KATHMANDU, Jan 6: Nepal Police arrested 11 individuals for their alleged involvement in an online pyramid scheme that cheated the public of more than Rs 120.81 million.
According to the Cyber Bureau of Nepal Police, the arrested include a Chinese national, HE JiangJiang, and 10 Nepali citizens. Police have filed cases against the accused at the Kathmandu District Court.
Investigators said the group used online applications to lure people with promises of lucrative returns by encouraging them to invest money and recruit new members into an expanding network.
Those arrested are Milan Shrestha of Ramechhap-7; Saugat Thapa of Bandipur Rural Municipality-7, Tanahun; Bir Bahadur Tamang of Kispang Rural Municipality-4, Nuwakot; Sonam Khatun of Khairahani-7, Chitwan; Priya KC of Tokha-8, Kathmandu; Monika Gurung of Kaligandaki Rural Municipality-7, Gulmi; Gita Gurung of Ganga Jamuna Rural Municipality-3, Dhading; Nasir Miya Ansari of Birgunj-1, Sayara Khatun of Birgunj-4, Parsa; and Ram Niwas Prasad Kalwar of Kalaiya Municipality-1, Bara.
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Superintendent of Police Deepak Raj Awasti, spokesperson for the Cyber Bureau, said the group used an application called SMC to enrol individuals into the scheme.
“Based on 255 complaints registered at the Cyber Bureau, we initiated the investigation. We had already placed the suspects under surveillance based on information from the Ministry of Home Affairs and our intelligence unit,” Awasti told Republica.
Police said the group registered a company, SMCN Advertising Service Center Pvt Ltd, in Khairahani Municipality-6, Chitwan, under the name of Sonam Khatun to project legitimacy. They used the bank accounts of Sayara Khatun and Ram Niwas Prasad Kalwar to transfer money collected from victims through online platforms.
According to investigators, the accused claimed that the SMC mobile application was linked to international movie platforms such as Universal, Warner Bros and Disney. They convinced victims that they would earn money by watching advertisements related to films on streaming services. The scheme also encouraged participants to recruit new members by offering attractive commissions.
A press statement issued by the Nepal Police Cyber Bureau said the scheme operated through multiple levels. At top level (Level A), existing members received a 12 percent commission from the total amount deposited by newly recruited members, along with a daily return of five percent on each new deposit. At the second level (Level B), members received a four percent commission and a daily return of two percent, while third-tier members (Level C) earned a one percent commission and a daily return of one percent.
Police said the scammers followed a classic pyramid model, paying commissions primarily based on recruiting new members rather than any legitimate business activity. The group also promised a return of 1.2 percent on investments allegedly deposited in BlackRock, which police said was an imaginary fund.
Awasti said the group targeted vulnerable communities, including people affected by landslides and floods triggered by continuous rainfall on October 4 and 5 in Ilam district.
“They exploited people’s emotions by distributing relief materials to flood victims and gradually expanded their network in the area,” he said.
Illegal pyramid schemes have repeatedly surfaced in Nepal over the past two decades, with operations such as Unity, Amway and Gold Quest previously defrauding the public by offering income based on recruitment rather than the sale of genuine products.
