Patna: The Hyderabad police has come down heavily on multi-level marketing company QNet which has been accused of running one of the biggest Ponzi scams in India, allegedly cheating as many as three lakh people in what has come to be colloquially known as the ‘QNet scam’. As part of the crackdown, as many as 57 persons have been arrested by the police in 14 cases filed in police stations in Cyberabad.
Elaborating on the crackdown, Hyderabad Police Commissioner M Mahender Reddy left open the possibility of more arrests, saying:
“We had several complaints about the company. We will make more arrests. We have frozen Rs 2.7 crore of the company and have raided their office in Bengaluru. Those arrested are ones who enrolled in the scheme and urged others to enroll in it,” Reddy said.
Documentation relating to the crackdown accessed by Republic TV lists the matter as a case of cheating by QNet. Apart from the 14 cases in which the 57 arrests have been made a number of other cases have also been filed:
ABOUT THE QNET SCAM
During a past legal proceeding relating to the alleged QNet scam in the Bombay High Court, the then prosecution accused QNet of running a ‘Ponzi’ pyramid scheme whereby it duped people to invest money, with the investments ranging from Rs 30,000 to Rs 7.5 lakh each. The prosecution said that the money invested in QNet’s scheme was then “laundered” and diverted out of the country. QNet CEO Micheal Ferriera is also being investigated.
The crackdown has come three days after the government revealed that it had ordered an investigation against 110 companies for their alleged involvement in fraudulent activities over the past three years, according to MoS Corporate Affairs P P Chaudhary.
In a separate written reply, the minister said that the Serious Fraud Investigation Office (SFIO) has been ordered to probe such companies where they are “allegedly involved in fraudulent activities, including through illegal accounts/ transactions”. The SFIO comes under the Corporate Affairs Ministry.
“12 complaints were received by the SFIO against the scam of QNet during the period 2013-14 to 2018-19 (till November 30, 2018) and these were forwarded to the respective Registrar of Companies for necessary action,” Chaudhary said in another written reply.
“The ministry had ordered an investigation into the affairs of Goldquest International and Questnet Enterprises India (now known as QNet) and assigned the same to the SFIO on July 28, 2010,” the minister added.