Frogress Autosurf Apparently DOA

doaartAn autosurf known as Frogress apparently has gone the way of MegaLido, leaving members in the lurch.

Frogress seems to have started in October — about the same time as MegaLido. It advertised 12 percent a day for 12 days, and forum posts raved about the communications skills of the Frogress operator.

MegaLido employed a similar model before going belly-up in a matter of weeks. People also raved about the communications skills of the MegaLido operator — until he stopped communicating, that is.

In any event, the Frogress server is throwing an error message, and people in forums said the program has tanked. Some people, however, added that they’d join the next autosurf opened by the Frogress operator. After all, he had good communications skills — and 12 percent a day is nothing to sneeze at.

Frogress and MegaLido both used the flameout model — high rebate percentages purportedly paid quickly.

This is distinguished from the slow-motion model — low rebate percentages paid over considerably more time.

Regardless, Ponzi math applies to both approaches, and a rational argument can be made that slow-motion Ponzis actually are more dangerous than flameout Ponzis because more people have more time to join and more money can enter the system before collapse.

Bernard Madoff’s alleged $50 billion scheme was a slow-motion Ponzi, as was the alleged AdSurfDaily Ponzi.

That a slow-motion Ponzi could be construed as more dangerous than a flameout Ponzi does not inply that there is any virtue in using the flameout model; it simply means the individual autosurf’s pot may not grow as large in the flameout model.

No matter. A fameout Ponzi operator still can collect big sums quickly, shut down the autosurf, and start another flameout Ponzi, hopscotching across the Ponzi universe fueled by promoters who can’t say no to the sign-up commissions and the chance to make a quick kill.

It’s worth pointing out that Ponzi collapses can be voluntary or involuntary. It’s common for autosurf Ponzi operators to take the money and run, invoking disclaimers and contract language members agreed to at sign-up:

Advertising fees are “nonrefundable,” for instance. And “rebates aren’t guaranteed.”

If the cessation of operations is involuntary, it could be because the government has stepped in to stop an alleged scam from mushrooming and sucking away even more money. That’s the ASD experience.

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5 Responses to “Frogress Autosurf Apparently DOA”

  1. Patrick,

    I would agree that the slow Ponzi’s are more dangerous. No one really believes in 12 percent per day returns. ASD was a moderately fast Ponzi, offering returns that at least a few believed were sustainable/reasonable (Ty, for example). Madoff offered returns that did not strain credibility for everyone, and so was able to draw in more serious investors with significant money. No one would ever put a million dollars into ASD. Their due diligence would sniff out the Ponzi (people who put $100 into ASD would be FAR less likely to do due diligence, or at least detailed DD, that someone who invests $1,000,000). The available due diligence on Madoff would not have uncovered the Ponzi, although I would suggest that the “secret investment strategy” should have been a red flag. Ultimately, there is likely a strong inverse correlation between size and Ponzi speed. Slow Ponzi’s can do more damage, and people feel as if the Ponzi leader has been very dishonest, hiding the truth, such as by falsifying records. Fast Ponzi’s like ASD, CEP, Megalido, and now Frogress didn’t rely on record falsification. Say what we want, Bowdoin with ASD did not hide the truth — the Ponzi nature was in plain view for those who wanted to look at the math.

  2. ASD was a moderately fast Ponzi, offering returns that at least a few believed were sustainable/reasonable

    Hi Entertained,

    Lots of folks defended ASD on the grounds it wasn’t 12DailyPro — meaning it promised a lower rebate paid over a longer time frame. The prosecutors anticipated this argument, refuting it in the ASD forfeiture complaint.

    From Page 19 of the complaint (emphasis added):

    “ASD’s News webpage lists daily rebates to investors for the time period for March 2008 to June 2008 as averaging roughly 1% each weekday, and at least .5% for each weekend day. Under that rebate scenario, it would take a
    participant who paid $100 to purchase “ads” at least 125 days to get his or her $125.OO (125%) ad-surf payout.


    And, yes, as you point out, ASD did tell folks what was in store for them and the alleged Ponzi was in plain view.

    Also from Page 19 of the complaint(emphasis added):

    “ASD’s webpage also stated that: ‘All payments made to ASD are considered advertising purchases,not investments or deposits of any kind. All sales are final. ASD does not guarantee any earnings or profits. Any commissions paid to Members are for the service of viewing other Member web sites
    and for referring Members to AdSurfDaily. All advertising purchases are non-refundable.’


    One of the first pro-ASD arguments I read — a few weeks before the seizure — was that ASD had paid attention to the fate of 12DailyPro and built its system to avoid that fate.

    ASD promoters used the relatively slow payout as a smooth-sounding talking point, one that supposedly revolutionized the autosurf trade and destroyed all notions of a Ponzi. But it was just wordplay, as the prosecutors pointed out.

    The available due diligence on Madoff would not have uncovered the Ponzi, although I would suggest that the “secret investment strategy” should have been a red flag.

    I, too, was struck by the “secret investment strategy” that people were willing to overlook as Madoff was growing his alleged scheme. Lots of folks are kicking themselves in hindsight. It looks like a giant red flag now, but one people either overlooked or weren’t willing to see when they were sending millions of dollars to Madoff.

    No one really believes in 12 percent per day returns.

    I’d love to agree with you on this, but 27,000 people reportedly signed up for MegaLido, which promoted 12 percent a day. So did Frogress — and this AFTER the very public legal proceedings against ASD, which used 1 percent a day and still caught the attention of the government.



  3. Frogress was promoted by well known ponzi-pimps who also promoted ASD, and just about every big scam in the last 3 or 4 years. Because of the number of scams they have promoted over the years they know (or should have known) that this was a ponzi scheme. And yet they were more than willing to profit from it. I think there were very few people who really believed in the 12% per day return. Most of them knew what they were doing, playing the ponzi.

    Patrick, you may be interested in this:

    The Commission’s complaint alleged that McMillin and Young were part of a Ponzi scheme known as American Investors Network or AIN. AIN solicited funds to finance an advertising program and promised to return monthly profits of $10,000 to $20,000 on each $2,000 investment. The advertising interests were investment contracts which are securities under federal law. Among other claims, the complaint alleged there was no advertising program and that investors who received “profit” distributions were paid with funds solicited from other investors. The complaint also alleged that McMillin and Young acted as unregistered broker-dealers in connection with the offer and sale of securities.

    Advertising as an investment.

  4. Hi Tony,

    Thanks for the link; I turned it into a news item.



  5. […] Frogress: Pitched by ASD members in aftermath of seizure. Frogress tanked in January 2009, just after the Christmas holiday in 2008. […]