News From Turkey

 

Ponzi scheme victimizes thousands in Turkey

Friday, May 28, 2010

ISTANBUL - Daily News with wires

The Turkey branch of an international Ponzi scheme that collected millions of dollars from thousands of people has collapsed after police raids against the company.

Quest.net, which defines itself as an “international direct selling brand that utilizes network marketing combined with e-commerce,” victimized nearly 20,000 people in Turkey, according to government officials. The company, which is headquartered in Hong Kong, has been banned in many countries.

The scheme operates like an investment chain. People begin to invest an amount of money to be a part of the chain and then find new people to invest. The invested money is distributed between members while a big chunk of it flows up to the top of the pyramid.

The Quest.net system, which recruits members with the promise of becoming rich, has been banned in many countries including the United States, Iran, Albania, Sri Lanka, Malaysia, Indonesia and Afghanistan.

The Turkish Ministry of Industry and Trade has launched an extensive study on the issue, and nearly 60 members of the system have been taken into custody.

No official representation

The company does not have an office in Turkey. Nevertheless, it recruits members in home offices located in Istanbul districts, such as Bahçelievler, Kadıköy, Esenler, Zeytinburnu and Güngören.

The Ministry of Industry and Trade has filed a criminal complaint, alleging aggravated fraud, against Quest.net executives. The company has victimized nearly 20,000 people, taking millions of liras from them, said Minister Nihat Ergün, speaking to Anatolia news agency on Thursday. “The company has collected a great amount of money, varying between $570 and $2,500 from those people. Nearly more than 20 million liras have been raised,” Ergün said.

Turkey met with the Ponzi scheme in September 1997 with the “Titan” company. Hakan Kenan Şeranoğlu, who was previously a hairdresser in Germany, and his friend Vahit Gülal had established the scheme in Turkey’s western city of İzmir, collecting a total of 8.6 million liras from nearly 30,000 people. The founders and top executives of the system faced lengthy prison terms in 1998.