Hyderabad: Cyberabad Police on Monday night arrested 58 persons, including 14 techies, for involvement in the QNet scam in which lakhs of people across the country where cheated to the tune of crores of rupees.
Officials froze Rs 2.7 crore in the techies’ accounts on Tuesday and are probing the case. As many as 14 complaints pertaining to the scam were received by the economic offences wing in Cyberabad. The Cyberabad police commissioner warned the public against roping in more people into the scheme, as by doing so, they will be held liable for fraud too.
This pertains to a case of cheating by the Vihaan Direct Selling Private Ltd Company, a sub-franchisee of QI Group in India, marketing under the brand name of QNet.
Cyberabad sleuths had cracked down on various parts of Telangana, Andhra Pradesh, Bengaluru and New Delhi in this regard, Cyberabad police commissioner Mr V.C. Sajjanar said. Of 30 cases registered against QNet in Cyberabad, eight are being probed by the Telangana state CID.
The arrested persons were identified as Rohit Sourab, BE; Poorna, BTech; Vikram, CA; Awad, MBA; Navya Bandi, degree; Mettu Bharath, BTech; Prashanth Bhushan, BTech; Palaash Pal, MBA; Madhusudhan Gochikar, MBA; Kanne Harsha, BTech; Surendra, ITI; Uday Shankar Bhat, BE; Harsh Menon, BA; Mahender, MCA; Bhukya Vinod, MTech; and GVV Kishore Chinna Rao, BTech among others.
“Formerly known as Gold Quest, Quest Net is a Hong Kong-based multi-level marketing company owned by the QI Group,” the commissioner said. “The company invokes several ponzi and binary schemes, vacation packages and more, the business tactics of which are illegal.
QNet, the main subsidiary of the QI Group, was founded by Vijay Eswaran and Joseph Bismark in Hong Kong in 1998. Trevor Kuna, who joined QNet in 2008, was the chief marketing officer and is said have been appointed CEO of QNet.
Mr Michael Ferreira and Mr Malcolm Desai are the shareholders of Vihaan Direct Selling Pvt. Ltd, which operates in a number of countries like India, Philippines, Cambodia, Nepal, Indonesia, Turkey, Saudi Arabia, Russia and more. In India, QNet has appointed Vihaan Direct Selling Pvt. Ltd. as its sub franchisee. Mr Dilipraj Pokkella and Mr Md. Imthiyaz are said to be the directors of Vihaan Direct Selling Pvt. Ltd.”
The Q-net/Vihaan promoters give motivational lectures to unemployed youth and homemakers, saying that their business project will yield them huge profits. Once the customer joins by paying cash or through online transaction to the upliner/introducer, or to the Vihaan account (Qnet franchisee), a username and password is generated, only giving access to the upliner in the Qnet web.
Explaining their modus operandi, the commissioner said that at first, the promoters approach the newcomers with business projects, such as cost-optimisation business, health and wellness products, watches and jewelry, personal care and beauty, tour packages, education packages (SMC MBA Certification) etc. They trap them by sweet talking, saying that they will be part of the QNet kingdom where they can build their own future. They also promise a refund within a month if they want to back out, but purposely drag the time period through training sessions etc.
Once the newcomer joins through a referer/promoter, he becomes an Independent Representative (IR). After paying the money, the newcomer gets some products while the promoter gets commission. The promoter then asks IR to enrol two other members to the commission. As the number of persons increases, the upliners get more money as commission.
“The business model is a simple pyramid scheme, wherein early entrants earn money as the number of IR increase. Those who join late do not earn enough to cover their first outlay and the model collapses,” he said.
“It works as a binary scheme. Down the line the number of persons to be added becomes difficult or impossible and the scheme collapses. The company has combinations of product-based packages, based on their payment. But the new entrants will not have any idea about the products and quality. They do not bother to verify quality, as they are interested only in monetary returns promised to them,” he added....