Article by Priyam Shukla
IX Global, A Utah based company is running a multi-level marketing business in India with a product, ‘education services for trading’, indirectly not permissible by the authorities. Their customers say that they feel ‘manipulated’ by the company’s promoters. The COVID-19 affected economy has led to many scammers coming up with ‘economically promising’ schemes which the people fall prey to. IX Global is suspected to be one such scheme according to a complainant who has lodged a formal complaint with the police against the company in Mumbai. “IX Global projects itself in the disguise of an economically fancy scheme and misuses the current economic condition to pitch its fraud scheme to the people.” said the complainant. The complainant also said, “after complaining about my grievances with a high ranking official in the company, he wrongfully intimidated me with his political might. I have also mentioned that in my complaint.”
Although there are many such companies in the market; which raises the bigger concern of the aptness of the regulatory measures by the government for MLM companies, IX Global is questionable on many of its aspects. We reached out to the company and they said that we were “not briefed with the true facts” and have thus decided to publish this article.
However, here are the facts which we found:
To start with, the members of IX Global call it an ‘educational company’ as it offers forex and binary ‘education’ and ‘alerts’. Along with this, this company also provides automation services for trading to its ‘members’ but that makes the claim of the ‘educational company’ quite sceptical. The reason the word ‘member’ is used instead of ‘employee’ is because this company is also involved in a multi-level marketing business. In fact, most of the company’s earnings come from MLM, as indicated by its co-founder Viraj Patil. Maharashtra’s direct selling guidelines prohibit the Direct Selling entities to deal in ‘online education’ and ‘online trading’. This would be explored further in the article. The company said in the written reply that they were, “educating the people who are interested in doing online transaction of our country about the pros and cons of trading online.”
There are strong reasons to believe that this money is illegitimately going out of the country and/or being laundered within the country, with periodic ransoms being given to politicians who protect them. From registration irregularities to past record of the founders and the current modus oprandi of their business, multiple questions follow on the legitimacy and legal compliances of IX Global.
How the scheme is pitched to the people:
The scheme is pitched, but not directly, through the Instagram or Facebook pages of IX Global. The high-ranking network marketeers of IX Global lead the people to the zoom meetings through their social media posts. These posts are very utopian, fancy and idealistic in nature. They use emotional tactics to persuade people which crosses such a limit that it indicates a targeted social engineering malice. The complainant has mentioned Savio Pereira, Viraj Patil, Priyanka Khanna and Ramesh Chaudhary in his complaint. These people are often seen in such videos.
Financial independence is unnaturally idealised in these videos as they go on to show off their exorbitant amount of earnings and talk about their high standard of living. The economic slowdown in the pandemic is used as a tool to appall people of the economic losses they might face if they do not invest their money in a scheme like this. The words ‘life changing opportunity’ and ‘financial independence’ are overused in these videos and the subsequent zoom sessions.
In the zoom sessions, they explain about the product followed by the network marketing scheme. In these meetings, they invite people who claim to be benefitted from the scheme and they show exceptionally huge profits. “The language used in the testimonies and by the session hosts is so well curated for the purpose that it leaves a hypnotising effect on the people and they sign up without questioning its legitimacy and return of Investment.” said an IX Global member who wished not to be named.
The company says, “every company has its own style and strategy for promotional activities which they are free to do in fact anybody can do the same keeping in mind the legal aspect of that country.”
What happens after people sign up for the scheme?
After they sign up, they have 2 objectives –
- Managing to earn their monthly resubscription fee ($125 or $145 or $180 – depending on the plan)
- Earning monthly profits over that amount.
They have 2 ways to do that –
- Earning through trading (by utilising the company’s ‘trading advice’ and ‘education’ and/or using the ‘trading automation software’). It is interesting to see that the company provides a trading platform called MT4 to the users.
- Network Marketing.
If they manage to add 3 members to sign up for the scheme, their monthly subscription fee is reimbursed through the commission and a one-time-non-recurring bonus they get. To get to sustain their monthly subscription fee, they have to go through a herculean task of adding members and keeping check on the added members’ work. This is a task which not many people are efficient enough to do. To meet out this expense, they resort to the trading platform. The problem starts right there. The trading platform is a third party overseas trading platform which allows brokers, which are not registered with RBI or SEBI, to function as well.
MT4 platform is infamous for its use by scammers and shady brokers. According to an IX Global user, it requires a minimum balance of $1000 for the users to be eligible for cashing out the profits which they get over that $1000 amount. An average Indian would invest only $100 in his trading account, unaware of the fact that multiplying it to $1000 would not be an easy task. Considering the rate of return of automation softwares provided by IX Global, C3PO and R2D2 it could take an investment of $100, 1-4 years to reach the $1000 mark. This figure is uncertain due to unavailability of accurate rate testimonials to us.
The bot C3PO projects a drawdown value of 67.76% which means that this is the amount percentage which can go in loss from your trading balance.
Caption – 67.76% drawdown value of C3PO bot provided by IX Global
Traders say that 20-35% drawdown is the most which they can risk. Beyond that, there is a high risk of money getting lost.
In fact, if we see current monthly statement of this bot, it is going in 2.59% loss. (This amount is bound to fluctuate (either upwards or even lower) with the passage of time.
Caption – C3PO bot going in 2.59% loss in March.
During the course of our investigation, the complainant told us, “IX Global has entered into the Introducing Broker partnership with TP Global. TP Global is their overseas broker who is registered on MT4 trading platform, and consequently, the users of IX Global log in through TP Global interface on MT4 for their trading.” This way, IX Global does not act directly as a broker but gives the responsibility to TP Global, a foreign company. The commission on trades is split up half between TP Global and IX Global. Although the monthly trends might be in losses, the companies are making commission on trading nevertheless.
If such bots are not able to make money and the users are incapable of organically trading by receiving forex/binary alerts from IX Global, they may, and often do, start spiralling on a downward trajectory. Since there is no encash able profit before the $1000 dollar profit mark, most of these domestic retail investors or users revert to the soul crushing tedium of multi-level marketing. Even in one of the pitching meetings, Priyanka Khanna, a member high up in hierarchy in the marketing chain, admitted that the ‘network marketing part’, which was supposed to be her plan B, became her Plan A (see a similar Facebook post here). This situation is equivalent to a restaurant chain claiming to be earning more from selling its franchise rather than from selling its cuisine. Let it be noted that the company omitted to comment on this in their reply to our inquiries.
A vicious Circle: The Debt Trap
When people are unable to earn through trading in such companies, they get into multi-level marketing to manage their subscription fee and then earning the commission from it. When members are not able to add more members to the scheme, to meet their re-subscription fee they end up investing from their own savings to make up the difference for the month, hoping against hope for better luck the next month. So eventually, the users could end up investing much more than they initially intended on investing with IX Global. This spirals into a debt trap if the person is facing repetitive failures. When a member misses his subscription payment, they are forced to exit from the scheme and their entire investment is appropriated by IX Global.
IX Global’s customer satisfaction policy doesn’t inspire much confidence either. Many have complained of the company’s lack of transparency in its communication. “I had some grievances with the company and I was messaging them. Astonishingly, instead of offering a chance for dialogue, Viraj Patil blocked me on Facebook and IX Global’s YouTube channel.” said another IX Global member.
In response to our query, IX Global said, “anyone who is connected to India doing the business in online does so at their own risks and consequences.”
Given their expertise at dodging questions with meaningless sound bites, it is perhaps natural for one to doubt the company’s intentions. Since a substantial portion of investments made with IX Global is disappearing overseas without a trace, such apprehensions may not be without merit. And it most certainly warrants a closer scrutiny.
The Dark Origins of IX Global
IX Global, in itself is not as suspicious as the people associated with it, along with their past. Two key people, Joseph Martinez – CEO and Viraj Patil – one of the co-founders, were both working at another Multi-Level Marketing company, called Kuvera Global. The products offered by that company and the modus operandi are similar in nature to that of IX Global.
Kuvera Global is another Utah based multi-level marketing company which functions mostly in Europe and India. Not surprisingly, perhaps, given the similarities between these two firms, there have been numerous complaints against Kuvera Global too in the past (See here, here, here, here, here). It was, and is still, working under the SEC registered company called Investview. US Commodity Futures Trading Commission (CFTC) back in 2018 documented that the company was illegally offering forex and binary trading advice to retail investors in the United States. In legal terms, it was illegally acting as a Commodity Trading Advisor. After an investigation, Kuvera Global company was subsequently fined $150,000.
Apart from the CFTC, the securities regulatory authorities of France, Portugal, Spain and Belgium have delegitimized Kuvera, and warned against investing through Kuvera Global. Interestingly, even while all of that was happening, Joseph Martinez and Viraj Patil were agressively promoting the IX Global. In fact, during our investigation we found When we go to their Facebook posts from that time, we found multiple mentions of ‘#IXMovement’. This raises a pertinent question, is IX Global merely a shell company for the legally troubled overseas company, Kuvera Global? Or is there something even more diabolical going on here?
Whispers in the dark:
The deeper we dug, the harder it became to trace the origins of these two companies.
IX Global, despite being so obviously affluent (it claims INR 7,00,00,000 as the highest monthly income of its network marketing chain), is conspicuous by its absence on LinkedIn. The CEO and co-founders keep a very low profile there. The company is based in USA ,but there are no indications (based on the company’s social media accounts) of any operation on as large a scale in the US as there is in India.
Joseph Martinez – CEO
The man behind both companies too is also as inscrutable as these companies themselves; a man hard to pin down. The CEO, Joseph Martinez claims to be a former US army veteran but his LinkedIn profile (a curiously low profile account painstakingly uncovered using OSINT tools) says that he is still serving with the US Army
Even more surprisingly, there are no indications of his previous affiliations with Kuvera Global on that profile. Adding to the mystery of ‘Cotton Eye Joe’, on that profile, Joseph Martinez claims to have multiple formal degrees, however, in this Youtube video, he explicitly states, “I don’t have a degree, but I have been able to make a lot of money…”
Helen Boyle– Co founder
Just as Joseph Martinez , one of his other cofounders of IX Global, Helen Boyle, is also an elusive figure. In one of the zoom meetings, she claimed that she was close to Richard Branson while working with Virgin Atlantic and that she has served as a homicide detective with the Manchester Police. Neither were there any proofs shown to back up her claims during the meeting, nor are either of these claims borne out by even repeated searches on the internet. Further , in the same meeting she proclaimed herself a bestselling author of the book, ‘She is unstoppable.’ However a cursory Google search was enough to establish are that neither she , nor her book appears to have met with much commercial or critical success. It may be noted that Helen Boyle too was a member of the troubled company Kuvera Global as well.
Viraj Patil is the most recognizable face associated IX Global. Smart, suave, and charming, Patil is often the host of the company’s zoom meetings. Sharply dressed and eloquent, Patil’s forte seems to be salesmanship and persuasion. He is known to deliver impactful sololoquies on the ‘life changing opportunities’ available to prospective members with IX Global. A showman to the core, he often lionizes himself while extolling the virtues of IX Global , even going to the extent of inserting popular songs in the background to amplify his purported success in several videos. Using a page borrowed straight from Bollywood , he is quite accomplished at carefully projecting both an aura of affluence & accomplishment, as well as making an emotional impact on his audience mesmerizing them with dreams of an impossible future. However, his tactics are reminiscent of those used by Pawan Malhan, who used similar tactics to enthral his followers. Mr. Malhan was running eBizz, a similar multi-level marketing company which cheated more than 17 lakh Indians.
It can be successfully argued that such fantastical and over the top portrayals of top-level in functionaries are indeed carefully crafted strategies aimed solely at manipulating their target audiences both psychologically and emotionally. The members, in turn, blinded to the realities by such rose-tinted lenses of future prospects often do not hesitate to cross social boundaries with the sole objective of promoting their schemes.
In fact, Alexandra Holyk, writing for the Eyeopner, observes “People who are seriously involved tend to behave like cult members.” Not surprisingly, the well argued article is quite critical of Kuvera Global, and rightly so.
It may also the noted by the uninitiated readers that Utah, the place in USA where IX Global is registered, has acquired quite the notoriety for hosting a large number of such Multi-Level Marketing companies. According to a study conducted by Jon M. Taylor of Consumer Awareness Institute, USA (chapter 7), at least 21% of the people of Utah were, at some point of time, involved in Multi-Level marketing business but almost no one reported profits to the tax preparers. In the same study, it was highlighted that 99% of the lower hierarchy people in the pyramid of MLM end up losing their money.
Is IX Global Following legal compliances for carrying out business in India?
To begin with, IX Global does NOT exist. IX Global is NOT registered with the Ministry of Corporate Affairs in India. The company which Viraj Patil and Joseph Martinez have registered is called IX Academy instead.
On top of that, according to the direct selling guidelines of Maharashtra, the services of online education and the indirect services of trading being provided by IX Global are not permitted.
The company claims, “IX Global is operating in India through IX Academy, and is doing its business absolutely in a legal manner, and in accordance with the laws of the land.” But, as even a casual reader may infer after reading the paragraphs above, that most certainly doesn’t seem to be the case.
In addition, the complainant provided us with a screenshot claiming that the direct sellers in this company are collecting the payments in their personal accounts. This raises further red flags as , even on its own, alone provides enough grounds for launching an investigation into possible GST fraud.
The complainant also has claimed that the company is not complying with KYC norms. “I was asked documents for my KYC approval only after I expressed my desire to leave the company. With such a decluttered member registration system, I am sure that they are not complying with KYC norms.”
According to Maharashtra’s Direct Selling Guidelines, a Register of Direct Sellers should be maintained.
However, responding to our queries regarding the same, IX Global claimed, “we are following proper terms and we are having agreements signed by the distributors (sic).”
But perhaps, the most note worhty aspect of this ‘arrangement’ is that IX Global is not a registered Forex Dealer with Reserve Bank of India. In the RBI notification RBI/2013-14/265, A.P. (DIR Series) Circular No. 46 dated September 17, 2013, it is clearly mentioned that ‘All AD Category I banks who offer credit cards or online banking facilities to their customers should advise their customers that any person resident in India collecting ,and effecting / remitting payments directly /indirectly outside India in any form towards overseas foreign exchange trading through electronic/internet trading portals would make himself/ herself / themselves liable to be proceeded against with for contravention of the Foreign Exchange Management Act (FEMA), 1999 besides being liable for violation of regulations relating to Know Your Customer (KYC) norms / Anti Money Laundering (AML) standards.’
It was stipulating,
‘If it is observed that the concerned AD category I bank has failed to carry out the measures as outlined above, Reserve Bank of India may proceed against the defaulting bank under section 11(3) of FEMA, 1999 and take any action as may be deemed necessary.’
The platform that companies like IX Global use for trading (according to this video) is called MT4. It is an overseas based platform outside the legal jurisdiction of the Government of India, and alarmingly there have been numerous claims of data manipulation against this particular platform. This platform also allows trade of currency pairs except EUR-INR, GBP-INR, JPY-INR, USD-INR, EUR-USD, GBP-USD, and USD-JPY. Trading in currency pairs except these is Illegal. See the RBI notification here.
“When such trades are taking place without the notice of the authorities, money flows though the systems by illegitimate means. Mostly by hawala.” said Gopika Baghel, a Cyber Crime Consultant with the Chhattisgarh Police.
Another company which operated using similar underhanded tactics, XDirect, was busted earlier. Analysts find the detection of patterns critical to drawing intelligent inferences. And with even XDirect, one may note with some interest, the same template was followed. Exaggerated claims of wealth and influence to its customers; promising quick earnings in a short time through trading, misleading the clients, depositing a minimum amount ($515) in their account over the registration fees, and, most tellingly, no proper legal registration for the process. Just as in the case of IX Global, the broker failed to register with the Reserve Bank of India, and the Securities and Exchange Board of India. Meanwhile the broker actively sought clients to trade in the Forex markets via their platform, for a commission on each client’s transaction. Yet another company by the name of WealthGenics is also functioning on similar lines. Its founder, Vinod Shedge, by now definitely not surprisingly, was working with Viraj Patil at IX Global back in January 2020, and at Kuvera Global before that.
Amit Dubey, a cybersecurity expert and a crime investigator on cyber forensics said, “MLM companies, conventionally used to sell physical products like beauty products, wellness products, etc. but with these online educational schemes, we can see that they have an unlimited supply of the product. Their production cost is negligible, thus they have absolutely no logistical limitation to stop them from proliferating their business. When such digital products come into picture, IT Act 2000 should also do ,and, at the very least, these individuals should be held for digital fraud.”
Estimated Earnings of IX Global
According to the complainant, the internal systems show that there are more than 50,000 members in IX Global.
“If we assume that 40000 members are paying an average of $125, (note that there are packs of $145 and $180 as well) the monthly earnings of IX Global through Multi-Level Marketing come out to be $5,000,000 (5 million dollars) or around 36.5 Crore INR.”
Let us assume that the automated trading systems are generating $5 commission /day/user for the company, the commission for just 20,000 users’ trading accounts comes up to around 22 Crore INR (Note that all the users do not use the trading services).
This makes the monthly income of IX Global around Rs. 58.5 Crore which indicates that the company has generated over 500-700 Crore INR since its inception. Our source believes that this is a huge underestimation of their profits and the actual number is much bigger.
Since this money is going outside the country, it raises more and more questions. The better informed among our readers will be quick to note the similarity with another such MLM company, Q-Net, which the NIA was looking into, for the alleged transfer of funds to terror accused Zakir Naik.
Just like Kuvera Global, IX Global is expanding on a multinational level. Recently, Viraj Patil uploaded an instagram story in which, he showed his recently acquired residential visa in a middle eastern country.
Since a complaint has been filed with the Mumbai Police, this visa too raises some tough questions. In the middle of a raging pandemic, why did Viraj Patil’s feel compelled to visit the middle eastern country? Is he planning to run his operations from the middle eastern country from here on, or does he plan to return to India? Only time will tell.
Bleeding the nation dry
Nitin Pandey, Cyber Crime Consultant, Uttar Pradesh Cyber, Police Headquarters Lucknow says, “This is not just a financial, but also a National Security issue. The founder of the company, Joseph Martinez, worked for the US Army, the trading platforms are not functioning from India amongst other facts indicate that the money could be used in mischievous ways. Maharashtra police should aggressively act and bring clarity to this situation.”
Prof. Triveni Singh, Superintendent of Police, Cyber Crime, Uttar Pradesh adds “We have busted such rackets in the past and I urge the citizens from all over India to come forward and push for actions in a legal manner against such entities.”
Such grim observations by senior security experts raise even more questions –
1.Is IX global a shell company of the legally troubled Kuvera Global?
2. Why were Kuvera Global members using the word ‘#IXMOVEMENT’ in their Facebook posts just before IX global came into public light?
3. If the investment profits are rarely deemed to be encashed, could this be another fraud pyramid scheme?
4. Is the stagnant money, which is collected by new users, being circulated in the potentially rigged trading system which could make it another dabba trading system?
5. If the top hierarchy direct sellers are taking digital payments (even cash in some cases) from new members, how is the money being accounted into GST?
6. Do the members whose details are not registered in the Direct Seller’s Register have their money being circulated by illegal means (Money laundering, Hawala, etc.)?
7. Why is there little to no social media recognition of the company’s operations in Utah.
7. Moreover, why not in the other countries where this company claims to function?
8.Does the company take responsibility of the political threat which one of the members gave to the complainant?
It’s high time that the government comes up with stricter regulatory measures for Multi-Level Marketing Industry and put an end to all the grey area loopholes.
If you are a concerned citizen a member, or an investor suspicious of IX Global’s actions and wish to contact us and share your story, then kindly write to us at firstname.lastname@example.org . Can also be contacted on twitter , LinkedIn and instagram. Your identity will be kept strictly confidential.
You can lodge complaints at — cybercrime.gov.in
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