QNet: Hyberabad Police Arrests 58 Members of the MLM in Fraud and Cheating Cases Worth Rs1,000 Crore
Continuing to crack the whip against agents of controversial multi-level marketing (MLM) companies, the Cyberabad City Police has arrested 58 independent representatives (IRs) of QNet for their involvement in 14 cases of fraud and cheating worth Rs1,000 crore. Those arrested by the police include three bank employees.
According to VC Sajjanar, commissioner of police at Cyberabad, primary investigation reveals that those arrested by the police have cheated unemployed youth under the pretext of giving them a job and collected around Rs1,000 crore in the MLM scam
"Total 58 persons were arrested in 14 cases, which were registered against QNet and Vihaan Direct Selling Pvt Ltd in different police stations of Cyberabad are arrested. The godown of Vihaan Direct Selling at Bangalore and the office of Transview Enterprises (a marketing agency for QNet products) are seized. An amount of Rs2.7 crore in the bank account of Vihaan Direct Selling is frozen. The bank accounts of accused persons involved in the cases are also seized," Mr Sajjanar says.
According to the commissioner, this is a case of cheating by the Vihaan Direct Selling Pvt Ltd, a sub-franchisee of QI Group in India marketing under brand name of QNet. He says, "This case is cracked down by the sleuths of Cyberabad in various parts of Telangana, Andhra Pradesh, Bengaluru and Delhi, in which 58 persons were arrested in 14 cases, which were registered against Vihaan Direct Selling in different Police Stations of Cyberabad. There are total 30 cases registered on QNet Cyberabad. There are eight cases, which are under investigation with crime investigation department of Telangana Police."Talking about the modus operandi of QNet and Vihaan, Mr Sajjanar says, at first the QNet and Vihaan promoters say to the new comers that there are various business projects such as cost optimization business, health and wellness products, watches and jewellery, personal care and beauty, tour packages, education packages (SMC MBA Certification). "The promoters trap the new comers with sweet words stating that they will be a part of the QNet Kingdom where they can build their own future. They say that if the new comers who paid money do not like QNet business packages, they can claim their refund within a month. But in fact, the promoters will drag the one month period by giving motivational classes, training sessions and also providing books such as 'The Parable of the pipeline', 'Questions are the answers', 'The Business School', 'Who Stole the American dream', 'The Copycat Marketing 101' and 'Talk the talk', to the newcomers and tell them to read all the books to gain knowledge over the business. Once the new comer joins into the QNet or Vihaan business through a referrer or promoter he becomes IR. After paying the money, the new comer gets some products and the promoter gets commission. The promoter then says to the IR that to get money he/she has to enrol two other members and they in turn join two each other new comers. As the number of persons increases down the line, the upline get more money as commissions."
"The QNet and Vihaan business model is a simple pyramid scheme in which the early entrants earn money and as the number of IR increases, finding more IRs (new comers) to join becomes difficult or impossible. IRs that joins late does not earn enough to cover their first outlay and the model collapses. It works as a binary scheme. Down the line, the number of persons to be joined becomes difficult or impossible. The scheme collapses at a point of time," the Cyberabad police commissioner added.
Out of the total 58 persons arrested, 51 are from Hyderabad, five from Bengaluru and one each from Delhi and Eluru
