Thursday, 28 July 2016

Kingpin of ‘Crypto mining scam’ arrested

Here is yet another multilevel marketing scam which shocked the authorities and the police alike. The crooks started 3Gcoin with the promise of easy and quick money. Finally the kingpin of the scam was arrested.
The kingpin involved in the scam of ‘3gcoin,’ a multi-level marketing company involved in crypto mining (digital currency), was arrested from Bengaluru and produced in a city Court on July 27. A case was registered under various provisions of IPC and IT Act and the police took up investigation.
According to the Cyber Crime police of Cyberabad, the accused, B M Jagadeesha, cheated people to the tune of Rs 2.89 crore during the last two years. Jagadeesha is the head of operations for the company which is registered in Europe lured gullible IT employees interested in crypto mining. They promised to provide huge profits upon investment. The modus operandi involved active involvement of 500 agents, working on commission basis. The person who introduced the members will get 20 per cent of 30 Euros as commission. The accused promised them that the introducer would continuously get the commission on each introduction. He has collected Rs 2,89,12,500 from one group most of which was distributed as commission to agents. 
At the time of launching the company, they have declared that the value of each Crypto Coin was 30 Euros. They have projected the investors that if they take one crypto coin by investing 30 Euros they would get 128 crypto coins at the end of the second year of investment.

During the investigation it also came to light that there are several other similar websites such as wowcoin, onecoin, richcoin, litcoin, which are involved in similar businesses online. “Hence, it is advised to study about the operations of such companies before investing their hard earned money,” said Md Riyazuddin, Inspector, Cyber Crimes (Cyberabad East), who led the team to Bengaluru.
Corporate Frauds Watch appeals to the people from all over the world not to fall prey to the dubious promises of multilevel marketing companies like Amway. Herbalife, Tupperware which are followed by the crooks like 3gcoin and others.

Thursday, 16 June 2016

Will Amway compensate medical & hospital expenses

RAJAN leaves a new comment "Amway is selling Nutrilite as medicine":

I started using AMWAY's Protein Powder, Calcium, Vitamins & few other products in Feb. Mar. 2014. After using for 2 months or so, I used to feel unusually weak & extremely tired. So I discontinued with these. But weakness persisted even after that. Later in Apr. 2014 I had internal bleeding, which somehow I could not recognize at that time & hence I neglected it. I pulled on like this till Nov. 2014 when I happened to do Blood test along with few other Medical tests, I found My Platelets to be alarmingly low - 20,000 ( it went down to 6000 - 4000 level later on ).
Earlier in Jan. 2014, My Platelets were around 1,02,000, as per my medical check up. I never had any disease of any nature earlier so as to bring down my Platelets to this level & that too at such a short period of time. Even Doctors opined that the Food Supplements as these can do harm, particularly blood related. Friends & relatives told me that there are several news items & articles appearing in the News Papers & in the Internet stating that the Food Supplements are capable of reducing one's platelet levels.
It took almost an year & a half for me to recover from this dreadful disease. The sufferings & agony underwent by me is beyond one's imagination. Total medical & hospital expenses are around 4 lakh. Will AMWAY Compensate this to me. Is it possible for AMWAY to compensate the sufferings & agony underwent by me. I am not the only one to have such a Bad experience as this. Many are there, but they either do not realise this Or they do not report their complaints. As regards the other products other than Nutrilites, I feel they are too costly, which I demonstrated to my near & dear. 
Use of natural ingredients in its natural way as prescribed in Ayurveda is the best solution for all health & skin care issues. 
Be Indian Buy Indian. 

Wednesday, 9 March 2016

Herbalife's And Other MLMs' 2015 Data Show Their Growth Era Has Ended

Robert FitzPatrick shows 'MLM' growth is finished.


Apart from fraud charges, the global performance of Herbalife and other large MLMs shows their era of "growth" is over. The change is not cyclical, but inevitable and irreversible.
Growth in MLM is not real. It relies on new geography. There is no sustained base of brand loyalists or successful salespeople.
For individual recruits, MLM "growth" from recruiting is a requirement. No one profits by personal "direct selling."
While expansion is always promised, data now show contraction, revealing to regulators and investors MLMs inherent flaw and its basis in deception.
Herbalife, Nu Skin and Usana illustrate the reality of saturation. All depend now on China and other new markets, the proverbial "last ones in." China "growth" is ending.
Using global and domestic SEC-reported data, I have previously published articles tracking and evaluating the "growth" and "saturation" status of the commercial sector known as "multi-level marketing", MLM.
Recently released data from Herbalife (NYSE:HLF) most clearly illustrate the new reality of the end of the MLM "growth" era, and this nothing to do with the recent controversies of fraud charges against Herbalife.
The MLM sector includes global companies, Herbalife (HLF), Nu Skin (NYSE:NUS), Usana (NYSE:USNA) and Avon (NYSE:AVP), among about 10 others on Wall Street. Its largest private representative is Amway, the progenitor of all current MLMs. Avon predates Amway as a company but adopted the Amway-model only after 2000, and only partially. There are now perhaps over 1,000 MLMs in the USA!

Wall Street Acceptance of MLM, Pyramid Scheme or Not

After years of confusion on Wall Street, it is now widely accepted that "MLM" is a distinct sector, though its definition and legal status are still contested. It is widely understood that, whatever MLM is, the common denominator of the sector is a shared commodity of human recruits who operate under essentially identical legal contracts, unique to MLM and who serve as the direct and ultimate source of almost all revenue. This common revenue source is gained by inducing the recruits to seek financial rewards tied to the hallmark MLM "business opportunity." This shared and virtually identical "business opportunity" offered by all MLMs always depends upon recruits recruiting other new recruits in a classic "endless chain" proposition.
In putting all MLMs together under one sector, it is implicitly understood that the various consumer products offered for sale and their unadvertised brands do not characterize or define individual MLMs. The various products (usually pills, potions and lotions) are merely incidental elements of the shared recruiting and money transfer mechanism. As to the legitimacy of MLM'sdefining pay-to-play, contractor-recruiting-contractor, endless-chain model, Wall Street generally embraces it but presumably only as long it continues to "grow."
For a full economic and philosophical endorsement of the MLM business model see the booklet by a Dr. Lasdwun Luzes who boldly lays out the case, In Defense of the Pyramid Scheme.

The Party is Over

I will publish a comprehensive summary of 5 years of data of publicly traded MLMs, from year-end 2010 with analysis of the demographic and information saturation factors when SEC reports are available. However, 2015 data already reported by several of the largest MLMs support my earlier analysis that the heyday of MLM is finished, never to return. There will never be another MLM ballooning to the size that some of today's MLMs reached a few years ago. This 35-year MLM pandemic occurred while the FTC deliberately ignored it or administratively dithered over arcane definitions of "pyramid scheme" and some FTC officials strolled through the lucrative revolving door between the FTC and the MLM "industry."
Free from law enforcement, MLM's recruiting rampage carried this American racket to every corner of the globe, with China as the last stop. Now, in the face of global saturation, based on growing public awareness and demographic limits, the larger MLMs can no longer claim "momentum" and "explosive" growth to lure in recruits. The current challenge of these companies today is to manage unfolding collapse while still promising "unlimited income" to new recruits.
  • Amway, the oldest MLM with the longest global reach, reports (unverified, since it is a private firm) its global revenue has recently dropped to its lowest point in 5 years. The decline appears to be accelerating, moving from minus 8% in 2014 to minus 12% in 2015. Much of the decline occurred, Amway claims, in China, which had accounted for the previous spike.
  • Avon, the MLM with the largest number of members, suffered a 34% revenue drop since 2010 (including North America revenues in 2015) and has just sold off its entire North American operation, where the company began over a hundred years ago.MLMs classically saturate earlier markets, requiring constant expansion for "growth."
Investors who still hearken to MLM's historic and enigmatic "growth" rates, even in the middle of global recession, should take note that this recent reversal of fortune is not cyclical but inevitable and irreversible.

Growth, Quote UnQuote

"Growth," as it is conventionally understood, must be put in quotes when referencing MLM because MLMs misuse the term to confuse consumers and investors as part of an entire vocabulary of pseudo-business terms and phrases, including the meaningless term, "multi-level marketing" itself ("multi" actually means infinite).
I see firsthand how effective this linguistic flim-flam has been in sowing confusion from talking with countless MLM participants, providing professional consulting to dozens of Wall Street analysts on MLM, and being interviewed by journalists assigned to report on this or that MLM stirring up local discontent across the world. Consumers cannot discern the indecipherable MLM play plan and are not told of MLM's epic turnover rates among recruits. Without a good grasp of algebra few can untangle the misleading "income disclosures" - among the few MLMs that offer them at all - revealing 99% loss rates. Aiding and betting the concealment and NewSpeak, the FTC specifically exempted MLMs from all financial disclosure requirements as they solicit investments from millions of people each year.

Explaining the Unexplainable

Wall Street researchers, charged with due diligence on behalf of investor groups, earnestly try to apply conventional metrics to MLM in the naïve belief that MLMs compete and grow like real companies. They imagine MLMs gaining customers from competitors with similar products or creating new markets that add to an existing year-upon-year base of brand loyalists. They further imagine that new customers are won over by profitable salespeople who sell products based on market factors like pricing, quality, technology advantage or some valuable differentiation, resulting in profit to them and "growth" to the MLM enterprise.
Yet, these researchers are invariably flummoxed to explain a seemingly inexplicable factor that contradicts their "sales" thesis. This is the extraordinary attrition among adherents, reaching virtually 100% in several years. After signing contracts and paying fees, why would salespeople or even customers abandon a "growing" company with loyal buyers in such numbers and so rapidly? To reconcile the mysterious phenomenon, they bravely search for other market-based factors like variations in start-up fees.
For investor purposes, analysts do their best to exclude deception and fraud as factors. They must do this in the face of otherwise inexplicable consumer behavior, massive consumer loss rates, cult marketing techniques by MLMs and continuous churning of what they define as "salespeople" and "customers" without being able to determine exactly who is selling to whom or what the real products are.
In reality, none of these market-based factors applies or has anything to do with growth or decline in MLM. Quitting rates turn out to be the same across the board, having nothing to do rational buying, fee levels, or diligent investing. Indeed, conscious buying or investing "choice" isimpossible in MLM since no one is ever fully or adequately informed when recruited. MLMs sell anon-existent income opportunity. Therefore, conventional sales and marketing laws and definitions that govern real commerce, in which actual value is exchanged, do not apply.

Non-existent Opportunity

In describing the marketed MLM "income opportunity", I call it "non-existent" not editorially but based on a tedious analysis of the bizarre MLM pay formulas that transfer most commission dollars, per transaction, to the top of an enormous recruiting chain, and impose burdensome pay-to-play purchase requirements on new recruits, serving as the chief revenue source. My description is further supported by de-constructing the available income disclosures that reveal 99% loss rates among all MLM adherents, year in and year out, including those who pay the much higher fees to start out at higher potential pay rates.

Take the Test

Here's a test, requiring only arithmetic, that should settle all question about the existence or absence of an MLM "income opportunity." Take any of the larger MLMs and add together all the people that have ever paid money to become eligible for the fabled "income opportunity", dating from the company's inception, and then ask how many or what percentage of all of them ever did earn a profit or are gaining it now. No one does this in the media or on Wall Street, perhaps because the answer would be too shocking to accept. Hundreds of millions of people, over three decades were obviously churned through a mill of false income promise only to "fail." Even those the MLMs claim are only "discount buyers" universally disappeared. A tiny cadre of recruiters at the top profit directly from those losses, year in and year out. Yet, millions more are still successfully recruited? The specter of commercial deception on such a scale, while the FTC looks on, is literally unthinkable for some analysts and reporters, much less ordinary consumers.

Not Growth

Referring to growth, I employ the phrase, "as it is conventionally understood," because MLMs do not grow according to how that term is conventionally used in business. MLMs that "grow" are only outpacing attrition each year. There is no large base of salespeople or customers upon which to "grow." There are no loyal or repeat customers of any consequence. Only if recruiting outpaces attrition, can revenues be larger YOY. The sales force and the customers did not grow. They were replaced. Collapse occurred more slowly than recruiting accelerated, and the scheme was thus able to give an outward appearance of organic growth, unless one looks more closely. Real growth requires success and satisfaction of earlier buyers and salespeople. MLMs, however, leave almost total failure, abandonment and disappointment in their wake.

The Meaning of No-Growth in MLM

Before citing more of the available company data and their significance, it is important to consider the meaning of MLM's recently arrived at "no-growth" status from the consumer' interests, not just the investors'. A no-growth conventional company can obviously remain profitable and valuable to customers. However, in MLM, growth is not a market condition; it is a promise on which value-for-payment-received is based. It is therefore an existential requirement. But, without capacity for outpacing collapse, MLMs now have no basis at all for claiming that new recruits have a chance at success and therefore cannot plausibly pretend to offer value in exchange for payment.
Let us be clear in recognizing that individual success in all MLMs is not based on personal sales or "direct selling" as it is called. In 15 years of work in MLM, I have not found an individual who earned sustainable profit without recruiting other recruiters. No one in MLM has or does gain sustainable profit from individual door-to-door selling, an outmoded and unnecessary method of product distribution. Add in absurdly high prices, an upside-down commission plan that rewards the recruiter and oppresses the street-level retailer, unprotected territories, constant inundation of competitive salespeople, no advertising allowed, punishing inventory purchase requirements, and the MLM "direct selling" business is revealed as an utter sham.
MLM "growth" is not an added benefit but a requirement, since 50-80% of the entire sales force and customer base (for the most part, one and the same) disappear annually and the remaining market shrinks. Yet, for any significant number of new recruits to succeed, the overall chain must get larger and longer. It is this contradiction that leads to the conclusion of many experts that the business model is "inherently" unsustainable and deceptive. An MLM enterprise can thrive only on the failure of its churning and "losing" adherents.

Mimicking Growth

Up to recent times, geographic expansion and brief periods of local increases in prospects, usually brought on by economic distress, could at least mimic sustainable growth or perhaps support the claim that recruiting could alwaysoutpace attrition, giving some recruits a chance to "win" though at the expense of their recruits. But, if revenue records show local and globalcontraction, on what basis can the MLM company base even a bogus promise to the "last ones in" of viable profit opportunity based on "infinite" recruiting?
Properly understood, the new status of no-growth-due-to-saturation lays bare the realities of MLM for regulators and investors who might still be charmed by MLM's historic "growth", promises of perpetual growth or the newest predictions of return to growth.

Nu Skin: Pop and Drop

It has already been shown that MLM's greatest icons, Amway and Avon, have experienced dramatic drops in revenue recently. Nu Skin, also one of the larger and older MLMs, serves as a further illustration of the trends in maturity and reveals "growth" as merely a reflection of the "last ones in."
Nu Skin's China "growth" exploded almost 400% between 2012 and 2013, catapulting China to Nu Skin's largest market and accounting for 32% of total revenues. Then in just two years, revenue was nearly cut in half. Between 2013 and 2015, Nu Skin's global revenue dropped by $929.7 million. The drop in one market, China, accounted for about half of that global drop.

Usana: Chasing Nu Skin

Usana is a commercial clone of Nu Skin, both enterprises coming out of Utah, that font of MLM startups and "food supplements." In saturation status it is only a year or so behind Nu Skin before hitting the China Wall. Extreme slowdown has already been reached.
Consider the drastic change in rates reflected in language in the end of Q4 8Ks of 2014 and 2015. In 2014, Usana trumpeted net sales growth in Asia Pacific (including mainland China) of 34.1% compared to same period a year before. It also added that it achieved a 25.4% "sequential" increase over the 3rd quarter of that year. This is the classic MLM "exponential" growth achieved with mesmerizing and illusory endless chain incentives offered to virgin recruits in newly invaded territories. A year later, there is no bragging of a sequential increase. It had dropped to just over 2% and annual "growth" for the quarter was just 5.4% over the same period a year ago.
Between 2013 and 2015, Usana "grew" by $200.5 million globally, now edging close to a billion in total revenue. But during this same time frame, it "grew" in Greater China by $169.47. China, a market that Usana only recently entered, accounted for 85% of Usana's global "growth" in the 2013-2015 period. It opened in mainland China with an entirely new line of goods from a small, obscure China-based company selling "baby" products in a country that limits families to one child! Yet, with a new product, in a new land, Usana reports that Greater China is now approximately half the company's total global revenue! Breaking it down even closer, reveals thatUsana is dropping in the areas of Greater China where it entered first, like Hong Kong. Go figure.
Analysts may deduce that all the rest of the world, accounted for only 15% of Usana's "growth" in the last two years. Excluding Greater China, Usana grew just 4% in the last two years. China, the "last ones in", sustained the company and enabled it to tell hopeful recruits in all other countries that it was explosively "growing", though in many places, even its home country, the USA, it was actually in contraction. Unless you have cousins in China, the actual data showed that the chance of your building a large local downline based on friends and family, ignoring the financial consequences to them, was bleak indeed.

Usana USA "Growth" Obscured?

Analysts that question the sustainability of Usana's earlier rocket-like growth (almost entirely in China, it turns out) might want to know of Usana's performance in the USA, where it all started. Shouldn't this be the strongest area, where it is best known, faces no currency "headwind" and should have the largest base of satisfied adherents over more than 20 years of operation?
This is a question I have special interest in since "saturation" in MLMs occurs in earlier markets where demographics and actual failure rates finally take their toll. It turns out that Usana makes it difficult to know for sure USA revenue and recruiting status. Is the "drop" concealed while the "pop" is touted?
The reported data does show steady but modest declines in the USA revenue, -10%, while mainland China grew +332%, but, incredibly, Usana has confused the definition of "USA." In 2000, Usana began merging parts of Europe's data with the USA's.
From Usana's Q-2, 2000, "Since the beginning of the second quarter of 2000, the Company's United Kingdom market has been serviced from the United States and Is no longer an operating segment of the company. The company's operating segments are based on operating geographic regions." Usana reported in Q1 2012: "North America - United States (including direct sales from the United States to the United Kingdom and the Netherlands), Canada, Mexico, France(1), and Belgium(1) … The Company commenced operations in France and Belgium during the last week of the first quarter of 2012. Net sales and customer count information for these two markets have been included with the United States for the quarter ended March 31, 2012."
Say what? Europe is counted with North America for net sales and customer count? And Usanais adding new countries in Europe, making "North America" an expanding market?
The seemingly modest and gradual decreases in the "USA" that Usana reported to the SEC are contradicted by Usana's income disclosure reports to consumers, not to the SEC. These disclosures are based only on the real North America, not a fictional one presented to shareholders and the SEC. In its North American Average Total Earnings for 2011 the total of USA Associates that purchased at least one product (active) was reported as 135,590.
Then, when Usana updated this USA data disclosure with 2014 data, only for geographic North America, Usana reports only 61,400 associates qualified as active by making one purchase. That's a 54.7% domestic decline in three years. Shareholders seeking insight into Usana'sfuture, especially its future in "explosive China" may want to know exactly how Usana is doing in the 50 states of the USA, really. It is the harbinger for China.

Herbalife: China and Latinos Sustain the Illusion of "Growth"

Herbalife came into being two years after a controversial FTC decision reversed earlier rulings against MLMs and allowed Amway's pyramid plan to continue, based on its sworn testimony that it was a retail sales company, not a recruiting scheme. Herbalife cloned the Amway play plan and after 20 years of operation, Herbalife entered the China market in 2001, one of the earlierMLMs to go there.
Now, after just 14 years in China, revenue from that country is almost entirely sustaining Herbalife, offsetting saturation in most of the rest of the world, including the USA, its home market.
  • Between 2013 and 2015, Herbalife declined in global revenue by $142 million. But in the same period revenue "grew" in China by $370.9 million. Excepting for increases in China, Herbalife's global revenue would have dropped over 9% in the last two years instead of -0.34%. As with Amway, Nu Skin and Usana, China is Herbalife's "last ones in," keeping afloat any claim at all for "growth."
  • In the last five years, Herbalife's reported annual revenue increased by $1.7 billion. 38% of that "growth" occurred in mainland China alone and at the same time, Herbalife entered 16 other new countries, adding to the "growth." Without geographic expansion,Herbalife's is in significant decline, but it is now running out of new countries.
  • Between the end of 2012, when scrutiny was focused on Herbalife by the Pershing Square fraud thesis presentation, global revenue "grew" by $397.7 million, while China alone grew by $567.7 million. If you take out the China "growth", (increase in China only) during these three years of controversy, Herbalife global revenue, would show a negative 4%. Even with China and other new countries entered, Herbalife still showed global revenue decline in the last two years.
  • If globally Herbalife is dependent on China, in the USA, it is clinging to the lifeline of Latino immigrants, a virtually new country it invaded inside the USA to offset information and demographic saturation among the rest of the population. Yet, despite this new base of vulnerable recruits, revenue declined in the USA over the last two years after spiking upon a massive and customized recruiting campaign aimed at low income Latinos and other new immigrants.

Robert FitzPatrick (copyright 2016)

Wednesday, 2 March 2016

Serious Fraud Investigation Office asked to probe fraud by 258 companies in last 4­year: Government

NEW DELHI: Serious Fraud Investigation Office (SFIO) has been ordered to probe alleged fraud in 258 companies in the last four years, Parliament was informed.
Of the 258 cases, investigations have been completed in 116 cases and reports have been submitted in this regard to the ministry while in 8 cases, probe have been stayed by the courts, Corporate Affairs
Minister Arun Jaitley informed Lok Sabha in a written reply.
Further, the ministry has ordered filing of prosecution against companies, directors and other officers for several non­compliance under the Companies Act as recommended in the investigation report in 102 cases, where the probe has been completed. SFIO is the investigation arm of the Corporate Affairs Ministry. "From 2012­13 and up to January 31, 2016, the ministry has ordered investigations through SFIO into the affairs of 258 companies allegedly indulging in fraudulent or  illegal activities," Jaitley said.
He also said the government has taken various other measures to curb frauds like defining 'fraud' in the new Companies Act, stricter corporate governance norms and statutory status to SFIO.
In a separate reply, the minister said several complaints have been received pertaining to cheating of small investors, particularly by the companies involved in Chit Fund or  Multilevel Marketing activities.
On the basis of such complaints, SFIO has been directed to probe 167 such companies till January 2016. Of these, investigation has been completed in 77 cases and directions to file prosecution have been ordered in 68 cases.

Tuesday, 19 January 2016

Mumsnet Members create 'Timeless Vie' (the cryptic antithesis of 'Forever Living').

See original image

See original image

Readers of this Blog might like to visit 'Timeless Vie' (the cryptic antithesis of 'Forever Living').

See original image

After witnessing robotic 'MLM' recruiters amongst their own friends and families, a number of members of the British Internet forum, Mumsnet, created the concept of Bot-Watching (i.e. laughing at the scripted antics of 'MLM'adherents, but with the serious goal of shining a light on the problem).

Mumsnet members have recently created 'Timeless Vie' -  a outrageously funny exposure of 'MLM' cultic rackets in general, but particularly those which have mainly preyed on women. 'Forever Living Products' seems to be the most virulent 'MLM' racket of this type, currently infesting the UK.

Mumsnet has brought together the most significant group of insightful, and determined, people in the UK ever to start to examine the 'MLM' phenomenon. They have quickly uncovered the extraordinary scale, and underlying cultic nature, of the problem: the disturbing results of which have been all-too evident on social media.

 'Timeless Vie' is a valuable attempt to halt the spread of the 'MLM' fairy story, but its creators accept that they have little chance of influencing the most gung-ho 'MLM' fanatics.

David Brear (copyright 2016).

Wednesday, 30 December 2015


By Apurva Venkat & Vandana Kamath,
Bangalore Mirror Bureau | Dec 25, 2015, 04.00 AM IST

Christmas is here and social media is abuzz with celebrations of its spirit. Lurking in  the dark though, is an online scam that has been turning expectations of those  participating in it into heartache. Secret Santa, a gift exchange programme, has lured many people into its fold. The exchange programme invites people to join a chain of gift 
givers (and hopeful receivers) through social media platforms like Facebook, Instagram and Twitter. The promised deal is that every person in the chain stands to get 36 gifts against one that they make.
A person interested in being part of the chain, has to post their agreement on their wall, and invite six more participants. The scheme encourages the person to send a gift  valued below Rs 600 to a person whose name and address is at the top of a long list of participants that is sent as a private message. Once they have made the gift, they remove the name of the person in first place, and replace it with the person in the second place. The new recruit then puts their name in the second place of the list.
Social media experts call it as nothing but a pyramid scheme scam. While this has gone viral in the city only recently, the UK and USA governments have already warned their citizens against falling prey to such scams and termed them illegal. While most victims of the scam are sending books as gifts to strangers, there are others who have been gifting cosmetics, chocolates or Christmas gift packs. Of course, most are doing it in the hope of getting back similar gifts.
Chaitanya KM, Kannada film director, who sent a book as a gift under the scheme, told Bangalore Mirror, "I sent one book and seven people have asked me for my address but I have not received anything in return. I haven't heard about this scam but I do not mind gifting a book anyway without getting anything in return." Some hope that Secret Santa will work as an eye opener for city social media users.
Sunil Abraham, executive director of Centre for Internet and Society, said, "This seems to be a rumour to which many are falling prey. This will work like net-user education, and people will get wiser after they are cheated. Some form of awareness needs to be done because at least two per cent of people will respond to this." 
According to Facebook rules, multi-level marketing on the platform is prohibited. The Facebook agreement terms state that engaging in things like pyramid schemes is not allowed. Also posting personal details on Facebook makes one vulnerable to many more identity fraud that can follow.
Not only are pyramid schemes like this one is also mathematically impossible, they're also against Facebook's terms of use. The list of theoretical participants multiplies into  millions of people in just a few steps of Secret Santa. The idea sounds feasible but it is not. Going from step one it starts with six people, who each invite six more, who all send gifts to the person in the number one spot before they're moved off the list. 
However, as it spreads, the number of people involved increases far more than would ever take part — if the 36 each invite six people then the total number of participants is 216 going on to 1,296 and so on. Only those who start the schemes or enter in the second round stand a chance of receiving something in return and even in that case it is just one gift not 36 as the post claims. Those who join later never ever reach the top of the 

Wednesday, 7 October 2015

Never-ending story of white collar crimes

·        Law-enforcing agencies need to be empowered to take criminal cases to logical end

M V Syam Sundar

The other day the High Court at Hyderabad was annoyed at the progress of investigation into the misdeeds of real estate company AgriGold which has collected deposits worth about Rs 7,000 crore from millions of customers throughout several States in the name of real estate and failed to repay the deposits. The High Court had even called for the presence of the AgriGold chairman Avvas Venkata Rama Rao and the Additional Director General of Police Dwaraka Tirumala Rao in the court to explain the delay in repaying the deposits to the customers.
AgriGold is not the first case and it is not going to be the last in cheating the gullible in the name of selling products, services, real estate and what not. It is apt to recall that Subroto Roy, chief of Sahara International, is still behind the bars for not returning the deposits worth about Rs 40,000 crore to the depositors. Surprisingly, the Andhra Pradesh CID police did not take Avvas Venkata Rama Rao even into custody let alone arrest and send him to jail for reasons better known to them.
The then superintendent of police of West Godavari district, Dr Kolli Raghuram Reddy, filed a criminal case against AgriGold on the charges of illegally collecting deposits against rules of the RBI. The then Nellore SP Senthil Kumar had also filed criminal case against it. However, at the time the West Godavari police are raiding the offices of AgriGold and seizing the records, the mysterious forces acted in lightning speed and transferred the case to the AP CID. The rest is history. It is really mysterious as to who was the ‘real estate political personality’ that acted swiftly to transfer both the SPs. The case would have gone into the cold storage forever but for the proactive judiciary that has taken the case into its hands.
In spite of the criminal cases filed against AgriGold, the company is doing its business without any hindrance. Several of its agents and the customers who were in deep despair had even committed suicide. Still there is no serious action against the company but for the occasional statements by the politicians that justice would be done to the depositors.
Before AgriGold, there was Golden Forest Ltd which collected Rs 2000 crore in 1990s and disappeared without a trace after criminal cases were filed. Noticeably that AgriGold chief Rama Rao worked for Golden Forest before he started his own venture.
Pearl Agro, popularly known as PACL, also collected deposits worth Rs 40,000 crore from public. Till the judiciary took initiative, there was no police action despite the plethora of complaints against it. Till to date, the company did not return deposits though the SEBI ordered their refund.
A number of companies have cheated and have been cheating the gullible and decamped with thousands of crores of rupees. For instance, Speakasia, the Singapore-based online service company duped people for Rs 3,000 crore. The Andhra Pradesh CID busted the case following a complaint lodged by an NGO, Corporate Frauds Watch. However, the money could not be traced by them. It is the Delhi police who pursued the case and tracked the criminals who finally returned with the booty and started real estate business at Darjeeling.
A number of companies like NMart, Gemini Techno, V-Can Network shut shop long back and nothing is heard about the criminal cases filed against them. Not surprisingly, some of these companies started legitimate businesses with the ill-gotten money hoodwinking the law-enforcing agencies.
Apart from these, there are a number of direct selling companies which are still cheating people and amassing enormous wealth. Amway India, Herbalife, Tupperware, Forever Living Products and other members of Indian Direct Selling Association (IDSA) have blatantly been demanding legislations in their favour to continue their fraudulent business activities. It is apt to recall here that Andhra Pradesh High Court in its judgement in 2006 categorically stated that the business model of Amway is illegal. However, the adamant company still pleads for a separate legislation in support of its illegal business model.
The former head of Amway India and four others did not turn up the other at the criminal court. The magistrate was serious and ordered all the accused to be present in the court by next hearing. This is the scant respect these people have for our judicial system. It is apt to mention here that the Enforcement Directorate has served notice to Amway India for illegally siphoning out Rs 2,000 crore from the country to the USA. However, nothing is heard about it later.
It is high time the law-enforcing agencies were empowered to pursue the criminal cases without political interference and the ill-gotten wealth should be confiscated.