Financial Crime World

QNet Pyramid Scheme Thrives in Bhutan: Police Investigating Multi-Million Nu Scandal

Bhutan’s Competition and Consumer Affairs Authority Declares QNet a Pyramid Scheme

In a shocking turn of events, the Competition and Consumer Affairs Authority (CCAA) of Bhutan declared the QNet multi-level marketing (MLM) scheme a pyramid scheme on August 26, 2022. The ban followed multiple reports of locals losing substantial money through the supposed online business.

QNet’s Deceptive Business Model

QNet markets itself as a platform for magnificent returns, but in reality, it deceived many Bhutanese citizens into financial ruin while only a few at the top reaped the benefits. This was not the first time the scheme came under scrutiny, as a gold coin scheme under the name GoldQuest was banned by the Royal Monetary Authority (RMA) in 2003.

Paro Incidents

In late 2023, five Bhutanese residents filed complaints at the Paro Police Station against nine individuals for defrauding them of Nu 2.140 million through the QNet pyramid scheme. Earlier in 2023, a woman filed a civil case in Paro court seeking compensation from someone who recruited her into the scheme. The court ruled in her favor, but several more victims came forward and filed complaints with the police, leading to a charge sheet being filed.

  • The nine suspects have reportedly passed on the money they received to individuals above them in the fraudulent scheme.
  • The police are now investigating to identify and charge the culprits with deceptive practices.
  • The victims include individuals who recently returned from working in Kuwait.

Email Allegations

In a separate incident, a man named Sangay filed a complaint to various authorities and media outlets, revealing that he had lost Nu 614,000 through the QNet scheme. He provided a list of 17 individuals, including 4 Indians and 13 Bhutanese, implicated in the fraud.

  • A phone call to one of the Indians, Nileen Dutta, who is listed as the overall incharge of QNet in Bhutan, revealed he denied involvement in the pyramid scheme but admitted to importing QNet products.
  • However, a source claimed that Nileen Dutta is present in the Bhutanese QNet WhatsApp group and actively recruiting members, raising concerns about the authenticity of his denial.

Widespread Scandal

QNet has its headquarters in Hong Kong but enters Bhutan through a controversial franchise, Vihaan Direct Selling, based in India. The company faces multiple cases and investigations in India over its business model and allegations of cheating members and money laundering.

  • Several Indian authorities, including the Enforcement Directorate, have cracked down on Vihaan’s activities in the past.
  • The company’s products are sold in WhatsApp groups, and higher-tier QNet schemes have attracted many Bhutanese living abroad.
  • With limited monitoring and enforcement, QNet continues to operate illegally in Bhutan, putting many citizens at risk of financial losses.

QNet Products

The QNet products, including silver jewelry, supposed energy-giving glass items, and anti-cancer pendants, are mostly overpriced and lack scientific proof for their benefits, making it a potentially lucrative business for those at the top. Members are promised high commissions for recruiting others into the scheme.

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