• A fraudulent company promotes investment and recruitment-based income opportunities.
• Recruits invest money and are incentivized to bring in new members instead of selling actual services/products.
• Eventually, later investors lose money while early investors profit, leading to financial collapse.
• Example: QNet MLM Scam.

4. QNet Multi-Level Marketing (MLM) Scam

Steps of the Fraud:

1. Promotion of MLM Opportunities:
   • QNet representatives promoted business opportunities, encouraging individuals to invest in the company’s products and recruit others.
2. Investment and Recruitment:
   • Participants invested significant sums to purchase products and were incentivized to recruit new members to earn commissions.
3. Realization of Unsustainable Model:
   • Many recruits found it challenging to sell products or recruit others, leading to financial losses.
4. Accumulation of Complaints:
   • Numerous participants reported being misled about the profitability and legitimacy of the business model.
5. Legal Actions and Arrests:
   • Authorities investigated and arrested top representatives for running a pyramid scheme and defrauding investors.