Big names in Bollywood and cricket have been served notices by the Cyberabad Police in Hyderabad over their role in promoting QNet, a scam-ridden multi-level marketing firm that has allegedly duped lakhs of investors in the country. The police have served 500 notices as part of their investigation into the scam.
Notices have been served to Shahrukh Khan, Boman Irani, Anil Kapoor, Jackie Shroff, Vivek Oberoi and cricketer Yuvraj Singh. Notices were also sent to actors Pooja Hegde and Telugu actor Allu Arjun’s brother Allu Sirish for their alleged promotion and endorsement of QNet.
Cyberabad Police has asked those who were served notices to appear for the investigation within the next 10 days or face legal action.
QNet is a multi-level marketing firm founded in 1998 in Hong Kong by Malaysia based businessman Vijay Eswaran. The company has operations in more than 30 countries and their Indian franchise is operated by Vihaan Direct Selling Private Limited. Their pyramid based business model has been described as a Ponzi scheme by the Economic Offences Wing of Cyberabad Police.
The company faces charges of fraud in several cities across India. Several victims of the scam have filed court cases in the Chennai, Delhi, Bengaluru, Mumbai and Hyderabad High Courts. The Supreme Court is also hearing a case clubbing together 13 cases filed against QNet. Apart from India, cases have also been registered against the firm in Egypt, Rwanda and Sri Lanka.
Speaking to TNM, Cyberabad Police Commissioner VC Sajjanar, said, “These people have been brand ambassadors for this company, endorsing their products and going for their meetings. We came to know they have received huge remuneration and travelled abroad with the company representatives. This is a serious offence.” The official said the celebrities are in violation of section 420 of IPC for cheating and under the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
“If they don’t show up, the law will take its own course. We have collected various evidence against them and we will charge sheet them. Some of those who were served notices are QNet members and senior directors. We are doing our best in Telangana to make arrests. Police have to take action and investigate such companies, as most of the business is being done online youths are getting duped. Those who got victimised in Telangana run into thousands,” the Commissioner added.
How the scam works
The victims of the QNet scam, under the banner of Financial Frauds Victims Welfare Association (FFVWA), have for the past few years been trying to get the company banned in India. The victims of the scam are spread across the country and coordinate their efforts through social media and messaging platforms.
The scammers specifically target people in the age group of 20 to 30 and do not share the complete details of how they work, says Raghav, a member of FFVWA who is based out of Hyderabad.
Raghav does not wish to reveal how much he got conned for but explained how QNet traps young people into their pyramid scheme.
“It’s like a quagmire, if you get into it you can’t come out. They convince people to invest, arrange bank loans and within one month of joining they will reveal their tricks. No one with a conscience will be able to do those tricks they ask you to do. You cannot cheat your colleague, best friend or your college mate, can you?” asks Raghav.
Last month, the police arrested 60 persons associated with QNet for trying to dupe people in the city. Most of those arrested were techies.
“QNet people will not approach you directly, you will be approached by someone you know who is already part of QNet. It could be a colleague or a friend. They will use psychological tricks by asking you questions like, for how long will you work like this, point towards your lack of job security and slowly demotivate you,” explains Raghav. “Your friend, as the QNet representative, will say that he or she has started a business and that they are doing really well in it. Your friend will share pictures of their business trips to Dubai, Thailand or Sri Lanka, etc. but these are not really business trips but just seminars or motivational speeches. The idea is to make you curious and then they will say their business has a potential to earn crores in a few weeks if you put in just 20 hours of work a week online, that the business is like an e-commerce site,” he adds.
The so-called friend will call you again a few days later and invite you for a meeting that can stretch for hours. At this meeting, you will be asked to come well-dressed with your CV, a hype will be created by saying that there are only two spots available. “At the meeting, your friend will be accompanied by a third person who will emotionally attack you, say things like, not everyone can be a Mukesh Ambani and that you need a second income to be comfortable,” says Raghav.
The QNet representative will ask you to invest anywhere between Rs 2 lakh to Rs 9 lakh. “And once the money is transferred, for the next one month they will send you YouTube videos and a few books to read. They will share your number with other representatives over WhatsApp who will tell you that you have done the right thing. This will confuse you, and then convince you to enter the business by signing a contract that says there will be no refund,” Raghav says.
A month later, QNet will make the victim do something called “hot zone” where they will make them call “someone who would do anything for you”.
“You are supposed to call them and say that you have started a business and that you are in dire need of money and that you will return the money in a few months’ time. Once your friend sends you the money, you have to enter your friend into the scheme as well. In the meantime, they will organise some event in Dubai or Sri Lanka or Malaysia where you have to start selling the same story your friend told you to enrol you in the first place. My whole family was scammed like this,” says Raghav, who is of the view that celebrities such as those served notices by the police are influencing youngers by endorsing the scam-ridden company.
“When there are so many cases against the company, how can celebrities like Shahrukh Khan endorse this company? You can see some videos of Anil Kapoor and tweets by Yuvraj Singh promoting QNet. So many young people got influenced by them. The company advertises by saying if Shahrukh Khan is doing this why can’t you? There must be more than 3 to 4 lakh people who got duped across the country. Many don’t come forward as they have been ruined. I have seen people getting divorced and families broken because of this scam. This is an estimated Rs 30,000 crore worth scam,” he adds.
Several media outlets carried a response by QNet to the notices sent out by Cyberabad Police. The press statement said, “In cognisance of Cyberabad Police Commissioner’s statement about the misrepresentation by the independent representatives of QNet in Hyderabad promising quick money and making other false claims about the financial returns from the business, we have launched a detailed internal investigation to ascertain and punish the culprits, and have already suspended several Independent Representatives.”