All you wanted to know about KBC scam
Last year in 2013 Saradha scam rocked the parliament. This year another Ponzi scheme known as the KBC scam has been raised by the BJP MP Mr. Kirit Somaiya during the zero hour on 17-July-2014. The allegation was that a company called KBC Multi Trade Pvt. Ltd. / KBC Club and Resort Pvt. Ltd has duped thousands of Crores from innocent investors and has fled the nation. This article is all information that I have been able to extract out of newspapers and television news. At the time of writing at least 7 people were arrested in the connection; however the main promoters have allegedly fled to Singapore. At the center of the scam was a company with an army of field agents (mostly investors themselves). Investors were lured with high returns and were often shown big corporate office and were introduced to few people who had received their first payment. Basically it had characteristics of a typical Ponzi scheme; still many educated people also fell in the trap.
Lesson for the common Man from KBC Scam
- Most important control your greed to get rich quick.
- Invest only in recognized schemes. Company should be well recognized to you. Do your homework well.
- Check your scheme at one of these places
- Schemes guaranteeing astronomical returns should always be seen with suspect.
- When in doubt do not invest.
- Understand the credentials of the agent first, if the agent offers you incentives on making more clients it is most likely another multi-level scheme that needs to be probed further.
- If a close family or friends comes to you with a similar scheme offer them help they may be victims themselves this is how MLM frauds work. You will be introduced in the fraud through a close person and you will think many times before filing a police complaint. A fear of getting a close family member getting arrested also prevents many police complaints.
- Last but not the least remember even recognized schemes can go bust hence be cautious and do some research on the background of the company and its financial strength.
What was the KBC Scheme?
Benefits for Investors
- Promise to double money before 3 years (30 month period)
- People were asked to invest Rs. 7,200/- or Rs. 17,200/- or Rs. 57,200/- or Rs. 86,000/- Assuring a three-times return in less than three years, reports suggest the pay back were through postdated cheque to make it look credible.
- Sample this offer:
- Invest Rs. 86,000/- now
- Get Rs. 86,000/- after six months
- Get Rs. 86,000/- after eighteen months
- Then finally get Rs. 86,000/- after thirty months. Thus giving huge three times returns in 30 months.
- Sounds like a major customer benefiting plan isn’t it? The read benefit was in the end the organizer of the scheme who fled with the deposits.
Benefits for Agents
- List of impressive benefits that can draw anyone to take up their agency
- 20-30% in commissions upfront for all money brought into the scheme.
- Make seven members and get a free trip to Mumbai
- Make 36 members and get a free trip to Goa
- Make 81 members and get additional Rs 5,000/- per month.
- Make 250 members and get additional Rs. 10,000/- per month.
- Make 12,500 members and get a bungalow worth Rs. 51 Lakhs as additional benefit.
- Make 25,500 members and get a cash prize of Rs. 1 Crore as additional benefit.
- The company also publically facilitated at least 100 agents who had got them deposits of more than Rs. 1 Crore.
About KBC Multitrade Pvt. Ltd / KBC Group of Companies
- Chief promoters of the company are Bhausaheb Chavan, Aarti Chavan and Bapu Chavan. All are believed to be hiding in Singapore.
- Bhausaheb Chavan a B.com graduate started off as a storekeeper in Nashik. He first lost some money in a multi level company but he realized the evil MLM empire he could himself build. He first founded a company called DBC multi-level marketing company pvt. Ltd. He had tasted success and this led to the establishment of KBC multi trade pvt. Ltd in year 2010.
- Money started pouring in as investors lapped in the offer. The company then diversified its business onto many other areas like hotel business, real estate and financial services. Other group companies formed were Dombivali Fx Rich Bullion Financial Services Pvt. Ltd., KBC Club and Resorts Pvt. Ltd., KBC Ploters Pvt. Ltd etc.
- Soon the company managed to lure thousands of investors across Maharashtra and other states.
- Aarti Chavan is wife of Bhausaheb Chavan allegedly only studies till class 3.
- Bapu Chavan is allegedly son of Bhausaheb Chavan
Recommended Books On Ponzi Schemes
Watch few Video News Report on the KBC Scam
All copyright for the videos rests with the respective news channel. For some strange reason I could not find any story on the topic on YouTube by popular English news channels.
Jai Maharashtra News (Marathi Language)
Photo by DanMadia