Multi-level marketing rackets busted; 4 held

HYDERABAD: A US-returned mechanical engineer was nabbed on Thursday, for organising multi-level marketing in the guise of selling Aloe Vera products manufactured by him. A doctor of Prime Hospital is also a key operative in the MLM scheme, police said.Y Sirish Reddy (31) set up his own firm M/s Yeturu Bio-Tech Ltd after completing his Masters in mechanical engineering from the US.He planned to cultivate, process, manufacture and market Aloe Vera products and was into the business since 2006.To market his products, Sirish Reddy used the MLM system.“Any distributor who enrolled others would be given incentives and commissions and distributors divided into seven categories and each of them used to get rewards, gifts and commissions based on sales done by distributors enrolled by them,” additional deputy commissioner of police (Task Force) Raghuram Reddy said.As distributors received good commissions, the business was expanded to other states.“The company has 1,596 franchises and over four lakh distributors,’’ he said, adding the company marketed products worth `16.28 crore during 2010.“Sirish Reddy is pushing sales of expensive products through the MLM system.Dr Suresh of Prime Hospital is one of the marketing agents,” Raghuram Reddy said.Police also froze the bank balance of the company amounting to `59.40 lakh.In another case, Task Force sleuths raided the Moon Life Team Works (I) Pvt Ltd at Sai Krupa market in Malakpet and nabbed three persons for running a MLM scheme.The arrested are P Narayana Chary, M Sambaiah and K Yadaiah.Narayana Chary also started a real estate business, Sri Chandra Farms and Resorts.Raghuram Reddy said the trio purchased land near Aleru and Bhongir at cheaper rates and selling them to members at a much higher price.