PatrickPretty.com

Category: Writing And Branding

The Cannons Pointed At The PP Blog

EDITOR’S NOTE: The screen shot above is from the PP Blog during a spam wave. It was taken yesterday and shows that 13 of 18 “readers” at the Blog between 10:11 a.m. and 10:18 a.m. were using IPs that resolve to China.

Many of you have heard the website of the New York Times was brought down two days ago. The Times still was having trouble yesterday, according to USA Today.

From USA Today (italics added):

The SEA, a group of hackers who support Syrian President Bashar Assad, claimed responsibility online and said it also hacked Twitter’s sites.

Although the mechanics (reported by Fox News to be a “spear phishing attack,” the subsequent theft of log-in details and DNS hijacking at the registrar level) of this week’s attack on the Times were different than the mechanics of various attacks directed at the PP Blog over the years, the result was the same: The loss (or the limiting of) the ability to report, educate, opine and, yes, generate the revenue needed to report, educate and opine in the coming hours, days, months and years.

Destroying or altering the functionality of websites that are the very embodiment of the free press is incompatible with Democracy, making the attack on the Times an attack on freedom itself.

The PP Blog encountered DDoS attacks (in 2010) that knocked the site offline for days. There have been follow-up traffic floods, including one in 2011 in which the Blog received a claim of responsibility from a “master of execution” purportedly from the HYIP sphere. The PP Blog went down twice over the past weekend. Both today and yesterday the Blog has been relentlessly targeted by what appears to bots whose IPs appear to originate in China.

Beyond the commonality of the IPs, the masters appear to be quite interested in scraping content snippets from other websites and repackaging it in bizarre fashion in apparent bids to sell designer goods that may not be the real thing. Put another way, apparent would-be capitalists who apparently have control of a wide range of Chinese IPs are entitling themselves to a free ride on the the bandwidth of the PP Blog in the United States and are trying to attract “customers” for goods that may or may not be original — while perhaps also setting the stage for “customers’” identities to be stolen or otherwise misused.

A spam the PP Blog received last night included a dateline that purported to be from the AP. Earlier in the day, the Blog received a spam that appeared to have been lifted from a 2011 AP report on the departure of Sheila Bair from the FDIC. Like most of the recent spam received by the Blog, these two appeared to be hawking designer goods — or maybe, just maybe, trying to dupe people into visiting websites designed to pick pockets in more clever ways.

The screen shot above reflects only a small sampling of the resources-draining spam received yesterday morning by the PP Blog. Each spam appears to have been assigned its own bogus individual Gmail address. The red rectangles on the right highlight the PP Blog stories (or links) targeted by the spammers/bot masters. Had the wave been strong enough to cripple the Blog, readers interested in accessing the stories/links would not have been able to do so. In fact, nothing on the Blog would have been accessible — as was the case for at least four hours this past weekend.

Aug 29, 2013
REPORTS: Ice Cream Flavor Named After TelexFree, An Alleged Pyramid Scheme; Separately, TelexFree Affiliates May Be Crossing National Borders To Keep The Money Flowing — Even As Purported Opportunity Turns To New Payment Method

The HYIP world is known for promoters’ bids to change the storyline, but this one may take the cake — or at least be a sweet complement.

There are reports in Brazilian media that a promoter of the TelexFree MLM scheme — alleged to be a massive pyramid — has named an ice cream after TelexFree to show support for the embattled firm.

“The ice cream is not a pyramid,” a person was quoted as saying in DiarioDigital, according to a translation — and neither is its namesake.

Here is a link to the story in Portuguese; here is a link to the English translation by Google Translate.

Recruitment by TelexFree is banned in Brazil while investigations by at least seven Brazilian states proceed. Payments to Brazilian participants by TelexFree likewise are blocked. The purported “opportunity,” however, still is operating in other countries and apparently gathering money and issuing payments.

Separately, Veja.com is reporting that undercover investigators in Brazil have noticed that some Brazilian promoters of TelexFree have crossed national borders into Bolivia and Paraguay to keep TelexFree investment money flowing. Here is a link to the story in Portuguese; here is the link to the English translation by Google Translate.

The United States long has warned about cross-border fraud such as was present in PathwayToProsperity, an alleged $70 million Ponzi scheme whose operator is listed by INTERPOL as an international fugitive. P2P, as the “program” was known, made its way across multiple continents and 120 countries, according to court filings.

Meanwhile, U.S. promoters of TelexFree have been busy watching a promoter’s Aug. 16 YouTube video titled, “How to register your GPG account with TelexFree.”

GPG, according to the video, stands for Global Payroll Gateway.

The company, according to its website, provides services such as loading payrolls onto debit cards. TelexFree, according to the affiliate’s video, is now a GPG client and TelexFree affiliates must “connect” their account to GPG to get paid.

A screen shown in the TelexFree affiliate’s video shows an apparent executive of TelexFree announcing that the changeover to GPG’s services “is causing a delay in our payment process for the first run.”

The FBI long has warned that certain types of debit cards can be abused and that a “shadow banking system” is playing a role in fraud schemes that affect national security.

If TelexFree is adjudicated a scam, it may be difficult for the governments of the world or the receivers/trustees they may appoint to gather proceeds for victims. HYIP money may dissipate quickly, perhaps particularly quickly if it is offloaded with debit cards. In a money-laundering case brought in 2008, federal prosecutors in Connecticut said that millions of dollars in narcotics proceeds were offloaded at ATMs in Colombia.

Robert Hodgins, a Canadian currently listed by INTERPOL as an international fugitive in the Connecticut money-laundering case, reportedly supplied the debit cards through a firm known as Virtual Money Inc. and had ties to the HYIP world and schemes such as PhoenixSurf and AdSurfDaily.

Another screen in the TelexFree affiliate’s video shows folders with titles such as “telexfree,” “Banner[s] Broker, “hyip monitors,” “forex”and “Passive peeps.”

The context of the folders shown in the video is unclear. Banners Broker, however, is a bizarre HYIP scheme. HYIP monitors are websites that monitor whether a particular HYIP site is “paying.” Meanwhile, the word “passive” often is used in HYIP scams that promote tremendous returns for investors inclined to sit back and wait for the payments to flow in, instead of recruiting other investors to earn downline commissions from a “program.”

TelexFree has been promoted on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. The names of both forums appear in U.S. court filings as places from which fraud schemes are advanced.

From a promo for the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme.

Zeek Rewards, an alleged $600 million Ponzi- and pyramid scheme that had a Ponzi-forum presence and became the target of an SEC action last year, was promoted as a “passive” program. Like Zeek, TelexFree purportedly has a requirement that participants post ads for the “program” online.

There have been reports in Brazil that a judge and prosecutor involved in the TelexFree case have been threatened with death.

But not even those disturbing reports were enough to cause TelexFree to cancel a rah-rah event in California last month. The company says it also plans an “at sea” event in December. Earlier, some TelexFree pitchmen provided AdSurfDaily-like coaching tips to enrollees, especially on matters of how to speed the flow of money to the company.

ASD was a $119 million MLM Ponzi scheme broken up by the U.S. Secret Service in 2008. Like Zeek and TelexFree, the ASD “program” also had a Ponzi-forum presence and was promoted as an opportunity for “passive” participants.

Some TelexFree promoters in Brazil appear to believe that TelexFree has been deemed legal in the United States by the U.S. government. This errant belief may in part have been instilled by promoters of TelexFree who worded MLM HYIP pitches to suggest that the U.S. government had authorized the “program.”

Some TelexFree promoters have claimed a payment of $15,125 to the firm will fetch a return of more than $42,000 in a year. Even the cautious “Aunt Ethels” of the world will grow to become keen on TelexFree, according to a promo.

Aug 21, 2013
EDITORIAL: Death Of An MLM Salesman — Brought To You Via Empower Network’s ‘Badass’ Button

This “Badass Content” on Empower Network was about the tragic death of a key Herbalife salesman.

If you’re an MLM company facing a PR problem or a crisis involving the firm and its distributors, don’t expect fellow MLM firm Empower Network to solve it for you. In fact, it’s probably prudent to expect that Empower Network will only magnify your bad press or virally blab the things you’re trying to keep in-house.

To the uber-bizarre Empower Network, the sudden death of a top Herbalife distributor is “badass content” that plays well alongside other Empower Network “badass content” such as a story posted by “Team America” and titled, “Ingredients for Success: An Interview with Nu Skin President and CEO Truman Hunt.”

Background

Herbalife, according to BehindMLM.com, notified distributors last week about the death of John Peterson, saying in an email that Peterson had died as a result of “a tragic accident at his home in Steamboat Springs, Colorado.”

“Tragic” was an apt descriptor, to be sure, especially since the New York Post reported that authorities were looking at the death as a suicide carried out with a gun while the MLM trade tries to come to grips with assertions by Bill Ackman that Herbalife is a pyramid scheme. Peterson was 58, married and the father of three children. He reportedly had earned millions of dollars through Herbalife, in part by driving business to the firm through a purported “leads” program.

Herbalife denies it is a pyramid scheme and has sought to distance itself from such “leads” programs.

But returning to the subject of all this purported “Badass Content”: The “Team America” post about Nu Skin on Empower Network appears to have been lifted in its entirety from the trade publication Direct Selling News by an Empower Network affiliate interested in getting more sign-ups for Empower Network by using DSN’s Nu Skin story as a lure.

Meanwhile, Herbalife’s in-house announcement about the death of Peterson appears also to have been cherry-picked by Empower Network affiliates, reposted on Empower Network’s Blogging platform, repurposed as “Badass Content” and used to lure sign-ups for Empower Network.

When one clicks the incongruous “Badass” button above the Empower Network postings about Peterson’s death, one is taken to a page that in part reads, “Share this Badass Content Now! Click the social network buttons above so all your friends can see this badass content.”

Yes, really. The death of an Herbalife pitchman in the prime of his life while his family grieves qualifies as “Badass Content” on Empower Network.

Another part of the message points visitors to a domain styled “BadassContent.com,” which is registered in the name of David Sharpe of Empower Network LLC. Sharpe is one of EmpowerNetwork’s purported founders, and the LLC is listed as a Florida company with Sharpe as one of its two managers. When the PP Blog tried to visit the “badass” URL about Peterson’s death, the McAfee SiteAdvisor security software used by the Blog issued a “Suspicious Site” warning and a message that in part read, “When we visited this site, we found it exhibited one or more risky behaviors.”

McAfee SiteAdvisor warning about “badasscontent” domain. Red highlights by PP Blog.

Empower Network also appears to control a domain styled BadassButton.com.

On Aug. 12, the PP Blog reported that a video playing on YouTube sought to drive traffic to Empower Network by depicting U.S. Vice President Joe Biden as a recent enrollee in the bizarrely named CashCropCycler HYIP “program” who confesses to President Obama that he’s “[j]ust out bumbling around and sticking my foot in my mouth.”

But if you complain to YouTube about Empower Network, according to David Wood, another of the purported founders, there may be hell to pay, so you should “Back the fuck down.”

“Be warned: BIG, SCARY WARNING,” Wood wrote. “I’m in the process of having lawyers research into whether or not we can sue the shit out of you.”

Yes, really. Welcome to the MLM La-La Land of Empower Network. It’s like the La-La Lands of Zeek Rewards and AdSurfDaily and MPB Today needed a replacement and that some of MLM’s purported greatest thinkers have decided that what the MLM world really needs is even more madness.

Read the Salty Droid swearing back at the purported Empower Network “badasses.” (Salty can curse with the best of them, even when they’re planting the seed he should be executed with a shotgun.)

Can there be any doubt that MLM is just asking for it?

One self-described Christian pastor and Empower Network promoter on YouTube tells his audience that there’s money to be made in Empower Network, despite all the swearing. Just tune it out and recognize that swearing is a personal choice and hardly is limited to the MLM sphere, he instructs.

“This is just an open environment where we accept everybody of all types of beliefs, whether you’re a Christian or an Atheist or a Jew or a Muslim — or, you know, you . . . believe in Scientology and all that good stuff,” the pastor explains.

He added that he looked at network marketing in general as an “opportunity to be able to advance the kingdom of God” and at Empower Network in specific as a “vehicle to help you to get the money that God wants you to have so that you can advance the kingdom of God.”

Had the pitch for Empower Network appeared on Empower Network instead of YouTube, the pastor could have given his God talk its very own “Badass” button (with a representation of a human skull included) to drive traffic.

The only remaining mysteries, we suppose, is whether God, being God, would have cared enough to solve the little problem McAfee has with the “badass” domain — and whether He’d be offended that His name, once again, was being used to promote an MLM “program.”

Did we tell you that the PP Blog received information today that strongly suggested that some “sovereign citizens” were pitching a scheme by which winners in the Zeek Rewards MLM scheme, which the SEC has described a year ago as a $600 million fraud, could short-circuit “clawback” litigation from the court-appointed receiver?

We’ll keep you up to date as that MLM La-La Land story develops.

Aug 19, 2013
TelexFree, MLM Firm That Is Subject Of Pyramid Probe, Says It Will Offer ‘At Sea’ Event

Source: TelexFree website, Aug. 16, 2013.

TelexFree, an MLM “opportunity” under investigation in Brazil amid allegations it is orchestrating a massive pyramid scheme, says on its website that it is conducting an “at sea” event Dec. 15-18.

Perhaps accidentally providing an awkward hint of dire portent, the promo shows the TelexFree logo superimposed on the side of a luxury ocean liner that is nearly beached in the tropics. Even more incongruously, it is being published not only against the backdrop of the pyramid probe, but also against reports that a judge and prosecutor in Brazil have received death threats related to the investigation.

Promoters of MLM HYIP scams such as JSSTripler/JustBeenPaid (2 percent a day) and AdViewGlobal (1 percent a day) previously have advertised sea cruises. It is unclear if the JSS/JBP cruise ever came off.

AVG’s 2009 cruise coincided with a bid (apparently unsuccessful) by the “program” to line up another bank and wire facilitator to assist in the swindling of investors who’d previously been swindled in AdSurfDaily’s $119 million Ponzi scheme that advertised a 1-percent-a-day payout.

AdViewGlobal, which purported to operate from Uruguay, bizarrely announced its new scam on the same day the President of the United States announced a crackdown on offshore fraud. Federal prosecutors later said they’d tied AVG to ASD President Andy Bowdoin.

Some TelexFree promoters say a payment of $15,125 to the program results in a profit of at least $1,100 a week for a year. Other promoters claim they’re “100% telexfree,” which apparently means they’ll stand by their “program” no matter what.

Aug 16, 2013
How Bizarre Will MLM Get? YouTube Video That Drives Traffic To Empower Network Feeds On Name Of ‘CashCropCycler’ And Trades On Images Of White House, Obama And Biden

“President Obama” and “Vice President Biden” in a video that appears to be designed to drive sign-ups for Empower Network, an MLM “program.”

EDITOR’S NOTE: Our thanks to reader “Tony” for pointing out the video described below.

UPDATED 9:26 A.M. EDT (SEPT. 10, U.S.A.): How bizarre will MLM get? Well, there may be no ceiling: A 2:47 video animation playing on YouTube depicts U.S. Vice President Joe Biden as a recent enrollee in the CashCropCycler HYIP “program” who confesses to President Obama that he’s “[j]ust out bumbling around and sticking my foot in my mouth.”

The video has a publication date of July 17 and appears to be a bid by an affiliate of the Empower Network MLM “program” to target traffic meant for CashCropCycler and refocus it toward Empower Network. “President Obama” appears to speak with a British accent in the promo, which also features a jab against Ben Bernanke, the chairman of the Federal Reserve.

At approximately the 0:48 mark, after “Biden” informs “Obama” that he’s just joined CashCropCycler, “Obama” seems to say this: “Bernanke started that one, didn’t he?”

Some MLMers appear to believe that raising conspiracy theories about the Federal Reserve is helpful to MLM HYIP “programs.”

A URL below the video at the YouTube site goes to a page at JoinVicNow.com that displays a photo of an oversized “Commissions Earned” check from Empower Network for $464,913. The check appears to be dated September 2012. It is made out in the names of “David Wood & David Sharpe” and is presented by an individual wearing a Guy Fawkes mask.

Source: Sceen shot at JoinVicNow.com

CashCropCycler, a “program” promoted on the Ponzi boards, appears to have gone missing in recent days. NEOMutual, a purported “crowdfunding” company promoted alongside CashCropCycler on the Ponzi boards, also appears to have gone missing. Both “programs” planted the seed that extraordinary profits would come to enrollees.

The Guy Fawkes mask sometimes is known as the “V for Vendetta” mask, which sometimes is used by members of “Anonymous,” the so-called hacktivist group associated with DDoS attacks on government and commercial sites.

Here, in part, is how WikiPedia describes the mask and Guy Fawkes (italics added):

The Guy Fawkes mask is a stylised depiction of Guy Fawkes, the best-known member of the Gunpowder Plot, an attempt to blow up the House of Lords in London in 1605. The use of a mask on an effigy has long roots as part of Guy Fawkes Night celebrations.

Why an individual is wearing a Guy Fawkes mask in the photo depicting the Empower Network check is unclear. The company, however, has described itself as “bad ass.” (Also see July 19 report on BehindMLM.com.)

Trading on the name of the President and Vice President of the United States was one of the things that led to the downfall of the AdSurfDaily MLM “program” in 2008. (The President at the time was George W. Bush; Dick Cheney was the Vice President.)

After Obama replaced Bush in the White House, an affiliate of an MLM “program” known as MPB Today depicted Obama in a 2010 promo as a left-handed saluting Nazi subordinate to then U.S. Secretary of State Hillary Rodham Clinton, who was depicted as a whining drunk who’d knocked out First Lady Michelle Obama in the Oval Office. In 2012, MPB Today operator Gary Calhoun was charged in Florida with racketeering. A federal forfeiture complaint that targeted the headquarters building used by MPB Today specified the crimes of access-device fraud and fraud in connection with identification documents.

Calhoun was sentenced to a three-year prison term last month. MPB Today MLM affiliates claimed a one-time purchase of $200 from the firm could result in free groceries and gasoline for life. Claims were made by affiliates that the U.S. government or Walmart or both had backed the MLM “program.”

In January 2013, an online promotion turned Obama into a pitchman for a Ponzi-board “program” known as UltimatePowerProfits.

Some members of the TelexFree “program” now appear to believe there is MLM hay to be made while trading on the name of Democratic politician Anthony Weiner. TelexFree is under investigation in multiple states in Brazil, amid allegations its is conducting a massive pyramid scheme. Even though there have been reports in Brazil about death threats against a judge and a prosecutor, some U.S. affiliates continue to promote the purported “opportunity.”

One promo for TelexFree claims a payment of $15,125 to the MLM firm will produce a profit of more than $42,000 in a year. The “Aunt Ethels” of the world — older people with money — will become keen on TelexFree, according to the promo.

Aug 12, 2013
UPDATE: After Claiming It Was Interested In ‘Building A Network That Ticks,’ ‘CashCropCycler’ Appears to Be DOA; ‘NEOMutual’ Also Appears To Have Gone Missing After ‘Crowdfunding’ Claims

Touted on the MoneyMakerGroup Ponzi forum by former Zeek Rewards pitchman “mmgcjm,” a bizarre “program” known as CashCropCycler appears to have tanked. Joining CashCropCycler in the recent HYIP DOA lineup was NEOMutual, a purported “crowdfunding” opportunity that claimed it used bitcoin and a series of offshore payment processors to provide daily interest rates of 1.4 percent, 1.6 percent and 1.9 on sums between $20 and $250,000.

The websites of both NEOMutual and CashCropCycler are throwing error messages. Precisely when the sites went offline is unclear. In August 2012, the SEC described Zeek as a $600 million Ponzi and pyramid scheme.

Among other things, CashCropCycler was notable for its provocative name, which led to questions about whether the “program” was designed as a taunt and perhaps was using the HYIP world to crowd-source the cultivation of marijuana. The “program” also claimed enrollees received $10 just for signing up, a practice once used by the JSSTripler/JustBeenPaid scam.

An ad for NEOMutual once appeared on the landing page of the CashCropCycler website. NEO Mutual said it was located at Revolution Tower in Panama City, Panama. Like the “Profitable Sunrise” HYIP scheme, NEO Mutual purported to be in the bridge-loan business. In April 2013, the SEC called Profitable Sunrise a scam that may have gathered millions of dollars while using a “mail drop” in England and offshore bank accounts.

In July, the SEC issued an investor alert that warned about the dangers of potential investment scams involving virtual currencies promoted through the Internet.

“We are concerned that the rising use of virtual currencies in the global marketplace may entice fraudsters to lure investors into Ponzi and other schemes in which these currencies are used to facilitate fraudulent, or simply fabricated, investments or transactions. The fraud may also involve an unregistered offering or trading platform. These schemes often promise high returns for getting in on the ground floor of a growing Internet phenomenon,” the SEC said in the warning.

Among the strange claims on the CashCropCycler website was that the “program” was interested in building “a network that ticks.”

A February 2013 ad for Profitable Sunrise that appeared on a classified-ads site in ~~Montana~~ South Dakota (Sept. 5, 2013 edit) claimed that “Finally we have the bomb.” In an April 2013 Investor Alert on Profitable Sunrise, the state of Idaho warned that “Those investors who receive compensation for soliciting other investors may themselves be subject to the licensing and anti-fraud provisions of state and federal securities laws.”

In court filings on April 4, the SEC said Profitable Sunrise pitchmen may have pushed the “program” without even knowing for whom they were working.

Aug 11, 2013
Series Of News Releases From Purported MLM Trainer Plants Seed That Federal Trade Commission Has Given Green Light To Several Opportunities, Including Herbalife

EDITOR’S NOTE: The PP Blog called the Federal Trade Commission to get its take on these news releases, which use the agency’s name and imply that the FTC recently has given several MLM “opportunities” a clean bill of health. The agency did not immediately respond.

What would you think if you read a headline on Google News yesterday such as this: “Herbalife Pyramid Scheme Rumors Untrue: FTC Speaks out on Pyramid Definition.”

Would you think, perhaps, that the FTC recently had conducted an investigation into Herbalife’s business practices and “spoke out” yesterday in defense of the firm after determining that it had been subjected unfairly to “rumors” that it was orchestrating a pyramid scheme — and that any questions about the the legality of Herbalife had been laid to rest by the government?

And what would you think if you read headlines such as these:

“Adzzoo Pyramid Scheme Accusations False – FTC Explains Pyramid Scheme Definition”
“Javita Pyramid Scheme Accusations – FTC Settles Pyramid Definition”
“ARIIX Pyramid Scheme Evidence – FTC Settles Pyramid Scam Definition”
“Agel Pyramid Scheme Accusations False – FTC Explains Pyramid Scheme Definition”
“Ignite Electric Pyramid Scheme Rumors Not True – FTC Speaks on Pyramid Definition”
“Creative Memories Pyramid Scheme Accusations Untrue – FTC Settles Pyramid Scam Definition”
“Photo: ACN Pyramid Scheme Accusations Incorrect – FTC Clarifies”
“Photo: Celebrating Home pyramid scheme true or false? FTC Clarifies”

Each of the headlines listed above has appeared online in recent days — some of them carried by Google News, which published the feeds of SBWire, a news-release service. The release that uses both the FTC’s name and Herbalife, for example, carries an Aug. 5 dateline from Altamonte Springs, FL. The release that references the FTC and Javita carries an Aug. 2 dateline from Orlando, FL.

The release on Javita uses this deck: “Javita Pyramid Scheme question answered. FTC decides on Pyramid meaning.” Meanwhile, the release on Herbalife carries this deck: “Herbalife Pyramid Scheme Accusations Are Without Merit. Consumers Can Now Intelligently Determine Themselves Herbalife Pyramid Allegations Are Not True Based On FTC Pyramid Definition.”

The release that references Herbalife goes on to assert that Herbalife is “not a pyramid scheme at all by the FTC’s definition.”

Herbalife’s MLM program has been in the news for months. Billionaire Bill Ackman claims it is a pyramid scheme; Herbalife denies the assertion.

Each of the news releases referenced above appears to be a bid to sell an MLM “leads” program by planting the seed that the FTC recently has given the green light to each of the companies. The basis of the claims curiously appears to be a 15-year-old speech (May 13, 1998) an FTC official gave on the subject of pyramid schemes that in part defined pyramid schemes as schemes that “promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.”

That the speech was given in 1998 and may have less relevance 15 years later was not made clear in any of the news releases. Beyond that, the thinking of agencies such as the FTC and SEC may evolve as the schemes themselves evolve.

In the 1998 speech, the FTC official went to to say (italics added):

“Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company’s incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company’s distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.”

We’ll leave it to you to decide if it is wise for MLmers to try to shoehorn a 15-year-old speech into news releases in 2013 that imply the FTC recently has scrubbed each of the “opportunities” referenced above and made a legal conclusion that no pyramid schemes exist.

Aug 6, 2013
Gary Calhoun, MPB Today MLM Operator, Jailed In Florida

Gary Calhoun’s July 30, 2013, booking photo: Source: Escambia County Sheriff’s Office.

UPDATED 5:52 P.M. EDT (JULY 31, U.S.A.) Gary Calhoun, the operator of the MPB Today MLM program who was charged in December with racketeering under Florida state law, is listed as a prisoner at the Escambia County Jail.

Today was Calhoun’s sentencing date. The length of his sentence was not immediately clear. [July 31 UPDATE: Court docket updated July 31 to reflect three-year sentence in state prison, followed by 10 years’ probation. This note appears on the docket:

“DURING PROBATION THE DEFT. MUST OBTAIN PRIOR APPROVAL FROM HIS PROBATION OFFICER BEFORE ACCEPTING ANY EMPLOYMENT OR STARTING, PURCHASING OR IN ANY OTHER MANNER ASSOCIATING WITH A BUSINESS. THE PURPOSE OF THIS REQUIREMENT IS TO ENSURE THAT DEFT. DOES NOT IN ANY WAY ASSOCIATE HIMSELF WITH A MULTI-LEVEL MARKETING BUSINESS THAT COULD BE CONVERTED INTO A PYRAMID SCHEME OR OTHER ENTITY USED FOR ILLEGITIMATE PURPOSES.”]

Calhoun is 57.

One year ago tomorrow, federal prosecutors in the Northern District of Florida filed a forfeiture complaint against certain property linked to MPB Today and a companion grocery-delivery business known as Southeastern Delivery in Pensacola. The complaint, according to records, was brought to enforce laws against access-device fraud and fraud in connection with identification documents.

MPB Today had a presence on the Ponzi boards and was one of the stranger MLMs in recent years, with promoters claiming a one-time purchase of $200 could result in free groceries and gasoline for life. Some promoters claimed the “program” was backed by the U.S. government. Others claimed MPB Today was backed by Walmart. At least one promoter bizarrely tried to sell the “program” by positioning President Obama and then-Secretary of State Hillary Rodham Clinton, a former member of Walmart’s board of directors, as Nazis.

Despite claims that MPB Today was partnered with Walmart, another promotion read as such: If you “hate Walmart and have written a 603 page manifesto on how Walmart is trying to take over the world and steal your soul,” you should “stop making that pipe bomb and read how you can avoid Walmart and still make bank” with MPB Today, according to the pitch.

Some MPB Today affiliates licensed themselves to videotape commercials for MPB Today inside Walmart stores.

In April, a Florida judge ordered Calhoun “TO HAVE NO CONTACT OR RECEIVE ANY INCOME FROM ANY MLM,” according to the docket of the case.

In 2006, according to the U.S. Food and Drug Administration, Calhoun was associated with an entity known as Trim International (MyTrim.com) and illegally marketing a product known as “TCR Cell Rejuvenator.” The agency said the product was unlawfully positioned as a treatment for “Neurodegenerative diseases: Alzheimer’s, Parkinson’s, amyotrophic lateral sclerosis, axonal and other neuropathies, Down’s and other syndromes.”

TCR Cell Rejuvenator also was positioned as a treatment for “recurrent Herpes, common cold and flu,” amid MyTrim claims it could be used “to treat patients with Alzheimer’s, Parkinson’s, cancer and other infectious diseases and neurological disorders,” according to the FDA.

Meta tags on the site also referenced “prostate cancer,” the FDA said.

Jul 30, 2013
From Profitable Sunrise To ‘Guaranteed50kIn30days’: ‘What Would You Do With $50,800? Or Better Yet, What Would You Do With A MILLION $$!’

From a Jon Simmons’ pitch for Guaranteed50kIn30Days.

After the Profitable Sunrise intercontinental affinity-fraud and pyramid-scheme aimed at Christians, Rev. Jon Simmons has cast his net with a 5X5 matrix “program” known as “Guaranteed50kIn30days” and is fishing for a “team,” a source tells the PP Blog.

“Turn your $50 [into] a MILLION Dollars!” Simmons trawled.

Simmons was a Profitable Sunrise colleague of Nanci Jo Frazer and NJF Global Group. Frazer and two of her purported ministries were charged with fraud earlier this month in Ohio. Simmons was not charged. Profitable Sunrise may have scammed tens of millions of dollars in a cross-border fraud, the SEC said in April. Frazer and team may have driven $30 million to the scam, Ohio authorities said.

“What would you do with $50,800?” Simmons queried his audience about Guaranteed50kIn30days in an email, according to the source. “Or better yet, what would you do with a MILLION $$!”

Precisely what was “guaranteed” about getting $50,000 in a month wasn’t made clear in the pitch, which references a web entity known as PrivateMillionairesClub.com.

“Membership by Invitation Only,” the site says.

Schemes pushed by self-identified Christians that trade on claims of being private and exclusive have generated headlines in recent months. Profitable Sunrise was such a scheme. Zeek Rewards, which the SEC described in August 2012 as a $600 million Ponzi- and pyramid scheme, advertised itself as “private, invitation-only,” the agency said in court filings.

Guaranteed50kIn30days says it’s located in Nebraska as part of B & B Communications Inc. and is associated with entities known as B & B Communications Philippines Inc. and B & B Communications Hong Kong Limited. Web properties, according to the company, also include BandBOnlineAds.com and 2x2SuccessTeam.com, with BandBeBookStore.com, ShowMeTheFreebies.com, BandBSuccessClub.com, FilipinoSavingsClub.com and FilipinoSavingsClub.net also in the fold.

Frazer’s Profitable Sunrise team also targeted prospects in faraway lands. One of those lands — New Zealand — referenced Frazer’s group in a March 2013 warning about Profitable Sunrise. Ohio authorities have said they’d linked Frazer to “ProfitClicking,” a “program” that became the subject of actions in Italy and the Philippines.

According to the information provided by the source, a July 16 Guaranteed50kIn30days email from Simmons began, “Jon Simmons here. This is WAY BETTER THAN SGR!”

SGR appears to be a reference to a “program” known as “ShareGiveReceive.” Online promos for SGR position it as “A Ministry/Business . . . not operating like a regular business” and “A World Wide Community Of People Working For The Benefit Of All MAN Kind.”

Guaranteed50kIn30days, however, apparently blows SGR away — in Simmons’ view.

“This is Best program to come along in decades,” he told his email audience about Guaranteed50kIn30days. “We are talking real daily step by step training. A 30-day video training course that anyone can follow to be successful. True duplicating process.”

Another part of the pitch reads, “Get paid weekly every Wednesday by check, or have it loaded onto your Payoneer card. Go Quick! We just officially launched last Monday, July 1, 2013! Amazing earnings in 1 week!!!”

In the email, prospects were provided a link to a heart-tugging video featuring B&B co-founders Steve Borgman and Brian Barnhouse riding in an automobile and reflecting on their days spent living in rural poverty in Nebraska. Those painful days now are over, according to the video: Both men now are well-equipped on the vehicle front. Borgman owns “the biggest house in Gage County,” and Barnhouse resides in a home with a scenic river view.

The video was filmed in the region of Wymore, Neb., which has a population of 1,656, according to a road sign shown in the video. (Despite the newfound financial success of the duo, the mournful background music in the video seems more appropriate for a funeral dirge).

Simmons, according to his email pitch, also can provide help with getting “leads” for Guaranteed50kIn30days.

“Do you need help recruiting?” he asks. “I found a solution! Ask me about a great lead system I found for only $25 (one-time, NOT monthly)! Get your 5 for $50K easily! You can also use this Lead Scraper for ANY business. Imagine… No more having to talk to friends and family!!”

Jul 24, 2013
BIZARRE: ‘Program’ Dubbed ‘CashCropCycler’ Has Ponzi-Board Presence And Zeek Pitchman While Touting Payouts Through PerfectMoney, SolidTrustPay And EgoPay — And Saying It Provides JSSTripler-Like Signup Bonus Of $10

A “program” with the bizarre name of “CashCropCycler” (Triple C) is being pushed on the Ponzi forums, amid claims it issues cashouts through offshore payment processors linked to fraud scheme after fraud scheme and gives enrollees $10 just for signing up. An earlier HYIP scam known as JSSTripler/JustBeenPaid that appears to have morphed into at least two other scams also advertised recruits would be paid $10 for enrolling in its “program,” which purported to pay 730 percent a year (precompounding).

Like a series of recent scams, CashCropCycler purports to be a “revenue sharing and advertising” program. It also claims it is using Skype and Gtalk for customer service. The lead pitchman for CashCropCycler on the MoneyMakeerGroup Ponzi forum appears to be “mmgcjm,” the lead pitchman for the alleged $600 million Zeek Rewards Ponzi scheme at the same forum.

Whether CashCropCycler borrowed part of the JSS/JBP fraud pitch wasn’t immediately clear. Also unclear is whether CashCropCycler’s unusual name was designed to be provocatively ambiguous or as a taunt of some sort. Could the unidentified Triple C operators be suggesting they are using the HYIP world to crowd-source the cultivation of marijuana, for instance? Other HYIP schemes — CashTanker, BotFly and Insectrio, for instance — may have been named to taunt regulators and demonstrate just how gullible investors can be.

CashCropCycler curiously discusses the Triple C alliteration in another context, saying “The name ‘Triple C’ came about in year 2012 when we gave all our personal earnings to support the Clarion Children’s Choir, that was the best experience for us as a team.”

The “program” purports to be operated by “three friends, Americans by naturalization and Swedish by birth; Benson, Dave and Anderson.”

CashCropCycler’s website defines the trio as “ordinary people who find delight in been [sic] able to help our same human species. It doesn’t matter what country you’re from, what race you belong or how educated you are; we only care to help people by building a network that ticks, and this is what we enjoy doing.”

Records suggest that one of the domain nameservers (ian.ns.cloudflare.com) linked to CashCropCycler has been used in spam campaigns for everything from malware to potentially fraudulent National Football League jerseys and potentially fraudulent designer purses purportedly from Louis Vuitton.

Meanwhile, the CashCropCycler Terms of Service includes the strange phrase “Agreements shall be interpreted under the laws” — without identifying a jurisdiction or set of laws used if disputes occur. The Terms also confoundingly assert that “A member is neither an employee nor an independent contractor of CASHCROPCYCLER,” even as CashCropCycler asserts elsewhere on its site that promoters can earn MLM-style commissions totaling 15 percent over three tiers.

By plowing $10 into the scheme, according to the CashCropCycler website, members will earn “186% in 60Days” [sic]. A sum of $50 purportedly fetches “129.60% in 25days” [sic]. Recruits should feel good about the “program” (apparently) because the “script was tested for 68days [sic] before this official launch.”

And members also are permitted to engage in “Member to Member Transfer[s]” from inside the CashCropCycler system “for a 2.50% fee,” according to the website. Beyond that, according to the site, members can pay an exchange “fee of 8.70%” should they wish to have their earnings paid through a processor other than the one through which they joined the “program.”

Some purported exchange services were among the casualties of the Liberty Reserve money-laundering action in the United States in May. Federal prosecutors in New York said that the now-shuttered Liberty Reserve payment processor was facilitating any number of fraud schemes while helping criminals launder billions of dollars.

Even though CashCropCycler members purportedly are neither employees nor independent contractors of the “program,” they nevertheless are encouraged to (italics added/no edits made):

“Promote via banner/text advertisements on other advertising websites that you are a member of.

“Be active on the forums, including MoneyMakerGroup, TalkGold, DreamTeamMoney and Investment-Tracker .

“Including a link to CashCropCycler in your signature in forums.

“Traffic exchanges/Safe lists.

“Social media.

“Word of mouth.”

At least four ads that appear to highlight other HYIP schemes appear near the bottom of the CashCropCycler landing page. One of the ads is for “NeoMutual,” which uses a tagline of “we are crowdfunding.”

Some critics of crowd funding have voiced concerns that easing regulations on certain types of startup companies before appropriate safeguards are in place could lead to egregious marketplace abuses.

Ads for what appear to be HYIP schemes are displayed on the website of CashCropCycler. A purported opportunity known as NEO Mutual purports to be a “crowd funding” company through which members can use payment processors such as Perfect Money, SolidTrustPay and EgoPay that have been linked to multiple fraud schemes. NEOMutual also purportedly does business with bitcoins and PexPay — all while employing a “bank transfer” option. NEOMutual purports to have “Junior,” “Senior” and “Executive” plans that pay daily interest rates of 1.4 percent, 1.6 percent and 1.9 on sums between $20 and $250,000. NEO Mutual says it is located at Revolution Tower in Panama City, Panama. Like the “Profitable Sunrise” scheme, NEO Mutual purports to be in the bridge-loan business. In April 2013, the SEC called Profitable Sunrise a scam that may have gathered millions of dollars while using a “mail drop” and offshore bank accounts.

Also see CashCropCycler review on BehindMLM.com.

Jul 16, 2013
TelexFree Affiliates Gave AdSurfDaily-Like Coaching Tips, Instructed Prospects To Make Deposits At Bank Of America — And To Copy Slips To ‘Team Leader’s’ Gmail Address For ‘Expedited’ Service; TelexFree Also May Have TD Bank Account

“On or about July 14, 2008, [an undercover agent] opened an ‘upgraded member’ account with [AdSurfDaily]. ASD directs new members either to mail a money order or cashier’s check to its Florida office, or to deposit a certified check, money order or cash at ‘your nearest branch of Bank of America,’ directly into ASD’s BOA account and, thereafter, to fax a copy of the deposit receipt along with their membership number to ASD. On its website, ASD provides its BOA account number as [XXX.] Another [undercover agent] made a direct deposit to ASD’S BOA account by delivering a check to a BOA branch in downtown Orlando, Florida. Thereafter, [an undercover agent] faxed a copy of the deposit receipt via facsimile to ASD’s headquarters in Quincy, Florida.” — AdSurfDaily Ponzi scheme forfeiture complaint, Aug. 8, 2008

It was 57 degrees in Alpharetta, Ga., when this screen shot was taken to instruct TelexFree participants on how to deposit money in a TelexFree account at Bank of America in Shrewsbury, Mass. The promoter appears also to have had an interest in Bidify, an “auction” site whose business model was reminiscent of the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme. (Source: screen shot of section of a PDF instruction manual. Redactions/highlights by PP Blog.)

UPDATED 1:11P.M. EDT (U.S.A.) Information reviewed by the PP Blog shows that promoters of the TelexFree MLM scheme instructed their recruits to deposit money into a TelexFree Inc. account held at a branch office of Bank of America in Shrewsbury, Mass. The recruits then were advised to scan the deposit slip and email a copy to a TelexFree.com email address and optionally send a copy of the slip to an individual dubbed a TelexFree “team leader” who was using a Gmail email address from Google.

Recruits were told to photograph the slip using a cellphone or tablet computer before scanning it and submitting it via email, according to the instructions.

The TelexFree promoter using the Gmail address had to ability to “expedite” the process of crediting deposits in the recruits’ back offices at TelexFree, meaning recruits purportedly could start earning money from TelexFree faster because their deposits would be credited quicker, according to the instructions.

“Alternativey, you can contact your direct referrer, as several Promoters in our upline could also assist with direct deposits to their bank accounts and transfer funds to your registered account immediately,” the instructions note.

The instructions, which appeared in PDF form in January 2013, were circulated on the Internet. Among other things, the instructions suggest TelexFree has insiders who can speed the flow of money and potentially are collecting the private information of their recruits and potentially subjecting them to identity theft.

In the early part of the year, some TelexFree promoters worded online promos to suggest that the U.S. government had given the stamp of approval to TelexFree’s operations in the United States. The U.S. government does not issue such endorsements. It is somewhat common in the HYIP sphere for “programs” or promoters to plant the seed an “opportunity” has been approved by the government.

A TelexFree promo dated March 12, 2013, on Newswire.net, for example, claims that the “TelexFree business opportunity is open to entrepreneurs in Brazil and has recently opened up internationally including being authorized to operate in the United States.”

TelexFree is under investigation by multiple agencies in Brazil, amid pyramid-scheme and securities concerns. (See BehindMLM.com story dated today on the denial of a TelexFree appeal in Brazil.) Whether a U.S. investigation is under way is unknown.

What is known is that some affiliates in Brazil appear to believe incorrectly that the U.S. government has approved TelexFree’s operation.

And it’s also known that the deposit instructions provided to TelexFree recruits strongly resemble the instructions given recruits of the AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008. The agency seized at least 10 bank accounts held by ASD President Andy Bowdoin at Bank of America and at least five other Bank of America accounts held by an ASD insider. Those 15 accounts ultimately proved to hold about $80 million.

At least one undercover agent followed ASD’s instructions to make a deposit at Bank of America and to fax the information to ASD, according to court filings in the ASD case. Federal prosecutors in the District of Columbia later applied successfully for warrants to seize the accounts, alleging that ASD was a Ponzi scheme using the U.S. banking system to sustain the scheme.

Bowdoin later pleaded guilty to wire fraud and was sentenced to 78 months in federal prison.

As appears to be the case in TelexFree, some ASD members also claimed an ability to speed the flow of money while perhaps making back-office exchanges with recruits. It is possible that ASD never knew its own real bottom line because of the back-office dealings of insiders and other sponsors, including promoters who instructed recruits to pay them directly instead of ASD.

Some TelexFree affiliates have claimed that a payment of $15,125 to TelexFree will create an income of at least $1,100 a week for a year. The instructions on how to deposit money in Bank of America and scan receipts also claim that TelexFree is using a credit-card processor known as ProPay.

Some TelexFree affiliates have claimed TelexFree also is banking with TD Bank. In those cases, affiliates are instructed to send money to TelexFree LLC — as opposed to sending it to TelexFree Inc., as was the case with the Bank of America instructions.

This set of instructions appeared in a promo for TelexFree dated Jan. 17, 2013. (Source: screen shot. Redactions/highlights by PP Blog.)

TelexFree Inc. uses a Massachusetts address; TelexFree LLC uses a Las Vegas address, according to public records. Why some promoters are instructing recruits to send money to the LLC version of the name at TD Bank while others are instructing that money be sent to the Inc. version at Bank of America is unclear.

Jul 8, 2013