Criston Dior Shopee or CD Shopee used bank guarantees issued for buying fabric to lure unsuspecting people for its 'investment' chain-marketing scheme

A Reserve Bank of India (RBI) investigation and intervention, following an alert by Moneylife has led to Union Bank of India (UBI) filing a First Information Report (FIR) with the Central Bureau of Investigation (CBI) against a chain-marketing scheme run by an outfit called M/s Criston Dior Shoppe.
 
Such an obvious rip-off of a famous French deluxe brand was unlikely to fool most savvy and educated people, but the email propagating this brand came to us from Latur in Maharashtra, where people are more likely to be conned. While all chain marketers offer extraordinary returns based on a plan that ropes in new customers, this one was sold with a difference.

It claimed bank guarantees (albeit fake) from a nationalised bank-in this case UBI-to create an illusion of safety and assured returns. We wrote to the RBI on 6 January 2010 and have now received details of the action taken.

RBI investigations revealed that Criston Dior Shopee or CD Shopee, is a partnership firm set up by Virendar Rai and Manjheet Singh of Haryana. It manufactures and retails readymade garments and has a unit at Manesar. On 29 October 2009, the firm opened two current accounts with UBI's Dwarka Branch in New Delhi. It obtained two guarantees from the bank for procurement of fabric. The RBI discovered serious lacunae in the process and has recalled and cancelled the guarantees. The CBI complaint has been lodged on the basis of a fraud investigation and other systemic issues.

However, the chain-marketing racket linked to the firm was a little different. CD Shopee runs this multi-level marketing (MLM) scheme through two websites www.cdshopee.com  and www.cristondiorshopee.in. Access to first site is restricted; the second site is still under construction.

CD Shopee offers to double your returns in 12 months and "guarantees" it. The minimum investment requirement is Rs10,000 plus Rs2,000 as registration fee.

 CD Shopee claimed to return 8% of the invested amount every month through post-dated cheques for 12 months. After the stipulated period it promised to return the full amount invested by a person. It enhanced the credibility of this promise through an agreement signed on a Rs100 stamp paper by CD Shopee with a bank guarantee issued by UBI.

An investor in the scheme was offered bigger benefits on introducing more investors to CD Shopee-these included 10% direct income, royalty income, binary income etc. As it turns out, the bank guarantee, which was the basis of attracting investors itself was fake. UBI lodged an FIR with the CBI on 9 March 2010.

While this is one aspect of the investigation, CD Shopee also claims an account (05710500378) with ICICI Bank in which 'investors' are asked to deposit money. The scheme was clearly attracting plenty of investors when Moneylife wrote to the RBI in January. We have five payment slip copies which alone show deposits of Rs28.32 lakh between 21 December- to 31 December 2009 at the Latur branch of ICICI Bank. CD Shopee is just one example of how ordinary people are lured by the chain-marketing racket and duped.