The victim was later introduced to others posing as “team leaders” during a meeting in Banjara Hills: Reports
HYDERABAD: The police on Friday transferred a cheating case, involving a multi-level marketing scam linked to a QNet-style fraud network, to the Central Crime Station (CCS) from the Banjara Hills police station for further probe. The case was registered against an unidentified accused, who allegedly lured a victim into investing lakhs of rupees in a purported e-commerce business model.
According to the complaint, some known persons approached the victim and projected the scheme as a lucrative opportunity capable of generating monthly earnings of up to `1 lakh. One of them claimed financial gains, including purchasing a high-end phone and clearing debts, to build credibility, police said.
The victim was later introduced to others posing as “team leaders” during a meeting in Banjara Hills. When he expressed financial constraints, the accused allegedly persuaded him to take a bank loan using his personal documents and diverted the funds into the scheme.
The police said the fraud followed a binary MLM structure in which recruits were required to enrol two new members each, forming a chain of upliners and downliners. Earnings were promised based on network expansion rather than product sales. The accused allegedly used persistent persuasion, online meetings, and threats to force victims to recruit others.
The development comes amid a wider crackdown on similar networks. Recently, Hyderabad police arrested 32 persons across Telangana, Andhra Pradesh, and Karnataka in four related cases linked to Vihaan Direct Selling Pvt. Ltd., the Indian franchise of QNet, which has been under scrutiny for alleged illegal money circulation schemes.
Citing a 2008 Supreme Court ruling in ‘Kuriachan Chacko and others vs State of Kerala’, the police said such schemes were a “mathematical impossibility” that collapse once recruitment slows, leaving most participants at a loss.
The police warned that such schemes often target IT employees, job seekers, and homemakers by offering unrealistic returns. They said the accused typically conceal the true nature of the business and later pressure victims to invest and recruit others. Officials reiterated that such binary and Ponzi-like models are banned under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
