Hyderabad: The Cyberabad police busted a fraudulent multilevel marketing scheme on 6 March and arrested 24 persons, including the CEO and COO of the firm Indus Viva. The firm was running a money circulation scheme and had cheated over 10 lakh people to the tune of Rs. 1,500 crore. The police also froze the accounts worth Rs. 20 crores of the accused officials of the Bengaluru-based Indus Viva Health Sciences Pvt. Ltd.
On 20 February 2021, the Gachibowli police station received a complaint from a person who had been cheated by the company. The complainant had invested Rs. 12,500 in the company through his promoters Hari Prasad, Rajabanoth. However, the complainant did not receive any commission on his investment as promised by the promoters.
When he contacted the promoters, he did not get any response. Then he came to know that he had invested in a multilevel marketing business and he would only make money if he brought in new members. Following this, he filed a complaint against the company and its directors. Based on his complaint, the Gachibowli police registered a case under various sections of the IPC and the Prize Chits and Money Circulation Schemes(Banning) Act 1978 .
The arrested persons include the CEO of Indus Viva Abhilash Thomas (40), COO Prem Kumar (39), director of the firm Mandalanen Subramanyam (57), vice-president Imdadulla Shariff (41), and distributors C.K Sujid (33), Noor Mohammed (33), Mulugu Venkatesh (45) and Maale Ranga Reddy (47).
How the firm lures investors
In order to become a member of Indus Viva Health Sciences Pvt. Ltd, a person has to pay Rs. 12,500 and buy the company's products. They will be awarded 100 Point Value. Then s/he will be issued a user ID and password to continue the scheme. Now, the member has to bring in new members - one person to the left and one person to the right - by paying Rs. 12,500 each. Then s/he will earn Rs. 1,000 as bonus. But in order to get these benefits, the member (who has already joined the scheme) has to enroll two other members in the scheme within a week. The member has to enroll more persons to earn more money.
The company has several such schemes, like the President Club Member Plan where a person can become a member by paying Rs. 1,50,000. A member is given incentive depending on the number of persons s/he has enrolled. For example, a member who refers 4,000 members gets a one-week trip to South Africa while one who refers 10,000 members gets a Mercedes Benz and a one-week trip to the US.
The company has its own production unit called Olive Life Sciences at Nelamungala, Bengaluru, which manufactures health and beauty and dietary products.
The police have warned the people against multilevel marketing companies. "Any scheme involving enrollment of members by whatever name so called are illegal and banned activity. The scheme may be called direct selling, binary, networking, referral marketing, joining, introduction multilevel marketing," they said, adding that most of these company products are related to health, beauty, and diet.
The police said that these fraudulent companies conduct meetings in star hotels, resorts, and function halls with a lot of fanfare to attract and motivate investors. They advised people not to attend such meetings and warned owners and management of hotels not to rent their facility to fraudulent companies.