Hyderabad: Last year when the Hyderabad police started investigating the QNet scam case after booking two separate cases following complaints from two groups of victims, it seemed impossible to arrest the main suspects as they were bigwigs like billiards champion Michael Ferreira.
Even after they surrendered before Mumbai police, Hyderabad’s CCS cops’ first attempt to bring them to Hyderabad failed as their lawyer got a stay from the HC to stop the investigation on the same day the CCS team got a PT warrant from the Mumbai court. CCS police then executed a tricky move by executing the second case and getting another PT warrant on a Saturday evening so that Ferreira’s lawyers won’t be able to get another stay order from the HC. In short, it the cops to bring a surrendered suspect to Hyderabad. Still, Ferreira’s lawyers managed to get a stay order in the second case as soon as the court opened on Monday.
“There were two cases against Qnet in CCS. When we tried to get him in the first case, knowing our presence in Mumbai, his lawyers got a stay order on the probe here in Hyderabad. We then used the next case to get a PT warrant secretly. That’s how we got him here,” said a senior police official from Hyderabad adding that even then Ferreira got away the next day.
Ferreira’s lawyers had to merely argue that his company was legally founded to get the HC order. This is the main challenge faced by the police while investigating MLM cases or similar financial scams.
Senior police officials say most defence lawyers use complex financial laws to delay the case and argue against charges of Prevention of Money Laundering Act. The court looks at the legality of the suspect’s firm and not the offence committed. Hence, conviction rate in such cases, is below 10 per cent in the state. The suspect also gets bail and even a stay order on the probe from higher courts.
The inordinate delay in trial and witnesses turning hostile also weaken such cases. Overall conviction rate in IPC cases is just 35% in Telangana.
“A technical issue is that a suspec’'s company must be properly registered and must be legally involved in direct selling. When they get involves in money circulation schemes, it’s an offence. However, in such cases, the court goes easy on suspects overlooking evidence when lawyers argue that the suspect’s firm is legal,” said a senior cop who is an expert in financial crimes.
Investigators say that cases like the QNet scam are clearly an offence under IPC and the Money Laundering Act when there are victims losing money to scammers.
“In these cases victims were given false promises and their money is looted. Money circulation schemes has a pyramid structure. Both are offences,” said the officer adding that it is difficult however to get the suspects prosecuted.
Conviction rate poor
- The court looks at the legality of the suspect’s firm and not the offence committed. Hence, conviction rate in such cases, is below 10 per cent in the state
- The suspect also gets bail and even a stay order on the probe from higher courts
- The inordinate delay in trials and witnesses turning hostile also weaken such cases
- 35% is the overall conviction rate in IPC cases in Telangana
Prevention a challenge
Prevention of ponzi schemes is still a challenge. Cops admit that there is total lack of awareness among the masses about such scams. Police say that since the marketing campaigns are interpersonal, it’s easy for people to get duped.
“The prospects of money chain schemes look attractive. That’s why people fall for it. A matter everyone should understand is that when profits look much more than normal, it is bound to be a trap,” says CCS DCP, Avinash Mohanty.
The real reason why people are so prone to such scam is its structure itself. In MLM schemes, the victims are introduced to the schemes by their close friends, relatives or acquaintances.
“The marketing happens between two close individuals. Each person in the scheme is offered commission for the number of people they bring to the scheme. That’s how it grows and not by advertisements,” said another officer.
There are many cases pertaining to money chain schemes in Telangana and AP, in which several hundreds were cheated. Still, as time passes more scammers surface and more people are looted.
