• Fraudsters disguise Ponzi schemes as direct-selling or MLM businesses.
• Victims are lured with promises of high commissions and passive income.
• The scam relies on constant recruitment of new members, rather than actual product sales.
• Example: QNet MLM Scam – Thousands of investors lost money in India.

4. QNet Multi-Level Marketing Scam (2013–2015)

Steps of the Fraud:

1. Promotion of Business Opportunity: QNet promoted a business model promising high returns through direct selling and recruitment.
2. Recruitment of Members: Individuals were recruited with the promise of earning commissions by enrolling others into the scheme.
3. Investment Requirements: New recruits were required to make significant upfront investments to join the network.
4. Unsustainable Model: The model relied heavily on continuous recruitment, with little emphasis on actual product sales, making it unsustainable.
5. Legal Crackdown: Authorities identified the scheme as a pyramid scheme, leading to multiple arrests and legal actions against the company’s representatives.