News From Sri Lanka 1

 

16 May, 2007 12:45:42

Beware

Sri Lanka warned to be vigilant against pyramid schemes following arrest of Goldquest leaders

May 16, 2007 (LBO) – An international anti-pyramiding activist has called on Sri Lanka to be vigilant against multi-level marketing schemes that can invade the country following the arrest of top Goldquest operatives in Indonesia.

"Treasure Traders International and, more recently, Canadian Diamond Traders, are similar scams that are recruiting victims worldwide," Robert Fitzpatrick, head of the US-based Pyramid Scheme Alert told LBO.

"I hope that Sri Lanka can maintain its vigilance against these scams, despite their false claims about being legitimate 'sales' companies.

"These are not sales companies, but money transfer schemes that require a huge loss rate based on their designs."

Cult Sell

Some analysts have calculated the loss rate of the double-pyramid 'binary compensation' structure used by Goldquest to be as high as 98 percent, indicating that only 2 percent of the participants make money.

Its products are sold through intensive selling meetings where people are repeatedly given the same message until it is ingrained in their brains in a cult-like fashion.

Goldquest's Quest International (QI) group Chief Executive Vijayeswaran Vijayaratnam is said to be held in 'demi-god' status by his follows.

"Endless chain schemes have almost mystical power over people. They arouse hope, passion and confusion. They promise 'unlimited' income, an almost divine power," Fitzpatrick said in a presentation made when he visited Sri Lanka for a regional central bankers conference against pyramiding.

"Promoters can take on god-like authority and power, since they hold the reigns to this mystical power."

Classic Model

Goldquest's main website now goes as Qatana.com. The firm claims to sell 'numismatics' but its main products are medals.

"Gold Quest claims to be an ordinary multilevel marketing program of the types that are operating openly in the USA and other countries," Fitzpatrick has said earlier on a notice posted at www.falseprofits.com.

"Its business model is a classic MLM program in which each new investor recruits others in an 'endless chain.'

"Little actual retail selling occurs. Each 'distributor' is also the 'customer'," he adds.

News reports from Indonesia said the firm had misused the image of former President Abdurrahman Wahid to recruit his followers into Goldquest schemes.

Previously images of religious leaders, the Pope, Mother Theresa as well as Benigno Aquino had been used to make medallions, which were then sold as 'coins'.

Goldquests activities have been banned in several countries, including, Bhutan, Nepal, and and its officials arrested.

Arrest Quest

Last week, the public face of the organization, Vijayeswaran Vijayaratnam, director Joseph Luis Tomacruz Bismark, and two other senior executives, Donna Marie Glen Imson and Tagumpay Pablo Perez Kintanar were arrested in Indonesia.

The Goldquest kingpins were believed to have been arrested following an MLM upliners' promotional conference called V-Jakarta. The scheme's top promoters are labelled the V-Team.

In 2003 Imson had been arrested in Nepal after conducting a promotional conference together with an Indian national, Tanbir Nijam, according to Nepalese media reports.

Chennai police have also previously arrested Goldquest officials.

The Indonesian arrests stemmed from an Interpol request on a warrant related to a fraud in the Philippines.

"One of the complainants lost $625,000 to the suspects," ABS-CBN News of the Philippines said.

"The suspects went into hiding after a manhunt was launched against them. Interpol also placed them in its wanted list."

International Web

ABS-CBN News quoted Ric Diaz, regional director for criminal intelligence at the National Bureau of Investigation as saying that GoldQuest International, were able to victimize people across Asia adding that the suspects had offices in the region's financial districts.

Interpol also lists Georg Kurt Rocco Rinck as a wanted man, who activists say is the brains behind Goldquest's binary compensation plans.

However in the past Goldquest operatives had somehow managed to get loose whenever they were arrested.

Though Sri Lanka brought an anti-pyramid law to combat Goldquest and even arrested 7 of its upliners, the unit that investigated Goldquest was later disbanded amidst much controversy.

Fitzpatrick says MLM scams "corrupt local officials by offering them a position 'at the top' to gain entry into a chain."

But this week Sri Lanka's Sunday Times said the central bank has resumed investigations into Goldquest, though no mention was made of the progress of the case against operatives caught earlier.

Goldquest has also been channelling money in to Sri Lanka's equity markets without any official action against them so far, though investee firms, especially banks like NDB, have waged a lone battle with whatever means at their disposal to block Quest International (QI group) related purchases.

Sri Lanka now has anti-money laundering legislation in place.

Meanwhile reports said a team of ten police officials were due to fly to Indonesia to bring back the arrested Goldquest leaders, but the company's lawyers were fighting extradition.