After Jintex, two more network schemes, FOREX and VISAREV collapse

IMPHAL Dec 7: Two major network schemes, FOREX Achievements and Visarev have failed to pay investors of the state for two consecutive terms exposing yet again the pyramid scam operating through the internet.

Post the Jitnex scandal which happened in August last in which investors were duped to the tune of more than Rs. 40 crores, investors of FOREX and Visarev are left in a similar predicament as no returns have been given to the investors by both companies in the last two months.

There are no legitimate offices for both networks in the state and no authorized person representing the said companies are available for to lodge complaints.

The ‘uplines’ of the networks are the sole authorities that the complainants approach at present.

Investigating the dealings of FOREX Achievements, IFP found that the scam started from July 15 this year and the company is allegedly based at Chile, South America.

The company pays out 2% of the invested money daily through Liberty Reserve, an electronic money transfer company.

As investors failed to get returns since Nov 6 last, the ‘leaders’ of the network faced complaints from investors and sent a team to locate the franchise office of FOREX Achievements based at Mumbai.

The team consisted of Surjit, Rajen and Santosh who are also investors themselves.

They went to Shop No. 45, Viceroy Court, Thakur Village Kandivalli, Mumbai a week ago and found that the FOREX office had closed since a few months back. This was confirmed by the owner of Peaches Health Spa who is the current occupant of the premisis. The network office was run by one Dharminder Singh.

IFP managed to locate a room at Paona Bazar near Cine Still Photo studio, where the top leaders of the network conduct business.

Identifying himself as a leader, one Laishram Korou from Heingang stated that the payments from the company have ‘slowed’ down.

When asked by IFP about the fate of the more than 600 investors who had joined the network recently, he said ‘There are many uplines who have amassed huge amounts. We will form a core committee of these uplines and try to compensate the losses of the investors by contributing from our own pockets’.

He disclosed that more than 10 ,000 investors from the state have joined the network and invested from Rs 10,000 to Rs. 1 lack each since June and a transaction of more than Rs. 60 crores was made through an Axis Bank account registered in the name of the company.

Similarly Visarev has failed to pay investors for two consecutive times. There is no office of the network company in the state. Investigating the matter, IFP called up one of the main leaders, Kumar Kom who is presently at Bangalore.

According to Kom, the Visarev company faced a legal suit from investors of the state and he is presently at the business office at Bangalore to look into the matter which is the reason for the hold up.

He assured at first that the investors will get their returns from Dec 15 onwards.

On questioning him if he will bear the responsibility if it turns out otherwise, he said ‘I am also an investor and I am not an authority for the company’. He failed to oblige IFP’s request to provide a phone number of the Visarev company to further approach the matter from the company’s point of view.

According to the website of Visarev, the company is based at Kuala Lumpur and the website was created on 23 May, 2010 and will expire on 22 May 2011.

The website contact has no mention of having an office at Bangalore.

It was learnt from reliable sources that top leaders of Visarev are not in the State at present. Another source told IFP that Visarev has exhausted it’s investors and have created UniPay International to rope in investors to pay the defaulting amount of the Visarev Investors.

According to www.pyramidscheme.org , such fraudulent pyramid schemes operate through the internet to lure investors. The modus operandi is to pay earlier investors with the money of the latter investors in the chain. The scamster at the top happily pays out commission to his downlines to get more investments.

Only those at the top of the chain are the winners and the majority are the losers . It is a mathematical fact that a pyramid scheme also called a Ponzi scheme is bound to collapse eventually due to lack of investors.

According to IFP investigation on such scams on the internet. A forex (or foreign exchange) scam is any trading scheme used to defraud traders by convincing them that they can expect to gain a high profit by trading in the foreign exchange market. Currency trading “has become the fraud du jour” as of early 2008, according to Michael Dunn of the U.S. Commodity Futures Trading Commission. “the market has long been plagued by swindlers preying on the gullible,” according to the New York Times. “The average individual foreign-exchange-trading victim loses about $15,000, according to CFTC records” according to The Wall Street Journal. The North American Securities Administrators Association says that “off-exchange forex trading by retail investors is at best extremely risky, and at worst, outright fraud.”

“In a typical case, investors may be promised tens of thousands of dollars in profits in just a few weeks or months, with an initial investment . Often, the investor’s money is never actually placed in the market through a legitimate dealer, but simply diverted ‘“ stolen ‘“ for the personal benefit of the con artists.”

The forex market is a zero-sum game,meaning that whatever one trader gains, another loses, except that brokerage commissions and other transaction costs are subtracted from the results of all traders, technically making forex a “negative-sum” game.

These scams might include churning of customer accounts for the purpose of generating commissions, selling software that is supposed to guide the customer to large profits, improperly managed “managed accounts”, false advertising, Ponzi schemes and outright fraud. It also refers to any retail forex broker who indicates that trading foreign exchange is a low risk, high profit investment.

An official of the National Futures Association was quoted as saying, “Retail forex trading has increased dramatically over the past few years. Unfortunately, the amount of forex fraud has also increased dramatically.” Between 2001 and 2006 the U.S. Commodity Futures Trading Commission has prosecuted more than 80 cases involving the defrauding of more than 23,000 customers who lost $350 million. From 2001 to 2007, about 26,000 people lost $460 million in forex frauds.