View Full Version : Doctor arrested for MLM fraud....how many more MLM Frauds??

31-10-2011, 12:46 PM
HYDERABAD: Task Force sleuths nabbed managing director of an international multi-level marketing (MLM) firm, who duped over two lakh people to the tune of Rs 347 crore, from his flat in Kondapur on Tuesday .
Acting on an alert from the Kerala police, a Task Force team raided Satya Sai Apartment (http://timesofindia.indiatimes.com/topic/Satya-Sai-Apartment) in Kondapur and arrested Harish Babu Maddeneni, 41, managing director of Nano Excel Corporation Limited.
Harish, who studied medicine in Russia (http://timesofindia.indiatimes.com/topic/Russia), decided to make some quick money and set up Nano Excel Corporation Ltd in 2007. As per the claims of the accused, the company markets 11 imported 'Nano Technology' products through their distributors and franchises. To become a distributor or franchisee, one has to pay amounts ranging between Rs 6,000 and Rs two lakh and get a reference from a senior. For each new enrollment, the distributor gets 20% commission.
Apart from launching operations in the four southern states, Harish had also opened franchisees in the UAE (http://timesofindia.indiatimes.com/topic/United-Arab-Emirates) and the Philippines (http://timesofindia.indiatimes.com/topic/Philippines). As the company was paying commissions promptly, the number of customers reached up to 2.06 lakh in four years.
"The firm has collected Rs 347 crore from its chain of distributors. Of it, about Rs 302 crore was returned in the form of commissions. However, the entire business is illegal as per the AP Prize Chits & Money Circulation Schemes (Banning) Act 1978. In the last few months, 236 cases were booked in Kerala alone against the firm and one agent Patrick Thomas was arrested," additional DCP, Task Force, K Raghuram Reddy said.
Documents showing the details of the MLM scheme were seized from the medical graduate's office in the city. Police said that Harish has Rs seven crore worth of properties in Hyderabad. The arrested person along with the seized property would be handed over to the CCS police and the Enforcement Directorate (http://timesofindia.indiatimes.com/topic/Enforcement-Directorate) (ED) would also be intimated about the case, the additional DCP said.