SPC World Limited, a multilevel marketing company, has embezzled around Tk268 crore in 10 months under the guise of operating an e-commerce business.
Posting attractive advertisements in digital and video streaming platforms like YouTube, SPC World has cheated 2.3 million customers by entrapping them into multi-level marketing schemes.
Based on recent allegations raised by both local and expatriate customers, the Dhaka Metropolitan Detective Branch (DB) of police arrested six individuals from the Kalabagan police station area, including SPC World's Managing Director, Al-Amin Pradhan.
The company used to post advertisements on social media like, "Open your own SPC ID, and earn up to Tk20,000 a month sitting at home. I earned Tk600 from SPC World without shopping."
During the interrogation of the arrestees, the DB learnt about the traps of online multilevel marketing (MLM) schemes like Destiny, which were conducted under the guise of an e-commerce business.
During the interrogation, Al Amin Pradhan admitted that SPC World Limited had launched an e-commerce business in January this year without government approvals. They had initially started the business with five products.
With e-commerce at its forefront, this app-based online MLM company targeted unemployed and expatriates in the country.
They would provide an ID number in exchange for Tk1,200 per person, luring unsuspecting individuals to earn lucrative commissions from the comforts of their own homes.
Upon receipt of the ID, the customer was instructed to influence others to open more IDs. The first person would receive a commission of Tk400 to open three IDs. Eventually, the company would make Tk3,300 (from all four IDs).
Customers were unable to make cash withdrawals and were forced to buy cheap products from SPC World Limited for an equivalent amount.
The person who opened the first ID was called first generation. To receive the commission, he has to get at least three more people to open IDs. IDs opened in the second phase were called second generation.
To receive their commissions, second generation customers had to get nine additional people to open IDs. This strategy was deployed to increase its roster of clients.
According to DB sources, only a few thousand customers amongst 23 lakh customers had received commissions in 10 months. Most gave up their investment amounts as they were unable to fulfill the requirements.
Nazmul Hossain, assistant commissioner of DB's Cyber and Special Crimes Unit, told The Business Standard that ordinary people invested without being aware of the facts and got duped.
"First, second and third tier customers received small commissions, while others got no commissions at all. This is how SPC World Limited managed to swindle around Tk250 crore by opening IDs," he said.
Nazmul said that millions of customers had been created in a matter of months. People had been lured by the app-based platform and low investment requirement.
"Had they not been arrested, they would have cheated 4.5 crore customers in the next one year alone," added the DB official.
In order to open the ID, a customer had to make a deposit via mobile banking platforms such as bKash, Nagad and Rocket, said DB sources.
Other customers received their ID numbers only upon depositing money with ID references.
Using their IDs, customers received Tk 1 for every click on an advertisement, without buying any real products. However, the deposited amount was not accessible to the customers.
SPC World Limited had about 5 lakh customers in 18 countries, with most being expatriates, said DB sources.
One customer, Sajib Rahman, told The Business Standard that he learnt about the company from a friend's Facebook post. He later downloaded the app from Google Play Store, and opened the ID with Tk1,200.
"I got three family members to open IDs for a commission of Tk400. But as those family members were unable to get more people to open IDs, my commission eventually dried up. So, most customers gave up in frustration and stopped working," he said.