BULLETIN: Corrupt MLMers Found Guilty Of Operating Pyramid Scheme And Stock Swindle; James A. Sweeney And Patrick M. Ryan Face Decades In Prison

BULLETIN: In a case that could have been taken from the MLM and security swindler’s playbook, James A. Sweeney and Patrick M. Ryan have been found guilty by a state jury in California of operating a pyramid scheme and stock fraud and stealing $8.2 million after soliciting business at “seminars.”

The men face more than 20 years each in prison. Prosecutors said they told members that their “opportunities,” known as Big Co-op Inc. and Ez2Win.biz, represented the “future of online commerce.”

The firms were compared in promos to Google and eBay, and members were told an IPO was “imminent” and that “when the company went public, the stock would double or triple and [stockholders’] investment[s] could climb to well over $100 per share,” prosecutors said.

At an October 2006 pitchfest attended by a state undercover agent, prospects were falsely told that the company that had taken Google public had been hired to manage Big Co-op’s purported IPO and that the company would go public in December 2006, according to the state.

But no arrangements with Google’s IPO manager to take the firm public had been made and no “application to any governmental or regulatory agency to allow Big Co-op to make an initial public offering of stock in 2006, or at any other time thereafter” had been filed, the state charged.

Filings by the California Department of Corporations paint a picture of affiliates making wild claims to drive business to the company. The company itself lured prospects by planting the seed they’d be driving a Mercedes Benz and wearing a Rolex wristwatch, according to state filings.

Vague — and even wild claims of future success — often are part of MLM scams. It also is common for hucksters to plant the seed that a company “soon” will go “public” and become the “next” Google, Microsoft or eBay. At least one Big Co-op promoter declared the firm the next Walmart, according to records.

Even if no claims that a firm will go “public” are made, it is common for MLM hucksters to leech off the brands of famous companies to create a sort of legitimacy by osmosis. In the universe of MLM fraudsters, it is common for hucksters to plant the seed that figures such as Donald Trump, Warren Buffett and Oprah Winfrey have endorsed the “opportunities,” when no such endorsement had occurred.

Some MLM hucksters even have traded on the names of various presidents of the United States and other world figures.

Sweeney, 64, of Afton, Tenn., and Ryan, 35, of Canyon Lake, Calif., were arrested in June 2009.

By the time it was all over, more than 1,000 California residents had been lured into the scheme, prosecutors said.

The scam “purported to be an online shopping hub where consumers could go to purchase thousands of goods and services at discounted prices from big-name retailers including, Sears, Target and Macy’s,” prosecutors said.

Members were told they’d earn “rebates” and “rewards,” which never came. In reality, the state said, any “monetary gains” were based on a member’s ability to recruit people into a pyramid, have those people recruit others “and so on.”

Taking another page out of the scammer’s playbook, the “opportunity” sold stock ranging in price from 50 cents a share to $5, “with two-for-one deals offered to investors willing to pay cash,” the state charged.

“Sweeney and Ryan bought luxury homes, country club memberships, five Mercedes, and ran up $30,000 to $50,000 in monthly credit card bills,” prosecutors said. “Investor funds were also used to pay for an elaborate bachelor party in Las Vegas, a $23,000 wedding ring and a $100,000 wedding.”

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10 Responses to “BULLETIN: Corrupt MLMers Found Guilty Of Operating Pyramid Scheme And Stock Swindle; James A. Sweeney And Patrick M. Ryan Face Decades In Prison”

  1. Is there an echo in here, Patrick…? LOL
    Sounds like the same pyramid business model for Club Asteria, MPB Today, That Free Thing, and countless other scams that have failed or will fail.

    The funniest thing is a member at TalkGold was permanently banned for putting an unreal “opportunity” into the HYIP folder, where even the forum mods and admins admit that there are no real programs…!

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  2. California Department of Corporations-Desist and Refrain Order
    http://www.corp.ca.gov/ENF/pdf/2007/bigcoop.pdf

    Also, it may have started before 2004, not 2005 as reported
    http://www.mlm.com/forum/viewtopic.php?f=5&t=2906

    To Anybody: Need Info On This Company – EZ2Win.biz

    Postby Granny_Bell » Wed Dec 29, 2004 10:50 pm
    [snip]
    He also operates something called Big Co-Op, which apparently has been around for a few years.
    [snip]

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  3. All I will say is that this was not a fair trial. Don’t believe everything you read!

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  4. This was not a fair trial. Don’t believe everything that you read!

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  5. Mrs S:

    I guess this means you enjoyed your $100,000 wedding and $23,000 ring bought and paid for by the investors. You might want to ask them if they “enjoyed paying” for them both. Somehow I don’t think the word “fair” will be in their replies.

    Of course your hubby can always appeal claiming his attorney(s) were incompetent. Not a fair trial? Rule #24 in the scammers playbook…when found guilty claim the trial was not fair and the real truth was not allowed to be presented. May I suggest the theme song for your whining: “I fought the law and the law won.”

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  6. Maybe Mrs. S. can give us details as why this trial was unfair. What errors of law did the judge make? Are these guys “sovereign citizens” that don’t recognize the authority of the court? Why is the judgment of the ordinary citizens that made up the jury to be disregarded?

    I haven’t met very many criminals in my life that had “fair” trials. These guys can tell their buddies in the big house how the government did them in.

    I say good job to the Department of Justice.

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  7. People are usually upset when they get convicted.Prisons are populated by many “innocent” people!!

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  8. Well, we have another mystery: “Mrs.S” appears to have the ability to swoop into the PP Blog using multiple IPs within the same range virtually simultaneously — and post two different comments in the same thread from two different IPs within two minutes.

    Patrick

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  9. Holy crap! I used to work for BigCo-op/Ez2Win! The Big Co-op piece could have been legit if only they put more effort into sending out the rebate checks. Ez2Win was always a joke though. I was fired in late 2005 for raising my voice on the phone with a big time recruiter. I’m so glad I got out when I did, cuz I would hate to be associated with all this when it went down.

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  10. I worked for Sweeney when he was selling “diet” candy – pyramid style – in 1993 when he met Patrick Ryan. Patrick was about 16 at the time and working at a gas station. Patrick was a nice kid then. What a shame and a waste of a young life.

    Do you know if these two are still in jail?

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