court instead of various courts throughout the State.
6. The accused would be able to start another racket before the law-enforcing agencies caught him.
7. The conviction, if at all, for the crime would not be in near future.
 When there are so many benefits, naturally, the thief asks for investigation into his crime by an officer of his choice.
P.S. After making many trips to various parts of Andhra Pradesh, Gopal Mohan Singh Shekhawat is now cooling his heels in the Ongole district jail comfortably with the luxuries his ill-gotten money provides him.
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Union Minister Sachin Pilot served legal notice

June 29, 2013, 7:47 am
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Vijayawada-based civil society organisation Corporate Frauds Watch served a legal notice to the Union Minister for Corporate Affairs, Sachin Pilot for openly supporting multilevel marketing companies in general and Amway India Enterprises in particular which is against the spirit of the Constitution and the judgments of various high courts in the country.
The Vijayawada-based civil society organistion Corporate Frauds Watch has been striving to bring awareness among people regarding the dubious activities of several companies which have been indulging in money circulations schemes in the name of selling products and services.
Shaik Mastan Vali, counsel for the Corporate Frauds Watch issued the notice to the young Central Cabinet Minister.
Corporate Frauds Watch pointed out that after the arrest of the C.E.O. of Amway India Enterprises by Kerala Police, the Union Minister has made a statement that the Ministry is trying to safeguard the interests of such companies by an enactment. This statement created havoc in the minds of victims and confusion in the minds of general public. Hence, Corporate Frauds Watch wants to put the following information to the knowledge of the Minister.
Amway got F.I.P.B. permission by misrepresentation and misleading statement of promotion of direct selling. But in reality what is happening at the ground level is Amway has not engaged in direct selling to the end-consumers. Amway has been selling products to its members for Rs.96/- and in turn these members are selling the same product to the end-consumers for Rs.100/- with some retail profit apart from commissions on enrollment of new members. Thus there is no direct sale by Amway. Moreover Amway will not sell products directly to the end-consumer. If the Minister has any doubts in this regard, he may try to purchase products from the Amway office and learnt the same.
Amway has been running 6-4-3 scheme in the guise of sale of products. The 6-4-3 scheme means the first person has to sponsor/enroll 6 persons and these six persons have to enroll /sponsor 4 persons each totaling 24 persons and again these 24 persons have to enroll/sponsor 3 persons each totaling 72 persons. Thus there are 103 persons (1+6+24+72) in 6-4-3 scheme. These 103 persons are called one leg for commission distribution.
In the year 2002 itself, RBI, after examining the scheme of Amway, filed a criminal case against Amway in Sector 26 P.S. in the Union Territory of Chandigarh.
In 2002, Minister for Finance and Company Affairs Adusul V. Anand informed the Lok Sabha that the scheme of Amway is creating chain of distributors and falls under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978.
The Division Bench of the High Court of A.P. after hearing at length and verifying the scheme and ground-level report has held vide WP 20470/2006 that the scheme of Amway is nothing but illegal Money Circulation Scheme banned under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978. The Supreme Court of India also upheld the judgment of the AP High Court order when Amway filed an SLP bearing No.13414/207 against the order of the Hon’ble High Court of AP.
In Kerala also, Amway, by lobbying, made the Kerala Government to make guidelines to save itself from the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and further violated even the State government guidelines.
It is respectfully put to the knowledge of the Minister that Multi-Level Marketing is nothing but product camouflaged illegal money circulation scheme because in the front end these so-called MLM companies show case sale of products and in the back end they promote illegal money circulation scheme. They promise huge commissions not only on the event of personal efforts of joining new members but also on the contingency relative or applicable to enrollment of new members by their downline members. We request the Minister to kindly just remove the product from the schemes of these persons, and then the naked money circulation scheme will be exposed.
It is further respectfully put to the knowledge of the Minister that the recent statements of the Hon’ble Minister supporting the MLM companies have created confusion among the public and havoc in the minds of victims. As per Section.3 of The Prize Chits and Money Circulation Schemes (Banning) Act, 1978 it is not permissible and punishable.
Hence, the Minister is requested on behalf of the Corporate Frauds Watch not to make such statements encouraging the MLM companies in the interest of general public and society.
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Amway India’s chain scheme is illegal: SP

July 1, 2013, 11:26 pm
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http://www.thehansindia.com/

Showry
Ongole: Superintendent of Police Dr Kolli Raghuram Reddy asserted here on Saturday that Amway India’s business model is illegal and warned people not to fall prey to the easy and quick schemes extended by various companies in the guise of selling products and services.
In an interview with the Hans India, the SP said that the people who join in such schemes and make others join in such schemes are also liable for prosecution.
Pointing out that one of such companies which is offering easy and quick money to people is Amway India Enterprises, the SP recalled that the Division Bench of Andhra Pradesh High Court in unambiguous terms held that the business model of Amway India is illegal after hearing at length the arguments from both sides.
The print media or electronic media should not publish the advertisements of such companies and the Government has powers to attach the properties of such publications, he remarked.
The State government has issued an order in 2008 not to publish the advertisements of Amway India holding it as an illegal company, he added.
Countered the recent propaganda by Amway India that the officials have been making false statements against the business model of Amway Indi, he said that this amounted to contempt of court as already the Andhra Pradesh High Court held its business model illegal. Later, the Supreme Court also upheld that AP High Court judgment, he pointed out.
The SP said that everyone who was involved in the operations of Amway India is liable for prosecution.
He warned the people to beware of the chain schemes which have been cheating people in large numbers. “People who lose money in such schemes are also liable for prosecution since the Prize Chits and Money Circulation Schemes (Banning) Act clearly says that joining and making others join in such schemes is a crime,” he said.
The SP pointed out that already a criminal case is pending investigation in the Two Town police station in the town. “The Amway India has been casting aspersions against the police officers instead of complying with the court orders,” he said.

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SEBI busts potato-purchasing racket of Sumangal Industries

July 10, 2013, 8:46 pm
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It has become very easy these days for conmen to cheat the gullible. Kolkata-based Sumangal Industries started yet another racket with the lure of big returns in short span. And there are many to fall for it.
The company in question asked deposits from people with the promise of 100 per cent returns in 12 months. 
Any idea what it is going to do with the money? 
We have learnt about rackets which promised huge returns if we invest to purchase goats, ducks, rearing sandalwood plants et al. But this fellow has gone a step ahead.
It is going to invest in potato purchases in large scale and sell the same with huge profits. Don't ask how the profits would be 100 per cent. 
It is just a promise. And people fall for it. It had collected several crores of rupees from the mud-heads who believed them.
However, the Securities & Exchanges Board of India put a spanner in the racket of Sumangal Industries and asked it to return the amount in three months to all the investors.
In all these rackets one thing is common. First these racketeers catch hold of the group leaders who are not ashamed to meet people once again with their smooth talk.
These shameless fellows talk about easy money and induce peoplewho already lost money such scams to get back their money where they lost once. 
Who are these group leaders?
People who vociferously defend the MLM in this blog stating that is the best business model in the 21st century. And calling everyone who oppose them names. These people are the dangerous lot to the society. They are interested  in only in lining their pockets.
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Mizodirect website contains many a discrepancy

July 12, 2013, 1:06 am
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Corporate Frauds Watch has been closely watching the http://mizodirect.mizoram.gov.in/ website and already has written a letter to the Mizoram State government seeking clarification over the website.
On the face of it, there are many discrepancies in the website.
Every State government has its own emblem. However, this web site has the emblem of the Union Government of India which is not correct.
We are asking the State  Government to clarify its stand on it.
The website is vacant on all its sections.
Let us wait for the answer from the State Government.
It appears that it is a fraud pulled in the name of the State government. Anyway, let us see what would the government say.
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Cattle & Ghee racket unearthed, SEBI asks HBN Dairies & Allied Ltd to refund money to people

July 13, 2013, 1:49 am
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http://www.hbnglobal.com/dairy/dairy.

Here is another racketeer company which collected Rs. 1,100 crore (Rs. 11 billion) from public on the promise of high returns within a short span. Any idea what the company had been up to. The company wants to buy cattle and sell ghee to foreign countries to earn thousands of crores of rupees. 
The company had succeeded through the 'agents' to hoodwink people that it is a profitable venture and people believed it blindly. 
The gullible have already invested Rs. 745 crore in the company's 'Cattle and Ghee' scheme with the hope that they are going to become millionaires soon. By March 31, 2011, it has collected Rs. 745 crore from public and after that also it continued the collection. Though it has yet to be ascertained how much the company had actually collected from public it is estimated that it would be Rs. 1,100 crore. 
As is their wont, the Securities and Exchanges Board of India (SEBI) woke up late from slumber and ordered the company to refund the deposits to people. 
The SEBI has issued restrictions on the company which prohibited selling of its properties worth Rs. 1,000 crore in addition to the deposits collected by the company. 
The SEBI has also instructed the company to prepare an action plan to refund the Rs. 1100 crore deposits to the public within thirty days. 
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Chief Secretary of Mizoram to take disciplinary action against IPS officer behind Mizodirect

August 3, 2013, 2:39 am
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THE SHILLONG TIMES NEWSPAPER on August 2, 2013 reported that the Mizoram government has nothing to do with the Mizodirect and it is backed by a senior IPS officer with the rank of Addl Director General of Police.
Here is the report which reflects the story earlier published in this blog.

Aizawl: The Mizoram government ton Thursday disowned a company which claimed itself to be a state government undertaking and said strict disciplinary action would be taken against the senior IPS officer who has floated the firm. 
A disclaimer issued by the Chief Secretary’s office said Mizoram Direct Marketing Limited, registered under the Companies Act 1956 on March 11, 2013 was launched by Principal Secretary of the State Industries department P C Lallawmsanga in his personal capacity, and not on behalf of the government of Mizoram.
The Government officials floating business outfits to conduct commercial activities by branding the concern as a wholly owned company of the government of Mizoram required a policy decision by the Cabinet, the disclaimer said.
“Memorandum of Association & Articles of Association have neither been vetted by the Law Department nor concurred by the Finance Department, Government of Mizoram before approaching the Registrar of Companies and the Directors and have also not obtained prior permission as required under the CCS (Conduct) Rules to float a commercial concern,” it said.
Lallawmsanga has not been authorised to sign the MoU between the State government and Chennai-based RMP Infotec Pvt Ltd and the licensee agreement between Mizoram Direct Marketing Ltd and Mizo Lifestyle Marketing Pvt Ltd  purportedly on behalf of government the disclaimer said.
Chief Secretary L Tochhong August 1, told the media persons that the government was contemplating taking disciplinary action against Lallawmsanga, a 1984 batch Tamil Nadu cadre IPS officer holding the rank of Additional DG of Police.
Punitive action might also be taken against the other two company ‘directors’ – Teresy Vanlalhruaii and Lalbiakthanga Chhakchhuak, sources said.
The Mizoram Direct Marketing Limited was formally launched on July 18 at Science City Auditorium in Kolkata, attended by well-known personalities including those from big companies.
Sources said Mizoram Chief Secretary informed Lallawmsanga not to attend the launching function, but the latter disobeyed her orders claiming that he and the newly-formed company had the blessings of the State Chief Minister.
The company’s website was taken offline soon after launching of the company while it was suspected that some other government officials in the state Information and Communication Technology department and National Informatics Centre (NIC) were involved as the website was also reportedly designed by the state government-owned Zoram Electronics Development Corporation Ltd. (ZENICS).
The company’s main business, according to the pre-launch advertisements, was promoting direct selling of branded consumer goods in the country. (PTI)
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Amway India CMD lies to the journalists

August 13, 2013, 2:29 am
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The other day the CMD of Amway India Enterprises in an interview to a nitwit Indian journalist with straight face lied that the Amway India is not a chit fund company but an FMCG. What a laughable statement!
The CMD, Mr William Pinckney, has conveniently skipped the issue about the business model of Amway. 
The Andhra Pradesh High Court has rightly pointed out that Amway's business model is illegal in its judgement in 2007. 
The Honourable High Court stated, "It is, thus, evident that the whole scheme (of Amway India) is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme.  By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money."
When a batch of criminal cases were filed against the fraudulent company under Section 2 (c) of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, it meant that the company is indulging in illegal business activity of money circulation scheme not under prize chits.
The High Court also stated, "Thus the two ingredients are satisfied in the case of promoter (Amway India) too.  We are, therefore, of the considered view that the scheme run by the petitioners squarely attracts the definition of “Money Circulation Scheme” as provided in Section 2(c) of the Act. (Para 35).
In spite of the clear judgement, the CMD has the gall to state that his company was not a chit fund company. Anyway who said that Amway India is a chit fund company.
It is a product-based money circulation scheme company. 
It is high time people realised the dubious claims of the company and fall prey to its misleading propaganda.
Crooks say many things but how could a journalist take them for granted. The journalist should have checked for the criminal cases against the company. The journalist should have asked the police officials who filed criminal cases. 
For reasons better known to them these journalists forget the basic tenets of journalism - Question.


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Avani Gold chairman, MD held on fraud charges

September 14, 2013, 2:58 am
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Yemmiganur (Kurnool): In yet another crackdown on white collar offences in the district taken up by district superintendent of police Dr K Raghuram Reddy, the Yemmiganur police on Thursday arrested Malyadri, chairman, Venkateswarlu, managing director and five others of Avani Gold Company for swindling Rs. 19 crore from the public.
According to DSP Sivaram Reddy, the company has offered high rate of interest on deposits and collected crores of rupees through agents offering them high commissions.
The accused are arrested under the provisions of the AP Depositors Protection Act and Prize Chits & Money Circulation Schemes (Banning) Act, he said.
The company has collected Rs. 19 crore from the public and the amount was misappropriated by the office-bearers of the company.
The DSP said that the details of properties held by the chairman, MD and others would be investigated to recover the amount.
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Amway is doing illegal business, asserts Sajjanar

September 19, 2013, 1:52 pm
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VC Sajjanar, Deputy Inspector General of Police, who has been waging a war against the illegal money circulation schemes for nearly a decade, asserted that Amway has been doing illegal business in the name of selling products.
In an exclusive interview with Corporate Frauds Watch, the DIG said that it has been proved beyond reasonable doubt that Amway’s direct selling was hoax. “There are several lakhs of people who lost their precious earnings by way of purchasing products in the hope of becoming rich,” he pointed out.
The senior IPS officer says that no fool would buy a Glister tooth paste for Rs. 200 unless he is induced that he is going to become rich soon.
Referring to the recent criminal cases filed against Amway India Enterprises in Kerala, the DIG recalled that Amway India, instead of approaching the judiciary for redressal of its grievance if its business is genuine and legal, has chosen to maintain stony silence and its withdrawal symptoms were visible.
On the business model which Amway India claims that it has been a proven good business opportunity worldwide, Sajjanar said that Andhra Pradesh High Court had thoroughly dissected its business model to prove that it attracted the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (PCMC Act) in its judgment in 2007.
The issues pointed out in the judgment included the easy and quick money being made by Amway India and its IBOs and how it attracted the provisions of the PCMC Act, he averred.
The Amway India in its writ petition claimed that it has four lakh IBOs in the country. The Amway is collecting Rs. 4,500 for becoming the IBO out of which Rs. 1800 goes to the company as registration fee. So the Amway India has made about Rs. 80 crore through registration fee without providing any service or product to the consumers. “It is nothing but easy and quick money,” the DIG said.
Likewise, the Amway is also collecting Rs. 990 every year by way of renewing the registration. In effect, the Amway is coolly pocketing Rs 40 crore every year by way of renewal again without extending any service or product to the IBOs. The DIG said that these two observations by the High Court are enough to prove that the business model of Amway is illegal.
In the case of IBOs also, the High Court stated that by way of enrolling downline members, the IBOs are making money by the turnover achieved by the downline members which is nothing but easy and quick money for the IBOs.
The senior IPS officer avers when it was clearly proved in the judgment that its business model was illegal, how could the Amway India claim its business is direct selling.
Referring to the innocent-looking statement by the CMD of Amway India, Mr William Pinckney who stated with a straight face that Amway India has been an FMCG company not a chit fund company, the DIG has taken strong exception to the duplicitous remarks.
He said that it is high time the corporate veil of these fraudulent companies was removed and the real intention of the easy and quick money-making scheme was exposed. “There is hardly any direct selling of the products in the business scheme of these direct selling companies,” he added.

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The 'FlexKom/Lyoness' Ministry of Truth makes an appearance

September 24, 2013, 5:21 am
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August 1st 2013, I published an article entitled:

'Lyoness' and its copycat, 'FlexKom,' have exhibited the universal identifying characteristics of a cult. 
http://mlmtheamericandreammadenightmare.blogspot.fr/2013/08/lyoness-and-flexkom-have-exhibited.html


Prof. Robert Jay Lifton



As part of my article, I explained how, in 1961 (after many years of field-research, interviewing US servicemen held prisoner during the Korean War), Robert Jay Lifton (b. 1926) published, ‘Thought Reform and the Psychology of Totalism.’ 



In this standard, medical text-book, Lifton identified 8 ‘themes’ which, if present in any group, indicate that its members are being subjected to a mixture of social, psychological and physical pressures, designed to produce radical changes in their individual beliefs, attitudes and behaviour.



1). ‘Milieu control’ — the attempted control of everything an individual experiences (i.e. sees, hears, reads, writes and expresses). This includes discouraging subjects from contacting friends and relatives outside the group and undermining trust in exterior sources of information; particularly, the independent media.

2). ‘Personal or mystical manipulation’ — charismatic (psychologically dominant) leaders create a separate environment where specific behaviour is required; leading to group members believing that they have been chosen and that they have a special purpose. Normally group members will insist that they have not been coerced into group membership, and that their new way of life and beliefs are the result of a completely free-choice.

3). ‘Demand for purity’ — everything in life becomes either pure or impure, negative or positive, etc. This builds up a sense of shame and guilt. The idea is promoted that there is no alternative method of thinking or middle way, to that promoted by the group or by those outside it. Everything in life is either good or bad and anything is justified provided the group sanctions it as good.

4). ‘Confession’ — personal weaknesses are admitted to, to demonstrate how group membership can transform an individual. Group members often have to rewrite their personal histories and those of their friends and relatives, denigrating their previous lives and relationships. Other techniques include group members writing personal reports on themselves and others. Outsiders are presented as a threat who will only try to return group members to their former incorrect thinking.

5). ‘Sacred science’ — the belief in an inexplicable power system or secret knowledge, derived from a hierarchy who must be copied and who cannot be challenged. Often the group’s leaders claim to be followers of traditional historical figures (particularly, established political, scientific and religious thinkers). Leaders promote the idea that their own teaching will also benefit the entire world, and it should be spread.

6). ‘Loading the language’ — a separate vocabulary used to bond the group together and short-circuit critical thought processes. This can become second nature within the group, and talking to outsiders can become difficult and embarrassing. Derogatory names, or directly racist terms, are often given to outsiders.

7). ‘Doctrine over persons’ — individual members are taught to alter their own view of themselves before they entered the group. Former attitudes and behaviour must then be re-interpreted as worthless, and/or dangerous, using the new values of the group.

8). ‘Dispensing of existence’ — promotion of the belief that outsiders — particularly, those who disagree with the teaching of the group — are inferior and are doomed. Therefore, they can be manipulated, and/or cheated, and/or dispossessed, and/or destroyed. This is justifiable, because outsiders only represent a danger to salvation.

A couple of days ago, the 'FlexKom/Lyoness' Ministry of Truth finally attempted to post its reality-inverting propaganda (anonymously) on my article. However, I think that readers will agree that this piece of evidence proves beyond all reasonable doubt, the accuracy of Robert Lifton's analysis.

In essence, in response to my detailed, evidence-based explanation of why 'FlexKom' should be identified as a pernicious cult (and an ongoing major organized crime group), the organization's self-appointed bosses have foolishly responded by steadfastly pretending that anyone who dares to challenge the authenticity of any 'Network Marketing Company,' must be ignored as, completely crazy: 

'Wow this has got to be the dumbest blog online. Not sure if you have targeted just FlexKom for this nonsense or if it is the entire network marketing industry. But please if you are a reader you have to be able to see this blogger is kookoo!' 


Contrary to what the 'FlexKom' propaganda pretends, the organization is actually peddling the crackpot pseudo-economic theory that endless chain recruitment + endless payments by the recruits = endless profits for the recruits



The 'FlexKom/Lyoness' Ministry of Truth then went on to offer some typically-jargon-laced, and mystifying, economic pseudo-science, before offering us a typically-totalistic portrait of Planet Earth and then finally concluding that 'FlexKom' is the complete opposite of a cult and that anyone who thinks that 'FlexKom' is a cult, can only be a cult adherent. i.e. A member of the inferior poor and stupid 90% majority of the world population - or one of the majority, inferior, poor and stupid American population brainwashed by traditional education, religion and the media :

'One quick response on the subject: FlexKom will only have very few reps in the markets they enter. In Austria the rep count when they stopped taking new reps was 500 reps to service the entire country. FlexKom Mostly customers who use a free loyalty card/app. These customers will not even know who the owners (so called cult leaders) are and wouldn't care. They are just using the app/card to get cash back and awards over time when they shop just like a credit card and airline miles but dealing small to medium sized businesses who are struggling right now. WTF does cult have to do with a system that connects businesses around the world?

If you think about it. Look across the world today. 90% of The population are the workers clocking in and clocking out. Getting just enough to eat and have shelter. They send the young to what is called an education but is it? They get taught to sit still listen and do exactly what they are told. The ones that get ahead and get restless are drugged here in USA. All of the cult ideas are in place. The leaders are in control of the information that gets out. Through the schools history books, religions and media. The population is programmed to obey the leaders of the world. We watch as billions of dollars is being made by corporations and governments and these same companies are exploiting the rest of the world. We go to work for them and we say this is the way to go while we have less time freedom and less money to live with. We have more convenience than before because we have better technology but we have less time with our families. The mother used to stay home but can't anymore because there is not enough money being paid from these corporations. The debt society is the cult to be aware of. But I guess when you are already in a cult then something quite the opposite will look like the cult to most.' 





Readers should particularly note that throughout human history, there have been periods of mass-alienation... following wars, revolutions, plagues, natural disasters, economic depressions, etc. ... during these periods, dangerous manipulators (acting like ancient, Gnostic Prophets by pretending moral and intellectual authority and offering some form of Utopian existence in the here and now) who at other times might be dismissed as absurd crackpots and charlatans, have found it much easier to become accepted as authentic Messiahs and to acquire a mass-following.


Photos Vivastreet UK wide FlexKom Franchise opportunity


'FlexKom Income Opportunity' cultic racketeer, Asker Sakinmaz.
'Lyoness Income Opportunity' cultic racketeer, Hubert Freidl.


Sadly, the current world economic crisis has produced a perfect climate for a new generation of heavily-disguised little parasites, like Asker Sakinmaz and Hubert Freidl, to begin to gorge themselves by pretending affinity with the common hopes and fears of humanity. 



Narcissistic charlatan: turned megalomaniacal-psychopath, Sergei Panteleevich Mavrodi 

http://mlmtheamericandreammadenightmare.blogspot.fr/2013/04/sergei-panteleevich-mavrodi-b.html




The essentially-identical (but more advanced) activities of Sergei Panteleevich Mavrodi, demonstrate that Messrs. Freidl and Sakinmaz are neither original nor unique - whilst the longer they remain officially-unchallenged and the more capital they are allowed to steal: the more difficult it will become to hold them fully to account for their economic and psychological crimes against humanity.


David Brear (copyright 2013)
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Protect your Money: Ignore dubious chain-money schemes and false promises: Sucheta Dalal

November 2, 2013, 1:54 am
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Sucheta Dalal talked in detail about how the different multi-level marketing –MLM scams have siphoned off money from India and the helplessness of authorities, including police, to fight with those having political clout  Chain-money schemes like Saradha, QNet and Speak Asia are flourishing in our country. Countless money has been lost in this manner. Almost every other month we  get to know of a big scam in one state or another, where thousands of crores have been collected from investors, who have been promised high returns, sometimes of  more than 100%, in a relatively short period of time. Sucheta Dalal, managing editor, Moneylife magazine, said, “In 2010, for example, a pyramid scheme called City Limousine found investors from even within the RBI and Income Tax office. According to numbers in a Times of India story, 15 RBI officials, 200 I-T officers  and no less than 6,000 police officers invested in this dubious scheme.” She was 
speaking at a seminar organised by Moneylife Foundation in Mumbai on Friday. 

These kinds of reports are becoming more repetitive in recent days. Multilevel marketing (MLM) and chain money scams have rocked the entire country for a considerable time. Ms Dalal talked in detail about how the different multi-level marketing scams have siphoned off money from the country and the helplessness of the police to fight with those having political clout.

She started the seminar by differentiating between regulated and non -regulated investment schemes. Most of the MLMs, pyramid and Ponzi schemes are run under pretext of chit fund, which do not fall under the SEBI regulation. This keeps these dubious schemes run galore with an unbelievable number of clients resulting 
in eventual scams.

According to Ms Dalal, pyramid schemes are the most vicious of all the schemes. The saddest part is the fact that the ones sitting at the top end do not bear the  brunt of the losses. It is the ones at the bottom half who suffer. She explained to the audience that multi level marketing works on two levels, one with products 
and the other without products. Companies like Rose Valley in West Bengal had come up with glitzy terms like Redeemable Reference Bonds, Secured Debentures to lure the customers into such schemes.

Ms Dalal says that the political connections of these dubious companies allow them to flourish. She said, “A lot of promises are made immediately after the scam is exposed, but nothing happens. At a previous seminar we’ve had officers from the Serious Fraud Investigation Office tell us that they would like to take action but the government opposes this. The only way to ensure you are safe is by focusing on 
what is being sold to you. Keep in mind that if something is too good to be true, it probably is.”

There are a number of variants of pyramid schemes, but Ms Dalal said that, in her opinion, the binary scheme is the most dangerous. She said, “Any scheme that  requires you to draw in a couple of other people is always a scam. It doesn’t matter if there’s a product involved. The only reason there is a product involved  is so that it doesn’t become a money circulation scheme.”

On the issue of steps taken by the government, she discussed at length the steps taken by various states to tackle the issue. She said, “In India there are loads of legislation but very few actions.” Direct selling companies like Amway,  Tupperware attract the housewives first since they are the most gullible. In such 
cases, acts like Prize Chits and Money Circulation Acts(banning), 1978, Drug and Magic Remedies Act,1954 are never properly implemented to protect the interest of the investors.

The seminar ended with a Q and A session where several investors shared their experiences, and came up with ideas to create a forum, which can redress the complaints of the investors, who were cheated.
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