Category: Writing And Branding

  • EDITORIAL: Grab Your Umbrella And Air Freshener: Data Network Affiliates’ Vomit Spigot Wide Open And Raining Down On World Of MLM

    EDITOR’S NOTE: Readers with queasy tummies are duly cautioned that this post is on the subject of MLM vomit. No, the troops aren’t packaging and selling regurgitated stomach juice and chunky bits that pay commissions 10 levels deep — at least not yet. This post discusses MLM advertising vomit as practiced by Data Network Affiliates, which has declared that a mysterious practitioner known as “Mr P” is promoting the “D.N.A. 1000 Team.” Mr. P is said to be a “19 Time Million Dollar Earner” who “Holds Every MLM World Recruiting Record.”

    Here, now, our take on the vomitous pitch . . .

    Incoming! If you are a member of Data Network Affiliates (DNA), you have a duty to grab your umbrellas, air freshener and garden hose and warn your downline to do the same. It has become clear that the company has turned its vomit spigot wide open.

    Yesterday’s vomit attack followed on the heels of a vomitous flurry late last month that prompted members to imagine themselves racking up 10,000 miles while recording license-plate data for the company.

    “Imagine driving 10,000 miles for your DNA Business = up to a $5,000 Tax Deduction,” DNA prompted members in May.

    If you are a member of DNA — and if you are a multilevel-marketing (MLM) aficionado or one of the industry’s so-called servant-leaders — you have a duty to warn all potential prospects to be prepared for sustained email vomit attacks. Advise them that, if they intend to open the emails, to make sure the laptop on their home-office network works outdoors.

    Under no circumstances should DNA emails be opened indoors. The vomit they project can damage your carpeting, furniture, curtains and fixtures, all while stinking up the inside of your home, perhaps forever. Remember: A stink-removal crew is expensive, and there’s no guarantee the stench will fully dissipate. You could awaken in the middle of the night six years from now, take a sniff and again reach the horrifying conclusion that, yep, its still there.

    Important: Open DNA’s emails only outdoors. The initial burst of pressure from the vomit will be sufficient to pump it on an arc away from your laptop, and your laptop’s built-in vomit seal will protect it from damage. The seal will close instantly when it senses a temperature drop in the the hot-air belch that accompanies the vomit, thus protecting your computer from drips and embarrassing streaks from run-off.

    Open the emails quickly and step back. Be prepared: It may take up to three minutes for the vomit to stop gushing. Have the umbrella at the ready in case you were unable to step back quickly enough and got caught in the vomit storm.

    After the storm subsides, use the garden hose to clear the umbrella of both liquid and chunky vomit. Apply the air freshener liberally to the umbrella. Let it dry. Repeat the process as necessary or buy dollar-store, disposable umbrellas in bulk. Hint: A dollar store also is a great place to buy air freshener in bulk.

  • OFFICIALS: Ponzi Schemes, Investment Fraud Have Led To Staggering Losses In Utah; Hundreds Of Potential Perpetrators Identified

    UPDATED 8:38 P.M. EDT (U.S.A.) Recent Ponzi schemes and cases of investment fraud have cost Utah residents an estimated $1.4 billion, the FBI said today.

    About 370 investigative “subjects” — defined as “potential perpetrators” in current cases — have been identified, and the agency and its law-enforcement partners have embarked on a public awareness and education campaign aimed at keeping Utahns safe from scammers.

    About 4,400 people have been affected by investment-fraud schemes in the state, the FBI said. The education campaign includes billboards and public-service messages.

    Under the umbrella of the Utah Securities Fraud Task Force, the FBI and its partners — including the SEC, the IRS, the U.S. Postal Inspection Service, the Utah Department of Commerce’s Division of Securities, the Utah County Attorney’s Office, the United States Attorney’s Office for the District of Utah and the Utah Attorney General’s Office — have produced a video that encourages viewers to be aware that schemers may target them based on their religious affiliation or interests.

    “Affinity fraud is when someone you know — for example a church member, a coworker, or a friendd — takes advantage of you in an investment fraud scheme,” said James S. McTighe, FBI special agent in charge.

    Con artists have been known to deliberately target members of the Church of Jesus Christ of Latter-Day Saints, the FBI said.

    No group of believers — and no group of people who share a common bond — is immune to the cunning of expert con men, the FBI added.

    An investor featured in the educational video said her experience of being duped can serve as a warning to others:

    “He was a religious man, so he says, and he really, he really put on the ‘You know I am so guided by the spirit’, and ‘I know I am here to help you’, and ‘just trust me,’” the woman said.

    Nothing about a Ponzi scheme is good news, warned the SEC’s top official in Salt Lake City.

    “Ponzi schemes always collapse eventually and it’s typically because you run out of newer investors,” said Ken Israel.

    How do fraudsters profit from a Ponzi scheme?

    “The hallmark of the Ponzi scheme is that you use money from new investors to pay off your old investors and of course put a bunch in your pocket at the same time,” said Keith Woodwell, director of the Utah Division of Securities.

    Officials warned the public to be on the look out for “signs of trouble”:

    • The investment offer is unsolicited.
    • It sounds too good to be true.
    • You’re promised big monthly or yearly returns with little or no risk.
    • You’re asked to keep the investment offer secret.
    • The promoter cannot answer specific questions or provide you with written financial documentation.
    • Slick websites and glossy literature can be deceiving, and also be suspicious of documentation that looks unprofessionally produced.
    • The promoter won’t give you time to research the investment.
    • You are told you are one of the lucky few allowed in on the investment.
    • You are required to bring in more investors.
    • The salesperson is not licensed or the product is not registered.

    “Con artists who run Ponzi schemes often promise big financial returns and may tell potential investors they operate programs that can sound impressive,” the FBI said. The agency advised investors to do their homework and be skeptical of pitches for programs such as these:

    • Foreign Exchange Currency Trading.
    • Prime Bank Investment.
    • Commodities Investments.
    • Real Estate Investments.

    “Research before you invest, the FBI warned, recommending these resources for Utah residents:

    Get educated for free at the June 30 “Fraud College” at Utah Valley University in Orem

    Watch the Task Force video.

    Get more information from the FBI:

    NOTE: This story has been republished at a URL that is different than its original URL. Although this post reflects a date of June 13, it is not the original publication date. Click here to read why.

  • Narc That Car President Fidgets, Struggles Through Lengthy Fox 4 News Interview In Dallas; Confirms That Members Who Don’t Recruit Make $5 A Month And Will Not Break Even For Nearly Two Years

    EDITOR’S NOTE: At the bottom of this post you’ll find links to the Fox 4 News website in Dallas-Fort Worth. We recommend you watch the video of the main report on Narc That Car broadcast by the station, and also the videos of a sit-down interview with Narc President Jacques Johnson. The interview was eminently fair, and yet the pyramid concerns remain . . .

    Narc That Car President Jacques Johnson confirmed yesterday in an interview broadcast by Fox 4 News in Dallas-Fort Worth that members who enter license-plate numbers into the company’s database but do not recruit are paid only $5 a month — 50 cents per plate.

    Narc That Car also is known as Crowd Sourcing International or CSI. Narc limits its data-gatherers to entering only 10 plates per month.

    Fox outlets in Atlanta, Los Angeles and Dallas now have broadcast reports about Narc. Despite being given access to the airwaves, no Narc representative or official — including Johnson — has been able to lay to rest questions about whether the company is operating a pyramid scheme.

    Johnson struggled in the lengthy Fox 4 News interview when trying to explain why Narc limits members to recording only 10 plates a month if its aim is to build a well-populated, viable database that would be appealing to clients willing to pay a fee for the information.

    As has been the case in its previous encounters with the media, Narc’s explanations left more questions than answers. Despite being given ample air time by Fox 4, Johnson still left the pyramid concerns on the table by confirming there is virtually no way to make money in Narc if a member does not recruit other members and by declining to name Narc’s clients for its database product.

    Johnson agreed with reporter Steve Noviello that it would take a Narc member not interested in recruiting 20 months — nearly two years — just to break even. Narc charges members a one-time, $100, up-front fee to join the program, which has a “F” rating from the Better Business Bureau.

    If a nonrecruiting member chose to pay Narc an optional $24.95 a month for a website on top of the $100 sign-up fee, the costs of belonging to the program never could be retired because paying Narc the fee would carry with it a built-in loss of $19.95 a month even if the member stayed with Narc long enough to retire the up-front fee, according to the Fox 4 report.

    Even if such a member opts not to pay for a website, the minimum amount of time it would take for the member to retire the $100 fee is about 600 days because of the 10-plate-per-month limit. According to the math of the program, such a nonrecruiting member would earn an average of about 16.66 cents per day.

    Johnson struggled throughout the interview to explain basic claims about the Narc program. The Fox 4 package includes multiple parts, including a lengthy interview with Johnson divided into four parts. (See the link under the video box below to visit the Fox 4 website.)

    Visit Fox News 4 to view the entire interview with Johnson.

    NOTE: This story has been republished at a URL that is different than its original URL. Although this post reflects a date of June 13, it is not the original publication date. Click here to read why.

  • POLL: How Would You Rate The MLM Sales Pitches Of Data Network Affiliates On Scale Of ‘A’ To ‘F’?

    By now you’ve likely heard about Data Network Affiliates, a multilevel-marketing (MLM) company that launched by telling prospects it was in the business of recording license-plate numbers useful for the AMBER Alert program and then morphed virtually overnight into a purported cell-phone business.

    “GAME OVER — WE WIN,” DNA told members in a message that offered unlimited cell-phone service for $10 a month. Within three weeks, however, DNA acknowledged that it could not offer such pricing.  In an email to members, the company conceded that its earlier message announcing that it had conquered the cell-phone business within days of entering it was a mistake.

    For good measure, DNA blamed an ambitious reseller for making it believe it could offer unlimited service for $10 a month, while also revealing it hadn’t researched cell-phone pricing structures prior to announcing it had conquered the trade.

    Today the PP Blog is publishing a new poll that asks readers to rate DNA’s sales pitches. Some readers may wish to search the PP site before responding to the poll. The search function is in the upper-right corner of the Blog.

    Today is May 25, 2010. As of the publication of this post, the poll is in the right sidebar, and also enclosed within the post.

  • ESSAY: Why Narc That Car Has A Duty To Reveal The Names Of Its Database Clients And Police Departments Whose Members May Be Narc Consultants

    This promo by a Narc That Car member appeared on a .org website that used AMBER Alert's name in its URL. The U.S. Department of Justice, which administers the AMBER Alert program, denied in February that it had any affiliation with Narc. Days later, Narc removed a reference to AMBER Alert in its own video production to advertise the opportunity. The actions of both Narc and its promoters have led to questions about whether the company had come into possession of money based on misrepresentations that caused prospects to believe they were helping out worthwhile causes by joining Narc. The very first Narc promotions observed by the PP Blog were authored by members of AdSurfDaily and Golden Panda Ad Builder, companies implicated in a Ponzi scheme involving tens of millions of dollars.

    EDITOR’S NOTE: Narc That Car says it is a private company and has no duty to reveal the names of its data clients. This essay challenges Narc’s arguments.

    The public has a compelling interest not only in learning the identities of Narc That Car’s clients through appropriate channels, but also in learning the identities of the company’s data-gatherers who may hold jobs in the public sector and are supplementing their income by moonlighting for Narc as consultants.

    Narc is a highly questionable business. Moonlighting by public employees in highly questionable ways is one of the elements in the Scott Rothstein Ponzi scheme in Florida. Rothstein is alleged to have employed off-duty members of law enforcement as bodyguards while he orchestrated a $1.2 billion fraud. Moonlighting also is an element in a recent case in which investigators in Georgia probed allegations of sexual assault against Pittsburgh Steelers’ quarterback Ben Roethlisberger, who employed off-duty police officers as bodyguards.

    The assault allegedly took place in the women’s restroom of a nightclub. Roethlisberger was not charged in the case, but was suspended for six games by the NFL for conduct detrimental to society and the league. Two Pennsylvania police officers working for him potentially face disciplinary action for sullying the reputations of their departments and not extricating themselves from a situation in which a crime or crimes might have been committed in their presence.

    Why Wouldn’t The BBB Have Questions

    Today the PP Blog challenges its readers, including its critics, to read this essay, observe the sampling of graphics and answer a few simple questions: Why wouldn’t the Better Business Bureau, responsible businesspeople, journalists, law-enforcement agencies and taxpayers not have questions about Narc That Car? (Now suddenly known as Crowd Sourcing International after issuing checks to members under at least two different names earlier in the year.)

    And why isn’t the company stepping forward with answers that enlighten, not deflect or hop-scotch, around key issues? The company should supply the information to the Better Business Bureau and any law-enforcement agency that asks for it.  Information Narc provides could be kept private while any investigation ensues and released by the government if it is determined that wrongdoing has occurred.

    Narc says it is in the business of paying people to record the license-plate numbers of cars for entry in a database that will be used by “lien holders” and companies that repossess automobiles when owners default on loans.

    Members of Narc say they record plate numbers randomly — in places such as parking lots — on the off-chance the vehicle is or later will become a target of the repo man. Narc’s data-gatherers are required to provide the address at which the plate number was viewed and recorded. Because the location data likely will be stale and the car likely will be moved before it becomes the subject of a repo bid, there are legitimate concerns about the actual usefulness of the data to lien-holders and concerns about whether Narc is just an excuse for a business, not an actual business capable of making profits from retail sales to database clients.

    There also are significant concerns about privacy, and the propriety, safety and legality of the Narc program. Some Narc members have advertised that they collect “extra” plate numbers and use them as incentives for prospects to qualify for commissions without gathering data themselves, a practice that leads to troubling questions about whether Narc members have provided corrupt data to the company. An unknown number of plate numbers recorded in Narc’s database may be third-party sightings passed along to incoming members who entered bogus addresses at which plates purportedly were sighted — all to qualify for payments.

    Equally troubling is that Narc, which has to know that some members are providing plate numbers for downline recruits, does not reveal the names of its database clients, saying the information is proprietary. There may be no way for existing Narc clients to know whether the data Narc reportedly is selling has been corrupted by the practices of members so eager to earn money that they’re giving away plate numbers and the recipients of the plate numbers are fabricating addresses at which the plates were spotted.

    Corrupt data is worthless data.

    There are reports that Narc can verify the validity of a plate number — but it is inconceivable that Narc has the means to verify that the plate actually was spotted at a specific address. Adding to the ripples of a potentially corrupt data stream is that some Narc members have instructed incoming members in purported “training” videos not to bother noting the address at the time the plate number was sighted. Rather, the prospects have been told to go home and look up the address on the Internet or refer to a store receipt if they happened to be shopping at, say, Walmart or Giant Eagle, when they were doing their side business for Narc.

    Members appear to be able to enter any address they please, whether the car was spotted there or not. Meanwhile, some members have openly said they don’t like their neighbors knowing they’re recording plate numbers for a fee, so they record the numbers in the same fashion a character in a spy novel hides behind a newspaper or makes himself invisible in plain sight. The casualty is transparency at virtually all levels, meaning clients don’t know if they’re buying reliable data, members of the public don’t know their cars are being watched and if profiles are being created, and Narc members don’t know anything other than the information Narc chooses to share.

    Public Esteem For Police At Stake Amid Confusing Claims

    Narc members say police officers have joined the Narc program as data-gatherers and upline sponsors. If true (and the PP Blog believes that police officers are involved in Narc), it is incumbent upon Narc to publicly identify the police departments for which the officers work.

    Because of claims made by Narc promoters, the public has the right to determine if officers who belong to Narc are collecting data while on “city time” or during their off-duty hours and assisting Narc in ways that nonpolice members of Narc cannot.

    Why? Because Narc largely operates in the shadows. Moreover, some of the public claims of its promoters have been beyond reckless — and only Narc knows the truth about how it is paying members and using the data they collect. If Narc has police officers among its ranks amid these circumstances, it means the officers are promoting a business they may know very little about.

    Police officers should not be promoting a business they know very little about, especially amid these circumstances. That Narc is paying members is not evidence that no wrongdoing is occurring. All successful pyramid and Ponzi schemes pay members. Moreover, the advertising claims of Narc promoters alone give officers all the information they need to pull out of Narc today and potentially spare themselves and their departments embarrassment later — just as Rothstein’s bodyguards and Roethelisberger’s bodyguards should have pulled out.

    That the officers are repping for Narc and not providing security services is immaterial. Narc emits the same kind of stink. It stinks even if it’s legal.

    Few people would begrudge a police officer from supplementing his or her income in legitimate fashion — but that is not the issue here. The issue is whether Narc and many of its data-gatherers are legitimate. The Better Business Bureau has expressed concerns that Narc might be a pyramid scheme. Whether Narc is a pyramid scheme is not the only issue, however. This essay points out some of the other issues.

    Only Full Transparency Can Lead To A Clean Bill Of Health For Narc

    Absent full transparency from Narc, no police officer or nonpolice officer gathering data, asking people to send money to Narc and building Narc downlines — can determine if they are promoting a scam.

    Period.

    There have been reports in recent days that Narc — through its own unfiltered channels — has claimed the reason it does not publish data clients’ names is because such clients got “incessant” calls when it did publish the names.

    This claim strikes us as the precise kind of dreck that cannot pass the giggle test on Main Street but somehow passes the plausibility test in the most florid hallways of MLM, which much of America and the world already view as a cesspool. Not only is the claim absurd, it also is contrary to promoters’ claims that Narc was employing a revolutionary MLM concept by which members would build the database product first and Narc would sell it to retail customers later. This approach could be illegal if Narc does not have “true” customers (database clients) in  sufficient volume to destroy the pyramid concerns. Although some Narc promoters have claimed the company has “investors,” the claim itself only leads to more questions: Who put up the purported investment money if investors actually exist?

    Narc promoter “Jah” (see below) has been telling prospects for months that Narc reps engage in “No Selling, Trying, Switching, or Using Anything” — in short, Narc’s data-gatherers do not buy the retail database product. Rather, they pay an up-front fee to earn the right to submit plate numbers, become Narc recruiters and have the prospect of earning more money by sponsoring more fee-paying members who pay for the right to submit plate numbers and become recruiters themselves, and Narc sells the database to another set of customers.

    These claims and similar claims have led to concerns that Narc was operating a pyramid scheme. Such an approach also can be viewed as a Ponzi scheme. Absent continuous membership growth and real profits from sales to retail database customers to support the payments to Narc’s data-gatherers, the business could collapse.

    A video promotion in February by another Narc member showed a tab labeled “Clients.” The video was recorded inside the member’s Narc back office and appeared on YouTube  — after Narc had been operating for months. “Don’t worry about that right now,” he said of the “Clients” tab. He did not explain why members should not concern themselves about the tab, which led to questions about whether Narc had data clients in sufficient volume to quash concerns that members were getting paid exclusively or almost exclusively with money from other members — not retail sales to database clients.

    This Is ‘Training?’

    The promo was described as a teaching tool in a YouTube headline titled, “NarcThatCar Training Video.” In the same video, viewers were told that the parking lots of libraries, schools and universities provided a steady stream of license-plate numbers to be harvested and entered into the Narc database.

    “So, carry a pen and paper with you,” the narrator instructed. “You can go to parking lots. You can go to libraries. You can go to schools. My wife goes to the university, and just goes through the parking lot and collects license-plate numbers.”

    An address in the video suggests plate data was recorded in or around the University of Nevada, Las Vegas. The address is the same street address as the UNLV campus. Indeed, one Narc promoter after another has pointed one prospect after another to sources of license-plate data, implying that cars parked on both public and private property were fair game for downline commissions.

    Not even public schools, universities and libraries were off limits in Narc’s universe of members. Narc itself has said its database will be used to locate people, boats, cars and any item imaginable. Data is being mined on both private and public property, and Narc itself says the plate numbers are checked against “the DMV,”  commonly known in many U.S. states as the Department of Motor Vehicles.

    If Narc’s data is checked against the DMV, then Narc’s business is the public’s business. The public has an interest in determining the identities of Narc’s data clients in no small measure because the data potentially could be used to monitor private citizens and people who hold sensitive jobs in government, science, research and the military.

    Narc’s explanation that its clients’ names are proprietary is unacceptable. Its own members are claiming plate numbers are “public” information and “training” prospects to drive through “university” parking lots and the lots of retail stores and restaurants to get a supply of tags, which are checked against DMV records.

    If you’re shopping at Walmart, for example, your plate number could be recorded and entered in Narc’s database by a Narc participant in search of MLM commissions and interested in recruiting prospects who could record your plate number elsewhere, leading to even bigger commissions and an even greater loss of your privacy. Incredibly, some Narc promoters have anticipated the public’s objection to such a pursuit, answering it with a chilling argument that people who’ve done nothing wrong have nothing to fear.

    That is just downright creepy. Is it any of Narc’s business where you park your car because it wants to help the repo man repossess your neighbor’s car? And what if the repo man isn’t Narc’s only client?

    What if a company poses as a repo company or a “lien holder” company and has an objective totally unrelated to the repossession of collateral? What if a suspicious husband with a violent streak, for example, wants to monitor sightings of his wife’s car? What if a private investigator wants to determine where you spend your time? What if the government wants to determine if you’re seeing a shrink? What if an unfriendly government wants to monitor the whereabouts of an important government official or scientist?

    Narc’s purported assurance that members don’t record the plate numbers of government vehicles is hollow because government employees own private cars and do not always travel in government vehicles. The sensitivity of their jobs does not vanish if they are in their private cars whether on-duty or off, and the prospect that a data profile on the movement of these cars can be created and offered for sale is unacceptable.

    It is unacceptable whether the target for monitoring is employed by the government or is just an ordinary citizen employed by any private company. Cars are inexorably linked to their owners. To track the car is to track the owner. Left unchecked, Narc could be used as a data source by private and public entities to monitor people. That is inconsistent with liberty and privacy. It is offensive by its very nature because it potentially puts people who don’t know they are being watched under a microscope, and it is offensive to any notion of propriety because it potentially puts private citizens in the business of spying on other private citizens to qualify for downline commissions. That Narc’s own members are cheerleading for the supposed the riches to be made by helping the repo man theoretically get the neighbor’s car causes one to wonder if America is taking leave or its senses and willing to package and sell anything.

    What’s next? News releases from Narc that announce yet-another successful repo brought about by the company’s army of commission-based spies?

    A World-Class Example Of MLM Excess

    MLM has served up a doozy this time: Peel away the hype and Narc emerges as a private spy-agency-in-waiting. At last count, 52,000 people have expressed a willingness to help Narc build the database and share in the joy of knowing they’ve helped the repo man separate a struggling, single, stay-at-home Mom from the car she shares with her laid-off husband who lost his job when the economy went in the tank.

    Lien-holders do have the right to seize their collateral if a car owner is in default. Lenders do have a corresponding duty to be responsible to investors and depositors to protect assets. But to create a cheerleading section for the repo man when unemployment is at 10 percent is something only the darkest minds in MLM could serve up. That people seem actually to be comforting themselves with the thought that they’ve performed some sort of civic duty by ratting out their neighbor to the repo man and somehow made America a better place is one of the surest signs yet that a big pocket of U.S. commerce has become morally bankrupt.

    And that’s before the Narc privacy and security issues are examined in any detail.

    Does anyone really want Narc to come into possession of data that could be used to create movement profiles on private citizens in any context — all under some implausible theory that the repo man needs extra help?

    Sensitive research — including research paid for by the government — is performed by some universities. The data could be used to monitor people who hold sensitive jobs. This makes it the public’s business to determine precisely what Narc is doing and how and why it is doing it.

    A ‘GOOGLE Opportunity Like Never Before’

    Narc, according to an email members received, also is blaming the media for not understanding what it is doing. Its response to the bad press it has received recently was to tell members not to worry, that Narc remains a “GOOGLE Opportunity like Never before” — and then close the email with insipid, flowery motivational drivel, including this gem: “EVERYTHING is funny when you [sic] making MONEY!”

    Even dispossessing your cash-strapped neighbor of his car, apparently, is funny as long as it pays a downline commission.

    The email remided us of the now-defunct Surf’s Up forum, which promoted the now-defunct AdSurfDaily Ponzi scheme by instructing members that “there are no prizes for predicting rain, only for building arks.” Perhaps finding the fuel they needed in Surf’s Up’s trite prose, many members of ASD pressed forward, introducing prospects susceptible to the harmful power of trite prose to one Ponzi scheme after another.

    As we proceed in this essay, we ask readers to note that check-waving videos and “earnings” reports produced by some members of MLM programs are not evidence of success or honesty. It often is the case in the MLM sphere that promoters who throw caution to the wind and pitch programs they know little or nothing about end up the biggest winners, with the vast majority of participants breaking even or losing both money and time that could be better spent trying to make ends meet by other means.

    Moreover, it often is the case that willfull blindness and forced ignorance are the dominant traits displayed by promoters. Incongruously, a lack of knowledge about companies and products is what often drives MLM profits.

    Practiced hucksters often prefer ignorance themselves, while also preferring prospects who will not ask hard questions and are willing to pass along hype and unchecked information as though they were the high gospel of truth.

    BBB’s Concerns Grow

    Although Narc That Car provided the identity of a single, purportedly “major” client to the Better Business Bureau April 27, the BBB now says “the client’s identity only raises more concerns” about the company.

    The BBB did not disclose the name of the Narc client or reveal why its doubts were heightened after Narc provided the information. On its website, however, the organization said it is “communicating” its concerns about the client to Narc. The BBB also noted its inquiry into Narc advertising claims remains open. The advertising inquiry began Jan. 18. It has been unresolved for nearly four months.

    On March 3, the BBB noted, the organization asked Narc to provide a “comprehensive” list of clients. Narc responded April 27 by providing the name of “one of its major clients,” a development that not only did not dampen the BBB’s concerns that Narc was using a pyramid business model and did not have a product with true value, but also ramped them up.

    Narc That Car has identified Rene Couch as its vice president of marketing. He also has been listed by titles such as executive vice president and chief field advisor, leading to questions about whether Narc and its promoters were making things up as they went along.

    Narc already has an “F” rating from the BBB, the lowest score on the organization’s 14-point scale. In the past two weeks, at least two television stations in major markets in the United States have aired reports about Narc, questioning Narc’s business practices, the level of knowledge Narc’s promoters have about the Dallas-based company and Narc’s willingness to address the questions in an atmosphere of transparency.

    Meanwhile, some Narc promoters have been attacking the BBB and accusing the TV stations of biased reporting — instead of insisting that Narc get out in front of the stories and concerns and put the issues to rest.

    BBB Under Attack

    One of the promoters attacking the BBB is Ajamu M. “Jah” Kafele. Kafele once was accused in Ohio of practicing law without a license and ordered to pay a civil penalty of $1,000 by the Ohio Supreme Court after the bar proved its case against him.

    Attorney or not, Kafele is no stranger to the courts. What follows in the passage below is an exchange between Kafele and the attorney for a law firm he had sued for attempting to collect a debt. The exchange started after the lawyer asked Kafele how old he was. In response, Kafele attempted to assert his 5th Amendment right not to answer the question — in a case in which he was the plaintiff, not the defendant, and a case in which a federal judge admonished him that his “invocation of the Fifth Amendment in response to that question was improper.”

    A. [Kafele]. I don’t recall my age. Next question.
    Q. [Defense counsel]. What was your date of birth?
    A. I don’t recall my date of birth.
    Q. Do you have a driver’s license on you?
    A. No, I don’t.
    Q. Do you have any form of identification on you?
    A. No, I don’t.
    Q. Where were you born?
    A. I don’t recall.
    Q. Do you have parents?
    A. I don’t recall.
    Q. Do your parents — are your parents living or deceased?
    A. I don’t recall. Are you going to ask me some relevant questions to the defense and claims or are you going to find out about my livelihood for your personal gain?
    Q. You’ve indicated you don’t recall whether —
    A. That’s right.
    Q. — or not you have parents. Do you have siblings?
    A. I don’t know.
    Q. Are you married?
    A. I don’t recall.
    Q. Where do you live?
    A. I don’t recall.
    Q. What’s your home address?
    A. I don’t recall.
    Q. How long have you lived there?
    A. I don’t recall.
    Q. What’s your current occupation?
    A. Who said I had an occupation?
    Q. Are you gainfully employed?
    A. Who said I was employed?
    Q. I’m asking you a question.
    A. I’m asking you, who said I was employed?
    Q. Are you employed?
    A. I don’t recall being employed.

    Three-figure, check-waving YouTube video by "Jah," who publicly announced his downline group was "not going to be out here flashing, you know, five-figure checks.” The video, which featured a claim that repping for Narc was like working for the "Census Bureau," later was removed from YouTube's public site. Why it was acceptable to publish a three figure-check but not a five-figure check was never explained.

    Strikingly, Kafele, who once believed it was prudent to sue lawyers who were trying to collect on a debt, now has thrown in his lot with Narc That Car, which says it wants to help repossession companies collect their collateral when buyers default on loans. The case cited above did not have a happy ending for Kafele: A federal judge tossed the preposterous lawsuit he had brought, saying Kafele had engaged in “egregious” conduct.

    “Plaintiff’s repeated and persistent refusal to participate in the discovery process has clearly been willful and done in defiance of the express and unambiguous orders of this Court,” U.S. District Judge John D. Holschuh said. “As a result, the defendants have been denied virtually all discovery in this case. Moreover, plaintiff has been warned — most recently in the April 4, 2005, Opinion and Order granting defendants’ motion to compel and awarding monetary sanctions against plaintiff, . . .  that his continued refusal to participate in the discovery process would result in the dismissal of the action. Nevertheless, plaintiff persists in attempting to transform the litigation process initiated by him into a game. Under these circumstances, no sanction other than dismissal of the action is appropriate.”

    Kafele now is telling prospects he is an authority on Narc That Car. He said he has hundreds of members in his downline. He has been conducting meetings in Ohio to recruit even more prospects, according to his website.

    Fox TV Reports Exposed Promoters’ Willful Blindness

    Not a single Narc promoter approached by Fox 5 in Atlanta in a package aired recently could identify a single Narc data client — and yet the promoters were out in force recruiting people for the firm. Meanwhile, Fox 11 in Los Angeles recently visited YouTube and reported on unsubstantiated claims passed long by Narc promoters to a worldwide audience, noting that California Attorney General Jerry Brown was seeking information on the firm.

    It is known that attorneys general from at least three states — Georgia, California and Texas — are aware of growing doubts about Narc’s business practices.

    Narc’s approach — and the approaches of its promoters — have caused even longtime proponents of multilevel marketing (MLM) to question whether the often-controversial industry had reached an all-time low and whether participants would buy into any scheme under the sun. It is clear that promoters either do not know if Narc is engaging in legitimate commerce or do not care if it is not

    Narc promoter shows prospects that parking lots at the University of Nevada Las Vegas are an excellent source of license-plate data. Narc prospects in this promoter's YouTube video were given no guidance on whether the university or campus police needed to be consulted before recording the plate numbers of students, faculty and employees. The promoter said "libraries" were excellent sources of license-plate data.Â

    — as long as commission checks for recruiting members keep streaming in.

    As things stand, there is no way to determine if Narc is operating legally. The reason there is no way is that Narc does not reveal the names of clients, will not step out of the shadows, put an executive and attorney on TV or consent to a probing interview by a print journalist to answer the doubters and publish verifiable financial data audited by a CPA that shows inputs and outputs and the sources of revenue.

    Any argument that suggests members are not entitled to this data or that the data is proprietary because Narc is a “private” company is not going to fly. The company’s promoters are saying that license-plate numbers are “public” information available for the harvesting by a membership roster of 52,000 people for the purpose of populating a database that Narc itself has said is going to be used to locate people, cars, boats and any item imaginable. That alone makes it the public’s business. Beyond that, promoters say Narc is using government databases to verify data. The assertion that Narc is using the DMVs of America’s 50 states to verify registration data gives the public a compelling reason to demand answers from the company.

    Narc has a duty to tell the public through appropriate channels precisely what database it is using to cross-check data entered by members and how it is accessing the database. It also has a duty to reveal the names of its clients, explain how it screens clients, explain how it screens its data-gatherers, explain whether Narc is able to connect a car to a person when members enter license-plate numbers and explain how the data is secured.

    Absent complete transparency, the privacy of every person whose tag number is entered by a Narc member is a potential casualty. It is inconceivable that Narc is empowering itself to collect your license-plate number — no matter where you park — because it has secret clients in the business of repossessing cars and there is a small chance that you are behind on your car payments or a person you do not even know parks his or her car in the same parking lot as you and is behind on his or her car payments.

    This is the business Narc has chosen to enter — and the public has a compelling interest in knowing precisely how it operates.

    Narc Subjecting Own Promoters To Embarrassment; Promoters, Company Blame It On Media

    Narc exposed its own Atlanta-area members and prospects to embarrassment after a Fox 5 reporter showed up to a pitchfest with a hidden camera and could not get answers even to basic questions, but the company has not issued a statement that addresses the concerns in any real way and is suggesting the media is to blame.

    No part of the Narc story is consistent with transparency or ordinary business practices — and the media attention likely is only now beginning. Viewers in Atlanta and Los Angeles — two of the largest markets in the United States — now have been treated to an appalling lack of professionalism in the MLM sphere, which only will fuel the public’s legitimate doubts about the industry as a whole.

    Why wouldn’t the public believe the Internet is just one giant cesspool after viewing the reports on Fox here and here? If you’re a Narc fan and want to argue that Narc was ambushed, you need to know that Narc had plenty of opportunities to answer questions from journalists before they started hiding their cameras. The PP Blog, for instance, has attempted to contact Narc multiple times. The Blog is aware that other news sites have met dead ends in bids to get Narc executives and knowledgeable employees to answer questions, including NBC-5 of Dallas-Fort Worth and others.

    The Fox 5 Atlanta report neatly exposed promoters’ willingness to cheer for a program, duck responsibility for their claims and then hide behind the skirt of a company when the heat became too intense.

    The trouble with hiding behind Narc’s skirt, however, was that the skirt provided no cover for members. Promoters found themselves in the awkward position of taking heat for a company that did not defend them in any credible way. Narc’s skirt provided no cover at all, and yet some members merrily continue to promote the opportunity and apparently see no incongruity at all.

    Let us spell it out: If you’re going to say the media must get answers from the company rather than promoters in the field, you are hiding behind the company’s skirt. And if the company does not provide the answers, you have no cover at all. This creates the appearance that the prospect of making money is the only thing you value. You certainly don’t value transparency if you’re hiding behind the company’s skirt, and the company certainly does not value transparency by ducking questions, avoiding them altogether or spinning things to create the appearance that the media are responsible for Narc’s lack of transparency.

    The media are not responsible for Narc’s bad press; Narc and its promoters are. One Narc promoter created a red banner on a .org site to create the appearance that sending money to Narc was like donating to the Red Cross. Other promoters appropriated the name of the AMBER Alert program to do the same thing on a .org website. At one point the message became so impossibly butchered that a promoter urged prospects to “Help AmberAlert and other organizations find repossessed cars.”

    Some Narc members made much ado about a TV anchor referring to Narc as a “job,” but dozens of Narc members posted ads on craigslist that advertised Narc as a job. Promos for Narc have been reprehensible. One member claimed Narc would be used to help the Department of Homeland Security find terrorists. Others claimed that the FBI and the AMBER Alert program endorsed Narc.

    These were blatant misrepresentations — plain and simple. If the MLM world wants the rest of the world to take it seriously, it has to quit serving up this slop and stop apologizing for its chefs and the seemingly mindless cheerleaders who cheer for the chefs even when roaches are swimming in the soup.

    In the AdSurfDaily case, for instance, the Secret Service said the chef served up a Ponzi scheme. How did the cheerleaders respond? They called the Secret Service, the agency that guards the President and the Treasury, Nazis and “Satan.”

    Now, amid a circumstance in which the BBB — one of America’s most recognized business organizations — has questioned whether the Narc chef is serving up a pyramid scheme that potentially affects tens of thousands of people, the cheerleaders are responding by trying to plant the seed that the BBB has a secret agenda and is infested with roaches. It is reprehensible — and it must not stand.

    Myriad questions about Narc remain, including these:

    Why are Narc promoters so willing to represent a company they know so little about?

    Does Narc not understand that vague, ambiguous claims on its own website and its apparent unease in addressing media questions are what’s driving the story?

    Why has a Narc PR spokesman not emerged to address media inquiries and become the face of the company? Why aren’t Narc executives stepping out in front of the cameras?

    Why have the statements Narc has issued not explained the incongruity of insisting that license-plate data is “public” information while at once insisting the public has no right to know who its clients are, how they are being screened, how data-gatherers are being screened and how the information is being indexed and sold?

    Why does Narc insist it has the right to collect your license-plate number and offer it for sale to a third party whose identity and motives are unknown to you?

    Why do tens of thousands of Americans suddenly seem so willing to waltz through parking lots of major retailers to record the plate numbers of their neighbors and to recruit others to do the same — when they have knowledge in advance that troubling questions are being asked about the firm?

    Why does the repo man suddenly need the help of a commission-hungry MLM army to dispossess people going through lean times?

    Any chance that the “buy here, pay here” car business and the title loan business are backing Narc because the industry’s practice of approving anyone for a loan actually is driving repos?

    Why are prospects so willing to hand over money when neither sponsors nor Narc itself are willing to provide information that could make the concerns go away?

    How many data clients does Narc have and when did the clients become clients? How much revenue do the data clients generate for Narc weekly and monthly?

    Is it possible that Narc is selling data to itself through a process in which it formed another company to become a Narc client or is relying on an alter ego of some sort or close association with another firm to create a client out of thin air?

    Is Narc closely connected to the “buy here, pay here” automobile business, meaning an entity with a close association with Narc is making high-risk, front-loaded, usurious loans to disadvantaged consumers?

    Is Narc closely connected to the title-loan and payday loan business?

    Is Narc closely connected to the repossession business?

    Does Narc have an investment angel? If so, what is the source of the money and was a private offering involved?

    Is Narc making pyramid or Ponzi-style payments to members?

    Narc promoter tells prospects the company was started to provide data to the Amber Alert system.

    Who are Narc’s executives beyond CEO William Forester?

    What are their names, job descriptions and backgrounds?

    Do they have high positions in the MLM organization and rely mostly or exclusively on commissions or do they draw a salary?

    Who are the members of Narc’s board of directors?

    Are police officers involved in Narc? If so, are they collecting information off-duty or on-duty — and are they complying with the policies of their departments and their cities in their efforts to increase their income?

    Promoters have claimed that Narc is authorized to verify license-plate data through the DMVs of all 50 states. Is that true? If so, is Narc able to view the names and addresses of vehicle owners and the makes and models of vehicles as police officers could do? If untrue, is Narc verifying the data entered by members through another process — for example, querying databases to determine if a plate number already is “taken” in a state and thus unavailable to any other party, and then concluding the plate is valid simply because it is unavailable to another party?

    Is is possible that police officers are querying restricted databases on Narc’s behalf?

    The parking lots of these famous companies are sources of license-plate data for Narc affiliates, according to a promoter. Whether any permission is required of store managers or motorists to record plate numbers for entry in a private, for-profit database is left to the imagination.

    Are police officers and nonpolice officers alike collecting scores of plate numbers and using their supplies as incentives for people to join Narc? (The PP Blog has observed multiple instances in which Narc sponsors suggested they would supply the first 10 plate numbers to incoming recruits, thus qualifying them for an immediate payment from Narc.)

    What part of the approach in the question above is consistent with an attempt to build a valid database, especially if Narc cannot verify that a “gift” plate number actually was viewed in a specific location by the recipient of the gift?

    Why has Narc not publicly and loudly renounced the practice of providing the “gift” of plate numbers to incoming prospects? Can Narc tell if entire downline groups are simply trading or recycling existing plate numbers among members and instructing members and prospects to fabricate an address where the plate was sighted?

    How can Narc possibly know if the cars members say were parked at a specific location actually were parked there?

    What specific event occurred that caused Narc to remove a reference to AMBER Alert in a video promotion and insert the name Code Amber instead?

    About Data Network Affiliates . . .

    We’ll close this essay by asking a few questions about Data Network Affiliates, Narc’s purported competitor in the business of collecting license-plate numbers:

    Is is possible that DNA saw that Narc’s new business of recruiting members to record license-plate numbers was resonating in the MLM universe? And did DNA then engage in a cynical ploy to build a customer base by incorporating Narc’s message — including references to law enforcement and AMBER Alert — simply because it was “working” for Narc?

    DNA declares "GAME OVER – WE WIN" repeatedly in a hype-filled email pitch to announce a $10 unlimited cell-phone plan. The company had been in the cell-phone business only days when it claimed to be able to beat virtually every other competitor on earth on cell-phone pricing. Only weeks later DNA claimed it had been hoodwinked into believing it could offer such a price, removing the offer and claiming to be excited about its future.

    DNA quickly backed away from emphasizing data collection after it observed Narc becoming the focus of critics who raised concerns about the propriety, safety and legality of Narc — and then DNA morphed into a sort of anti-Narc, saying it existed to help law enforcement only and would never share data with repo companies that wanted to take away cars owned by poor people.

    What follows are DNA’s own words (italics added):

    “DNA Affiliates STAY ALERT – They are watching out for their neighbors children. If DNA has 1 million affiliates that is 1,000,000 more people watching out for and caring about children world-wide.

    “Other companies may collect data to sell to REPO COMPANIES to take cars away from many people who are just down on their luck. A single mom, a dad out of work or 100 other good reasons why good people just can not make a payment. One DNA Affiliate just had his car repossessed because he owed 3 payments and offer to pay two of them and they said no and picked up his car.

    “DNA will have no part in such cases. At DNA we collect car data for one purpose and that purpose is that there is a small chance that this data in the right hands could help save a child or help prevent or solve a crime.

    “We do not boast of 6 figure contracts with REPO COMPANIES. At the end of the day a DNA Affiliate knows that what they are trying to do will only be a FORCE FOR GOOD in their community…”

    DNA also positioned itself as the “free” Narc, before springing a $127 upgrade on customers to purchase a data-entry tool that worked faster than the clunker provided the “free” members at no cost. Free members were not told they were getting a clunker until the upgrade program was announced. Before long, DNA announced it was in the cell-phone business — and plenty of other businesses willing to sell products to members who thought they were joining a “free” business.

    Could DNA’s approach be the most cynical, ribald effort in the entire history of MLM? And does the DNA braintrust not recognize that MLM has so many critics precisely because of the obnoxious and absurd approach of the man behind the green curtain and the men letting him get away with serving up ceaseless, hyperbolic slop?

    In our view, DNA is the worst example of wretched excess the MLM trade has ever served up — and Narc is close on its heels for enshrinement in the Hall of Shame. To be sure, Narc is not the next Google, DNA is not the next anything — and the industry has demonstrated once again that many, many of its members think that trite talk about arks is the same thing as building one.

  • SENIORS HARMED: Judge Issues Findings In CFTC Case Against Matthew B. Pizzolato; Says Investors Lost Retirement Savings In Scheme

    A Louisiania man charged criminally in an alleged Ponzi scheme and sued civilly on the same day last month lied to investors, some of whom liquidated retirement savings and annuities only to suffer massive losses by entrusting funds to Matthew B. Pizzolato, a federal judge has ruled.

    The case against Pizzolato is proceeding on separate tracks: a criminal prosecution by U.S. Attorney Jim Letten with the help of the FBI, the IRS, the U.S. Postal Inspection Service and the State of Louisiana Office of Financial Institutions, and a civil prosecution brought by the Commodity Futures Trading Commission.

    U.S. District Judge Mary Ann Vial Lemmon of the Eastern District of Louisiana now has extended an asset freeze, enjoined Pizzolato from breaking commodities laws and issued some findings in the civil case.

    Pizzolato is  26. He formerly resided in Tickfaw.

    Among Lemmon’s findings were that Pizzolato and his co-defendants in the civil case — William Guidry, 35, of Plano. Texas, and Jacksonville, Fla., and Capital Funding Consultants LLC of Covington, La. — ripped off senior citizens. Guidry and Capital Funding’s assets also have been frozen, and they have been enjoined from breaking the law.

    “Specifically, the order finds that Pizzolato, as part of a broader scheme in which he solicited $19.5 million, obtained more than $3.1 million from 24 mostly elderly investors, which he gave to Guidry to invest,” CFTC said.

    “Despite representing to these elderly investors that their funds would be invested in safe, secure investments with guaranteed rates of return, Pizzolato gave the funds to Guidry to trade high risk commodity futures, among other things,” CFTC continued. “The order also finds that Guidry and Capital Funding misappropriated more than $221,815.53 of investor funds for personal purposes, and used some of those misappropriated funds to trade commodity futures in accounts owned by Capital Funding. The investors were not told about Guidry’s commodity futures trading losses. The order further finds that Guidry and Capital Funding commingled commodity pool participants’ funds with the funds of other persons.”

    In the criminal case, which is being heard by U.S. District Judge Lance M. Africk, Pizzolato was charged with 52 counts of mail fraud, two counts of wire fraud, seven counts of money laundering, and single counts of securities fraud, obstruction of justice and witness tampering.

    He faces more than 1,100 years in prison and a fine of more than $16 million, if convicted on all counts. As many as 160 people were duped, prosecutors said.

    Prosecutors said Pizzolato attempted to silence employees with bribes of $20,000 and get them to destroy records to cover up the scheme. Meanwhile, they said Pizzolato obstructed justice by stealing documents that could incriminate him from the home of a client.

    Among the luxury items Pizzolato purchased with investors’ money were a BMW 750LI, a Mercedes Benz S430V, a Range Rover Sport and a Chevrolet Corvette, prosecutors said. He also bought sports tickets, a $35,000 engagement ring, a $500,000 home in Ponchatoula, La., and spent $35,000 on Carnival cruises.

    All in all, Pizzolato took about $19.5 million from clients and spent “nearly all” of it, prosecutors said.

  • BREAKING NEWS UPDATE: New Pro Se Motion To Intervene In ASD Case Lists Phone Number Associated With ASD Figure Nate Boyd

    UPDATED 5:16 P.M. EDT (U.S.A.) NOTE: After additional research, the 10-digit number cited below appears not to be a bank-account number. Rather, it appears to be a telephone number associated with Nate Boyd, a former compliance officer for AdSurfDaily. Boyd’s name also has been associated with the AdViewGlobal (AVG) autosurf.

    See the comments thread below.

    Here, our earlier story . . .

    A pro se motion to intervene just docketed in the AdSurfDaily civil-forfeiture case lists an “electronic transfer to” a bank account number (**Update 1:41 P.M. EDT: it’s actually a telephone number**) not listed in government references to accounts held by ASD President Andy Bowdoin.

    The filing lists the email address of nate@asdcashgenerator.com and a second account number that is associated with ASD in court filings. It was not immediately clear why the filing by Robert and Evelyn Gould included the account number not associated with Bowdoin in court filings. (**Update 1:41 P.M. EDT: it’s actually a telephone number**)

    An account number ending with the digits 1028 — an account number not associated with Bowdoin — is included in the Gould filing, along with the words “electronic transfer to” the account. (UPDATE 2:16 P.M. As noted in the 1:41 P.M. update, the 10-digit number is actually a phone number, as opposed to a bank-account number. The phone number is associated with Nate Boyd and a number of work-at-home opportunities.)

    Nate Boyd is a former compliance officer at ASD, members said. It was not immediately clear if the “nate” mentioned listed in the email address is Nate Boyd. (UPDATE 2:16 P.M. The phone number is associated with Nate Boyd.)

    Some ASD members have said some upline sponsors sold “ad-packs” directly to customers, as opposed to directing them to purchase them through ASD. “Ad-packs” then were transferred from the existing stockpiles of upline sponsors using ASD’s in-house system. The practice is problematic because some upline sponsors could have pocketed the cash, instead of transferring it to ASD, thus generating off-the-books cash sales.

    Such transactions could have transferred the burden of paying for ASD “rebates” to the rank-and-file membership, while destroying the reliability of ASD’s records and giving upline sponsors the opportunity to siphon tax-free profits.

    Actions by upline sponsors to sell “ad-packs” directly to customers could be construed as a form of wire fraud and money-laundering.

    Also unclear is why the Gould claim was filed using the same pro se template used by dozens of other ASD members. U.S. District Judge Rosemary Collyer already has rejected dozens of filings that used the same argument in the template.

    Collyer has not ruled on several templated submissions received after her initial ruling weeks ago that the filers had no standing in the case.

    The filing also referenced an account number ending in the digits 3016 that is associated with ASD.

    gouldinterventionsmall

    Federal prosecutors have listed 10 ASD account numbers in court filings, referencing them in the August 2008 forfeiture complaint and again in May 2009, in a proof of service of all defendants in rem. None of the account numbers ended with the digits 1028.

    Unlike previous pro se filings, the Gould motion included a printout of the government’s form for victims of AdSurfDaily, ASD Cash Generator, LaFuenteDinero and Golden Panda Ad Builder. Check marks on the Gould form are next to the names of AdSurfDaily and LaFuenteDinero. The form submitted to the court by the Goulds appears to have been printed out and filled out in longhand.

    The Gould filing suggests that Robert and Evelyn Gould filled out the government form last month, including the bank-account references.

    Despite the fact the government believes ASD engaged in a wire-fraud and money-laundering conspiracy with unnamed co-conspirators while operating as a Ponzi scheme, the Goulds said in the filing that the government owes them $2,000

  • Will Donald Trump Regret Linkage Of Name To MLM?

    EDITOR’S NOTE: This story was prompted by a post we saw on Scam.com. The “lede” is deliberately buried in this article in favor of some background information.

    During the 1990s, I was sitting at home one evening just minding my own business. Back in those days I routinely had staggered newspaper deadlines beginning at 7 p.m. and lasting perhaps through 9 p.m. I often covered an event for more than one publication. I was tasked with the duty to write unique stories for each publisher from the same fact set.

    If I’d spent the day covering a murder trial, for example, I could not submit duplicate stories to the publishers. They wanted individual stories tailored to their readership — stories that required me to present the information in the in-house styles of the publications. One of my key responsibilities was to write different “ledes” for the stories, an opening sentence or paragraph unique to the audiences and designed to grab readers’ attention and not let go.

    Getting it right the first time — which is to say, “grabbing” readers, including all the key facts and adopting the “voice” of the newspapers throughout the story — was my responsbility. Not doing it meant I’d spend the evening fielding calls from editors to fill in details, instead of enjoying the time with my girlfriend. She didn’t like it when editors called and perhaps disrupted the movie we were watching.

    I didn’t like it, either. So, I worked hard to ensure I’d lighten the work load on my editors, while lightening the load on myself and freeing up time to kick back.

    Editors, though, were not the only ones who called — and this brings us back to something that happened one night when I was just kicking back at home after finishing my work day.

    People occasionally would call me with news tips from the mundane to the incendiary and all places in between. On this particular evening I got a call on what I’d initially thought might be one of those “in between” things, but it was worth checking out immediately because the unemployed woman who called me was really worked up.

    I agreed to meet her in a hotel lobby to listen to her story. I soon discovered she wasn’t the only person worked up in the lobby of this hotel, which was situated in a county experiencing high joblessness and economic decay because manufacturing had gone into the tank locally.

    “What’s going on?” I asked.

    Some of the most forlorn-looking people you’d ever want to see quickly told me they’d been duped into attending a job “interview” by a prospective employer that had placed an ad and created the expectation it would hire workers for jobs that paid $30 an hour.

    Naturally the employer had no trouble filling the room in a town experiencing hardship.

    Before long, though, the event turned into a grimace-fest. Attendees thought the advertiser was recruiting them to work at a hospital after they received training in an emerging science that had something to do with making sure healthcare ecosystems were maintained.

    In reality, it was a pitch for an MLM of some sort that apparently specialized in sucking dust from the atmosphere of homes across America to keep the owners safe from microscopic allergens and pathogens that silently were killing them.

    Yes, the promoter had come to the struggling town to try to recruit a team of vacuum-cleaner salespeople. The sky was the limit.

    Except it wasn’t.

    The attendees told the promoter it wasn’t — in no uncertain terms. Later I covered a similar incident involving hearing aids at the same hotel. The key, from the promoters’ perspective, was to draw a crowd by using words to trigger emotions and plant a false idea, and then try to sell the desperate few who remained on the dream of MLM riches.

    Need and greed. Marry the two  — and return in your fancy car to your fashionable home in time to set sail in your fancy boat. When you need to replenish cash, take out another ad to sell a vacuum cleaner by calling it an ecology system. Replace the money you spent on cocktails and martinis and restocking the bar on your boat, and then head back to your fashionable home in your fancy car to set sail again on your fancy boat.

    And this brings us to Donald Trump, whom MLMers say has lent his name to a business opportunity.

    Someone posted about it on Scam.com, pointing out that MLM purveyors were pushing it on craigslist by referring to Trump as a “Billionaire, Real Estate Developer from NYC” who is “Opening a New Metabolic Testing Company” near Atlanta.

    Let’s hope the “Metabolic Testing Company” being pitched on craigslist in Atlanta by referencing Trump without mentioning his name is not the equivalent of the ecologically pleasing vacuum cleaner pitched to people who thought they were going to get an exciting, new career in the healthcare field in America’s Rust Belt.

    I’m not hopeful: The craigslist ad suggests compensation of “$30 to $50 per hour.”

    The post at scam.com appears not to link to a working craigslist URL.  Here is the the link I believe to be correct.

    Sorry about burying the “lede.”

  • NO AUTOSURF ENVY: Newspaper Circulation Plunges; Top Publications Hemorrhage Print Readers As Industry Looks To Harness Power Of Internet Advertising

    EDITOR’S NOTE: If you’ve been approached by individuals or a downline “team” and invited to join an online “surfing” program that purports to be an “advertising” company, this column may be of some value to you. Extremely well-known publishing companies — companies that produce titles you know and love, and companies that know advertising and business inside and out and through and through — are having trouble keeping readers’ eyes glued to print publications. Many of the famous companies have experienced serious revenue declines. Almost all of them have experienced spectacular print circulation declines even as actual readership was increasing. These famous companies are struggling to find ways to compete online and monetize their hugely popular websites, almost all of which get tremendous traffic.

    And yet none of them has turned to the so called “autosurf” model — even though the companies could crush “advertising” firms such as Florida-based AdSurfDaily, which is confronting allegations that it engaged in wire-fraud and money-laundering while operating a $100 million Ponzi scheme.

    Despite the fact these famous publishing companies have professional talent, audited readership, audited financials and the economies of scale to destroy so-called “advertising” firms such as ASD or BizAdSplash or AdViewGlobal — and scores of others — these companies do not position themselves against the surfs.

    Some of the surfs are collecting millions of dollars — if not tens or hundreds of millions of dollars — during a time the traditional publishing/advertising business is awash in a sea of red ink. All of the traditional companies could use the money autosurf participants are throwing at the surfs.

    Autosurf promoters would have you believe traditional publishing/advertising companies are struggling because the famous brands don’t understand the autosurf business model. Surf promoters position people such as ASD President Andy Bowdoin as vastly misunderstood geniuses and visionaries being picked on by the government. The surfs are positioned as cash cows for both the operators and members, and the “new” way to advertise.

    Promoters would have you believe that these celebrated publishing/advertising companies just don’t “get it” — and that the people promoting autosurfs in the hyped-up style of MLMs are the modern-day Henry Fords and Thomas Edisons — people who do get it.

    Surf promoters are unable to explain rationally why famous companies that could crush the surfs and take away all of their business — while delivering content that gives people a nonfinancial reason to visit highly professional sites and later share in hundreds of millions of dollars in revenue — have not leveraged their marketplace advantages and enormous volume of website traffic to make the companies and their readers rich by opening an autosurf.

    The reason is simple: The model as practiced in the so-called autosurf advertising “industry” is plainly illegal. It flouts securities laws, wire-fraud laws, mail-fraud laws, racketeering laws, banking laws, money-services laws and other laws — and the surfs try to sanitize it all by saying “rebates aren’t guaranteed,” which is just a contractual disclaimer designed to legalize theft.

    When reading the story below, keep in mind that each of the companies mentioned has advantages none of the surfs can offer, including some of the most highly talented writers, editors, designers and advertising-sales executives in the world — people who can deliver millions of eyeballs to websites and produce good results for advertisers both in product sales and branding.

    And yet these companies have not turned to Andy Bowdoin of ASD or Clarence Busby of BizAdSplash for guidance.

    Now, after this lengthy introduction, the story . . .

    Circulation at USA Today plunged 17.15 percent in the six-month period ending in September, compared to the same period in 2008, according to figures released today by the Audit Bureau of Circulations (ABC).

    Circulation losses experienced by the San Francisco Chronicle (-25.82 percent), the Star Ledger of Newark (-22.22 percent), the Dallas Morning News (-22.16 percent), the Boston Globe (-18.48 percent) and the New York Post (-18.77 percent) were even steeper, ABC reported.

    Elsewhere, the Houston Chronicle lost 14.24 percent of its print circulation during the period, and The Daily News (New York) lost 13.98 percent.

    Meanwhile, the Arizona Republic (-12.30 percent), the Cleveland Plain Dealer (-11.24 percent), the Los Angeles Times (-11.05 percent), the St. Petersburg (Florida) Times (-10.70 percent), the San Diego Union Tribune (-10.05 percent), the Chicago Tribune (-9.72 percent), the Detroit Free-Press (-9.56 percent) and the Pittsburgh Post-Gazette (-9.50 percent) also lost significant print circulation, ABC reported.

    The Post-Gazette explained today that much of its loss is attributable to an April decision to quit delivering the newspaper to certain outlying areas. The Post-Gazette says its website “remains the region’s most visited site.”

    Between the site and the print publication, the Post-Gazette reaches more than 1 million people every week, the newspaper reported.

    ABC’s numbers do not mean that actual readership of the publications is plunging. Many print-publishing companies have the dominant websites in their regions. And because the Internet has introduced the sort of immediacy once available only to TV and radio stations — and because print publications generally have larger news-gathering operations than their local competitors — the websites of newspapers and magazines have become enormously popular.

    What has not followed — at least not across the board — is an increase in revenues. Some famous print publications have declared bankruptcy, switched to an online-only model or a combination of online and print — or even folded.

    Print, in general, is struggling in every corner of the United States — and yet readership and reach never have been higher.

    Despite the advantages of readership, reach and talent pools autosurf companies only could dream about, there continues to be great stress in the worlds of publishing and advertising.

    No famous publishing house has adopted the autosurf model, even though promoters of the model would have would-be members/advertisers believe it is the magic cure.

  • ‘PROJECT CORONADO’: Feds Make 303 Arrests In Raid To Disrupt Mexican Cartel; Seize $3.4 Million In Cash, 109 Vehicles, 144 Weapons, 729 LB. Of Methamphetamine

    Display of some guns/drugs seized in Project Coronado: Source: DEA.
    Display of some guns/drugs seized in Project Coronado: Source: DEA.

    Federal agents, local police officers and prosecutors nationwide have carried out the largest action “ever undertaken against a Mexican drug cartel,” U.S. Attorney General Eric Holder announced.

    At least 303 individuals in 19 states were arrested in the past two days alone as part of Project Coronado. More than 3,000 agents and officers operated across the United States to make the arrests during the takedown, Holder said.

    During the two-day operation alone, $3.4 million in U.S. currency, 729 pounds of

    Display of methaamphetamine seized in Project Coronado: Source: DEA
    Display of methamphetamine seized in Project Coronado: Source: DEA

    methamphetamine, 62 kilograms of cocaine, 967 pounds of marijuana, 144 weapons and 109 vehicles were seized by law enforcement agents.

    Project Coronado has operated for 44 months, targeting the distribution network of a major Mexican drug-trafficking organization known as La Familia.

    La Familia is said to hold the belief that it is immoral to sell methamphetamine to Mexicans or for Mexicans to consume it, but it is acceptable to sell it to Americans for consumption. Mexican police say the cartel projects a “Robin Hood” image to locals, but engages in murderous rampages, including decapitations, to keep drug profits flowing.

    In July, the cartel reportedly killed 18 Mexican soliders or police officers, including 12 in a single attack. Corpses were left at a roadside to send a message.

    “The sheer level and depravity of violence that this cartel has exhibited far exceeds what we have, unfortunately, become accustomed to from other cartels,” Holder said. “La Familia operates primarily from the state of Michoacán, Mexico. However, as we’ve shown today, their operations stretch far into the United States. Indeed, while this cartel may operate from Mexico, the toxic reach of its operations extends to nearly every state in the country.”

    In Dallas, at least 77 arrests were made today as part of Operation Coronado. Arrests also were

    Display of money seized in Project Coronado: Source: DEA.
    Display of money seized in Project Coronado: Source: DEA.

    reported in the regions of Seattle, Boston, Atlanta, Los Angeles, Tampa, Raleigh, Minneapolis, Chicago, Detroit, Tulsa, Las Vegas, Kansas City, St. Louis and about two dozen other U.S. cities.

    Here are some 44-month totals posted by law enforcement in Project Coronado:

    • Total arrests: 1,186
    • Kilograms of Cocaine Seized: 1,999
    • Pounds of Methamphetamine Seized: 2,710
    • Pounds of Heroin Seized: 29
    • Pounds of Marijuana Seized: 16,390
    • U.S. Currency Seized: $32,795,000
    • Number of Vehicles Seized: 269
    • Number of Weapons Seized: 389
    • Number of Maritime Vessels Seized: 2

    “This unprecedented, coordinated U.S. law enforcement action — the largest ever undertaken against a Mexican drug cartel — has dealt a significant blow to La Familia’s supply chain of illegal drugs, weapons and cash flowing between Mexico and the United States,” Holder said.

    “We will not allow these cartels to operate unfettered in our country, and with the increases in cooperation between U.S. and Mexican authorities in recent years, we are taking the fight to our adversaries. We will continue to stand strong with our partners in Mexico as we work to disrupt and dismantle cartel operations on both sides of the border,” Holder said.

  • LETTER TO READERS: Senior Citizens, The Culture Of Ponzi Schemes — And America’s Longing For A Return To The Age Of ‘Blue Light’ Specials, The Age Of Innocence

    Dear Readers,

    From time to time I publish a post in letter form. This usually happens when a post in story, editorial or essay form does not seem appropriate. This is one of those times.

    Honestly, just how strange could things get in Ponzi Land?

    Ponzi Land, which relatively few people outside of law enforcement even knew existed a year ago,  suddenly and notoriously is populated by senior citizens — and not only as victims, but also as perpetrators.  So much of it seems upside down, a world that challenges assumptions.

    Are we entering a sort of awkward cross between a Lewis Carroll-like world and an Orwellian world, a world in which illogic passes for logic and, because news travels so quickly on the Internet and because negatives get spun so furiously as positives these days, bizarre crime gets positioned or explained away as a new form of nobility?

    Let’s take a look at today’s news on Ponzi schemes.

    Before we begin, did you notice the phrasing in the sentence above — today’s news on Ponzi schemes? Ponzi schemes are breaking out like Blue Light Specials broke out at the Kmart of my youth. Men and women whose hair is blue or tinting toward blue are running Ponzis — instead of doing recon in the aisles and waiting for the famous voice to intone, “Attention Kmart shoppers.

    It used to be that you made money by not spending it or shopping patiently and even furiously for the best possible deal, perhaps especially if you were a senior.

    Allegations now have emerged that Julia Ann Schmidt, the 68-year-old alleged Ponzi schemer from Texas, posed as an investment adviser using the name of Fortis Investments, a famous European brand with U.S. reach.

    Schmidt allegedly said she was working for a man named  “Jack Layne” — and when investors became skeptical, she hired a man to pretend to be “Jack Layne Jr.,” saying “Jack Layne” had died.

    The case is new, and few facts have emerged. But the allegations read as though Schmidt knew she was about to get caught, and called a meeting of investors, telling them that she was rolling over their investments into an insurance annuity. She allegedly brought the man pretending to be “Jack Layne Jr.” to the meeting, telling investors their money was safe because “Jack Layne Jr.” was handling “all the investor accounts through a local Waco law firm.”

    To add a false air of nobility to the alleged scheme, senior-citizen Schmidt put on a show for investors, prosecutors said.

    “In order to falsely lend credibility to the annuity transfer, [Schmidt] completed an application for her and her husband for the transfer of a non-existent sum of $500,000 from Fortis Investments to Life Insurance Company of the Southwest,” prosecutors said.

    For good measure, Schmidt “provided the false address for ‘Jack Layne’ and Fortis Investments where the annuity contracts and authorizations were to be mailed,” prosecutors said.

    The investment firm’s address proved to be a vacant parcel of land.

    So, if we’re reading this correctly, the alleged Schmidt plot involved:

    • A Ponzi scheme Schmidt pulled off by posing as an investment adviser for a prominent company that did not have a clue who she was.
    • Schmidt’s knowledge that her story and the scheme were collapsing.
    • An attempt by Schmidt to create plausible deniability by introducing “Jack Layne Jr.” and explaining that “Jack Layne” had died.
    • An attempt by Schmidt to sanitize the fraud and calm fears by explaining that “Jack Layne Jr.” was working with a “law firm.”
    • A subplot in which Schmidt further hoped to calm fears by creating nobility where none existed, saying investment accounts were being rolled over into an insurance annuity.
    • A false demonstration of nobility in which Schmidt pretended she was rolling over $500,000 into an insurance annuity.
    • Schmidt’s use of U.S. mail  in furtherance of a bizarre scheme to create nobility where none existed.

    Kmart, which dialed down Blue Light specials in the 1990s but still brings them back from time to time, needs to make them a fixture in stores again.

    Right away.

    Here is more news involving alleged senior Ponzi schemers or proven senior Ponzi schemers:

    In Buffalo, N.Y., Richard Piccoli, 83 — yes, 83 — was sentenced to 20 years in prison for recruiting Catholics and senior citizens into a Ponzi scheme he’d been operating since 1975. He’d managed to fleece investors out of as much as $25 million, leading to “devastating” consequences for the victims, prosecutors said.

    One of his victims said Piccoli had tried to turn the world upside down, putting on an air of nobility and youthful vigor when he was selling the scheme, but expecting the dignity and respect normally accorded a frail, 83-year-old man after the scheme was exposed.

    “He wanted to reverse his age when he wanted us as victims,” a woman told WGRZ-TV. “And now, he’s like, saying just the opposite: ‘Oh, I’m too old to be punished.’ So, you know, he worked his age in his own favor.”

    Piccoli ultimately cooperated with investigators — in no small part because the evidence was overwhelming. Authorities had cataloged ads he had placed in Catholic newspapers and publications. The ads, which promised a payout, specifically targeted seniors and people of faith.

    An undercover agent from the U.S. Postal Inspection Service, which had worked with the IRS to target Piccoli in a sting, posed as a man seeking to invest money for his aging mother.

    Piccoli, always looking for senior-citizen marks even in his 80s and trading for decades on the noble names of Catholic priests and churches, was happy to oblige.

    The churches were getting a 3 percent return on investments in safe institutions. Piccoli told them he could get 7 percent and provided a guarantee, reportedly even saying the investments were tax-free. This was music to the ears of churches and parishioners who’d watched a consolidation of Catholic entities across the United States that had resulted in the closure of schools and churches, owing to a lack of resources.

    “During one taped conversation, Piccoli promised the investigator ‘we can make a hell of a profit,’ and boasted that his list of clients included at least 50 priests,” The Buffalo News reported.

    Piccoli’s attorney asked for a sentence of six years. A federal judge said such a light sentence would not reflect the severity of a crime that involved tens of millions of dollars and as many as 500 victims over the years, and sent Piccoli to prison for 20 years — effectively a life sentence.

    In the end, justice was served, including justice for a 79-year-old man Piccoli had fleeced. The man said he suffered a heart attack after news of Piccoli’s arrest broke last winter. Authorities, acting swiftly after Piccoli’s name had been brought to their attention and an investigation began, recognized almost instantly that he had been operating a Ponzi scheme for decades.

    They froze the crime in its tracks, trapping $6 million that still remained. Piccoli had gathered at least $500,000 in November 2008 alone, and at least $16 million since 2007, depositing the money and writing checks to earlier investors as money came in from new investors. He promised a payout of between 7.1 percent and 8.3 percent, but had been insolvent for years — and owed unsuspecting clients up to $25 million.

    Piccoli’s attorney — doing what attorneys are paid to do — pointed out that Piccoli had cooperated after getting caught, a sort of last shot at nobility. The attorney criticized neither the judge who sentenced his elderly client to 20 years nor the prosecutors who brought the case.

    Judith Zabalaoui, 71, was accused in February of swindling Greater New Orleans investors out of more than $3.2 million in an elaborate Ponzi fraud in which she set up fake companies, pretended to have employees and called her mailboxes at UPS stores “suites” to trick clients into thinking they were dealing with real firms. In August, she was sentenced to eight years in prison.

    Zabalaoui became emotional in the courtroom at her sentencing, explaining that she had committed crimes because she wanted her family to live well and had a predisposition for over-protecting her loved ones.

    Her victims cried — not for her, but for themselves.

    Elsewhere, in reports about the Bernard Madoff Ponzi scheme published yesterday, Madoff was said to have sponsored cocaine parties at his securities company.

    Madoff, 71, was sentenced in June to 150 years in prison. His Ponzi wiped out personal, charitable and corporate fortunes. An attorney with whom Madoff granted a prison interview — the same attorney now is suing Madoff and others — said Madoff  “spends time” in prison with a Mafia crime boss and a convicted spy. The attorney claimed Madoff enjoys pizza cooked by a child molester.

    Madoff told the FBI he had acted alone in the $65 billion swindle. No one believes that, not the FBI, not the attorney who is suing him.

    Bernard Madoff was not the sort of customer who performed recon in the aisles at Kmart and spent extra time in the store, hoping to be there when the famous Blue Light flashed.

    Regardless, Kmart can’t bring back the Blue Light Special for Americans of average or noble means fast enough. America needs the Blue Light Special, if for no other reason than to signal that Lewis Carroll and George Orwell wrote fiction, that the world is not upside down, that the Age of Innocence has returned.

    Let’s just hope it’s not the Age of Innocence described in Edith Wharton’s Pulitzer Prize-winning novel — and that an age of innocence truly once existed and is worth going back to to seek a cure for what ails us now.

    Patrick

    P.S. You’ve noticed, of course, that it has become increasingly fashionable to claim nobility and to blame the government if you get named in a Ponzi prosecution or a prosecution that alleges fraud in general. We have been reporting on the fraud allegations against Affiliate Strategies Inc. (ASI), the umbrella company under which the Noobing autosurf set up shop. Noobing targeted deaf people.

    On Sept. 4, an unnamed party issued a news release with this bold headline:

    “FTC on Rampage! Are they really out to help the Consumers or out to raise money?”

    Among the assertions in the news release, which apparently was a third-party bid to position ASI and other companies as noble enterprises, was this:

    “During our investigation of the tactics used by the FTC we wanted to see how the process was done to protect the consumer and the procedures they had to follow to prove that consumers were being harmed. To our amazement the FTC does not have to follow the law of the Constitution, and there is no Due process given to those that they claim are harming the public.”

    The claim was made despite the fact the civil prosecution against ASI is occurring in a federal court under the watchful eye of a federal judge to ensure fairness for all parties — alleged perpetrators and alleged victims.

    Federal investigators were described in the news release as “The “NEW AGED MAFIA.” The FTC was described as extorting “money from companies all across the country” in a bid to raise money “for the states that join them in the law suits.”

    In late August, the court-appointed receiver in the case against ASI said an affiliated company named a defendant in the prosecution charged a 70-year-old Philadelphia man on Social Security $995 for the names and addresses of three entities that possibly could help him secure a grant to repair his deteriorating home.

    One of the addresses proved to be the address of the Philadelphia Regional Office of the U.S. Department of Housing and Urban Development, which had been misidentified as a benevolent organization known as “World Changers,” according to court filings.

    The companies named defendants in the FTC lawsuit were insolvent “and had less than one day’s operating cash requirements in their bank accounts,” according to the receiver.

    “The Receiver’s work over the past three weeks suggests the Defendants’ operations were insolvent on the date [July 24] the [Temporary Restraining Order] was entered and that for at least all of 2009, Defendants operated only by signing up new victims faster than the old victims could obtain refunds,” the receiver said.