In what can only be described as one of the longest running pyramid schemes in history, TVI Express popped up on my radar this week after apparently claiming a fresh new batch of victims in the city of Nagpur, located in the Indian state of Maharashtra.

For those unfamiliar with TVI Express, the scheme launched around 2008 and the basic idea is you pay $200 USD or so to join and then via a reverse matrix, once enough new matrix positions have been bought (either by newly recruited members or existing members repurchasing positions), members earn a commission.

Attached to each position is access to a series of third-party travel offers, but they have nothing to do with MLM compensation plan side of the business (including commissions paid out).

Ironically the TVI Express pyramid scheme initially launched in India, however it wasn’t long before they’d exhausted the local recruit market and shifted focus to recruitment abroad.

Thus far the scheme has spread to parts of Africa (largely outlawed), Australia (declared an illegal pyramid scheme), the briefest of stints in the US and more recently appears to be slowly spreading across Asia (at the time of publication, the Phillipines appears to be the primary recruitment target).

What I found suprising with this recent news then was how on Earth TVI Express managed to wind it’s way back into India and ensnare a whole new crop of victims.

As per the Times of India,

Yet another investors’ scam has surfaced in the city. Hundreds of citizens, including many railway employees, have lost thousands of rupees in the scheme run by TVI Express.

The mention of “railway employees” is of particular interest as it seems this is the primary vehicle used to lure recruits into the scheme.

The scam exposes links of some Central Railway officials who played a key role in developing a chain of investor-employees using their influence.

Affected CR employees said around 200 station masters and pointsmen from Ajni yard and equal number of other staff from other departments were made members. The entire business, it is learnt, is controlled by a few employees in DRM’s office.

The employees who invested failed to get returns over the year as promised and now want their money back. Those who lost money also include South-East Central Railway (SECR) employees.

“By paying Rs 15,500 to the railway officer, who was an up line distributor, we were told to make two members to get back Rs 31,000 immediately.

Even after making two members, the promised amount was not credited to our accounts. We feel cheated as to get back Rs 31,000, at least 14 members need to be made down the line, which is impossible,” complained Sushma Sutaria (name changed) and others from Central Railway, who are victims of TVI scheme.

The fourteen number referenced is of course related to the positions within the TVI Express pyramids. Spillover can help to fill these matrices but typically you’re on your own.

And in India of all places, where surely the TVI Express name can’t mean much given past victims falling for the scheme, I imagine recruiting people into it would have been pretty difficult.

That said, how some railway officials managed to kickstart their own new recruitment pool is bewildering. Although it appears that “employer  influence” might have been at play:

“Two years ago, I invested Rs 45,000 but I could not get the promised Rs 31,000. The networking scheme was totally operated by three-upline distributors, all Central Railway employees. They used their influence to make us members.

We paid cash and were told that even if we failed to make a single member, we would get back our Rs 15,500 or at least Rs 12,000,” said another employee.

Whilst some railway employees are complaining about the money lost, baffingly others still are claiming that they were “unwillingly” made to join:

“I was made a member unwillingly. If TVI Express sells membership, and rewards members who sell more memberships, that makes it ponzi scheme, especially when the membership has little or no benefit,” said a commercial department staffer.

Ignoring the mislabelling of a recruitment scheme as a Ponzi scheme for just a second, claiming to be made an unwilling member most likely reveals a culture of self promotion within the railway industry.

It’s no secret that India’s railways are huge and all you’d need is a few ringleaders running around check flashing to get the recruitment ball rolling. And that pretty much appears to be the case here.

On October 8, a group of aggrieved women investors even tried to take on movement inspector Komal Gajbhiye at Central Railway who, along with his wife and daughter, was instrumental in recruiting investors.

Gajbhiye admitted to TOI he had promoted the scheme for a year and made 7-8 members.

When employees and people in general raised questions they were silenced by showing how promoters bought cars and flats through commission money.

“At monthly functions held at Ambedkar Bhavan off Wardha Road, investors were lured with several promises that were never fulfilled,” said some women investors.

At these functions, Gajbhiye recruited new members by telling them ‘he bought a car with commission money‘.

When confronted over this however, Gajbhiye “threatened” TVI Express members and refuted their claims, stating he ‘had obtained a loan‘ to pay for the car (as well as a flat, also allegedly bought with TVI Express commissions and used to lure new recruits in).

In his defense for ringleading the recruitment drive for a pyramid scheme, Gajbhiye claims that any complaint made against him is just ‘propaganda by employees jealous of him‘.

I cannot be held responsible for failure by employees who did not complete the chain,” Gajbhiye said.

Despite the fact that ‘railway service conduct rules do not permit employees to indulge in such business‘, to the best of my knowledge nobody has been fired over the railway recruitment scheme.

On the victim side of things…

Many among the group of 52 investors even borrowed money and mortgaged gold jewellery in the hope of getting good returns.

“My dreams have been shattered. My son is suffering from sickle cell. I badly need money which I don’t have. I mortgaged my jewellery to become member,” said Rupali Borse, a victim.

And as far as the authorities going after those responsible on a local level, short of an independent investigation going forward, things aren’t looking good with ‘investors (scared) to file an FIR against those who lured them‘.

An FIR is a “First Information Report” and in India, is required for local authorities to take up an investigation into a case.

Why they are scared was not mentioned, although putting two and two together it’s probably a combination of fears over job security and possibly Gajbhiye’s threats.

With the exposure and coverage TVI Express repeatedly gets all over the world, I personally have no idea how people continue to get sucked into the scheme.

If the business model itself wasn’t enough to convince you that you weren’t going to make anything without recruiting, it’s not like the internet is short on information about the scam (BehindMLM itself aside).

This Gajbhiye fellow sounds like your typical pyramid scheme recruitment shill  and it’d be interesting to know who he was in contact with on the TVI Express side of things. Whether it’s the limited scope of the scheme at a local level or the fact that they’ve written it off as just too difficult, the Indian authorities don’t appear to be too keen to investigate or get involved at this point.

At least not without an FIR being filed, which from the sounds of it isn’t going to happen.

 

Update 1st November 2012 – Despite initially appearing to be unconcerned with railway management coaxing empoyees into the TVI Express pyramid scheme, a few days after the intial news story above broke out,

Brijesh Dixit, divisional railway manager (DRM), Nagpur Central Railway, said he is ready to probe the matter.

“Victims of the scam should come forward to complain that they were cheated. I will also have to see whether officials were doing business in their own name or family members,” Dixit told TOI.

“If the employees were signed up as members of the scheme in the office, it is a serious issue,” Dixit added.

Sources said that after TOI exposed the scam on Saturday, the victims have become active and want their money back. One of the groups is also planning to meet DRM Dixit on Monday (29th October).

Some retired railways officials who lost money have moved the railway vigilance department and even the Central Vigilance Commission (CVC).

Curiously, the followup TOI article claims that TVI Express is based out of Indonesia. Personally I’d always believed it to be initially based out of India itself, whilst claiming deceptively that they had rented private mail boxes corporate offices in Europe.

Meanwhile, supposedly as a result of Monday’s meetings, ringleader Gajbhiye has fronted up a refund for at least one of the members he recruited:

Pointsman Atmaram Govinda was given Rs15,500 on Tuesday by movement inspector (MI) Komal Gajbhiye working in the operating department.

Govinda, who had no knowledge of the scheme, had been influenced into investing in it due to Gajbhiye’s official position.

Seemingly as slippery as they come however, despite only returning the money on Tuesday, Govinda claims that Bajbhiye ‘asked (him) to say that the money was returned two months ago‘.

And despite Divisional Railway Manager Dixit’s claims he’s ready to probe the recruiting going on within the railway department (which he hasn’t done yet), it seems he has a ways more to go before he has railway employees convinced:

There are many more employees who want their money back but are not coming forward to lodge an official complaint fearing victimization at their workplace.

Apparently the reason hasn’t gone ahead yet is due to pressure from the top recruiters own railway bosses protecting them from a possible probe. And in such an employment culture, no wonder those at the bottom are afraid to speak out.

 

Update 4th November 2012 – Following an internal investigation by the Divisional Railway manager, those primarily responsible for the TVI Express recruiting within the Nagpur railway department have been dealt with…

…sort of.

Central Railway divisional railway manager (DRM) cracked the whip with two movement inspectors being transferred and relieved with immediate effect on Thursday evening.

Senior divisional operating manager (SrDOM) Satyendra Kumar confirmed that Komal Gajbhiye and PD Raut were the two to be shifted.

Unfortunately however,

Gajbhiye, who looked after transfer and postings of train guards and station masters, has been moved to Hinganghat as station master, which incidentally is a plum post. Raut has been shifted to Chichonda which falls on the Delhi route.

Putting two and two together, rather than actually punish the ringleaders (which would be firing them and reporting the matter to the relevant authorities, the moves seem to be more about getting Gajbhiye and Raut away from those they’ve scammed.

Why?

there is no action against major players like Deepak Soni, SS Karnale, JL Joshi, Smriti Dayani and others. When asked, Satyendra Kumar said, “Transfer of two officials itself is a big punishment. This is the maximum I could do,” he said.

Many employees, who were lured by Soni using his official position, say as he looks after disciplinary and appeal rules (DAR), they became TVI members through him.

Soni reaped maximum benefit of the scheme. Yet, the administration is reluctant to take action against him. He accompanies top officials on inspections and is said to be close to them.

Sounds to me like it’s a case of being “too high up in the chain of command to fail”. Again, why the authorities haven’t been involved I don’t know, surely one of those involved would have entertained the idea of heading down to their local police station to file a FIR.

Or maybe in Nagpur even the police can’t touch railway management officials…