From a Zhunrize slide as viewed through Open Office. Red highlight by PP Blog.
2ND UPDATE 5:25 P.M. EDT U.S.A. Purported “Plans B” are one of the core signatures of the the MLM HYIP sphere, which is known for incredibly toxic global frauds such as Zeek Rewards and AdSurfDaily. In 2009, an ASD reload scam known as AdViewGlobal was positioned as a “Plan B.”
The individual schemes of Zeek and ASD took in a combined sum of at least $969 million. AdViewGlobal appears to have disappeared with millions of dollars — after targeting ASD victims for a second time.
Laggos’ listeners were told that, if things went south at Zeek, Lyoness would be an excellent hedge through which $10,000 directed at the scheme might return “a quarter-million dollars.”
“Plan B” also is known as “Don’t put all your eggs in one basket.” HYIP prospects often are told to join more than one scheme or to quickly get in another if something goes wrong with the current scheme, sometimes known as “Plan A.”
Plan B schemes typically are a means by which prospects are lured into a continuous cycle of MLM frauds. Zeek and OneX promoter T. LeMont Silver later went on to “Plan B” schemes such as GoFunPlaces/GoFunRewards and JubiMax/JubiRev. Those schemes cratered or encountered difficulties. Silver now is pushing the exceptionally murky BitClub Network “opportunity” as a Plan B.
MLM HYIP schemes may switch forms. They may appear as straight-line investment-fraud schemes such as Legisi, which collapsed after an SEC intervention in 2008. ASD was an “autosurf advertising” scheme that collapsed in 2008 after an intervention by the U.S. Secret Service. Zeek, a purported “penny auction” company, collapsed in 2012 after an SEC intervention.
The trend now appears to be to wrap traditional products such as cosmetics and diet shakes into murky and confusing schemes that pay recruitment commissions. No specific payout may be mentioned.
The phrase “Plan B” even appears in promo material for Zhunrize. The material also references Plan A. Based on this information, it appears as though Zhunrize was touting itself as both a “Plan A” and “Plan B” scheme.
“Do you know anyone who would like to develop a plan ‘A’ Or plan ‘B’?” the Zhunrize promo queries.
In the promo, Zhunrize prospects are told they can earn “thousands each month by helping others to save time, gas, money and avoiding crowds.”
One of the problems in this bizarre sphere of MLM is that tainted money from earlier scams may flow into emerging scams, in effect making banks and payment vendors warehouses for a continuous stream of fraud proceeds that flow between and among pyramid schemes and Ponzi schemes.
Like Lyoness, Zhunrize is involved in the shopping-portal business. Like Zeek and other “programs,” Zhunrize also was positioned as a “profit-sharing” or “revenue-sharing” opportunity.
Case files associated with various recent HYIP/revenue-sharing schemes put losses in the billions of dollars. Because some promoters simply move from one scam to another, they are eviscerating wealth on a global scale.
If someone pitches you on an MLM “Plan B,” run like the wind.
BULLETIN: (Updated 2:35 p.m. EDT U.S.A. Aug. 29) Lyoness, the purported “Plan B” scheme of Zeek Rewards and AdSurfDaily figure Keith Laggos, has been charged in Australia with operating a pyramid scheme.
News of the Australian prosecution was published tonight by BehindMLM.com.
The Australian Competition and Consumer Commission has instituted proceedings against Lyoness International AG, Lyoness Asia Limited, Lyoness UK Limited and Lyoness Australia Pty Limited (together ‘Lyoness’) for operating a pyramid selling scheme and engaging in referral selling.
Although Lyoness has been investigated by regulators for conduct in other countries, this is the first court action taken against Lyoness alleging that the Lyoness Loyalty Program constitutes a pyramid scheme.
Pyramid schemes involve new participants providing a financial or other benefit to other existing participants in the scheme. New participants are induced to join substantially by the prospect that they will be entitled to benefits relating to the recruitment of further new participants. Pyramid schemes may also offer products or services, but making money out of recruitment is their main aim, and often the only way for a member to recover any money is to convince other people to join up. In contrast, people in legitimate multi-level marketing schemes earn money by selling genuine products to consumers, not from the recruiting process.
The ACCC alleges that Lyoness has operated the scheme in Australia from mid-2011 and that it continues to operate the scheme. The scheme offers ‘cash back’ rebates to members who shop through a Lyoness portal, use Lyoness vouchers or present their Lyoness card at certain retailers.
Whilst cash back offers themselves are not prohibited by the Australian Consumer Law (ACL), the ACCC alleges that the Lyoness scheme also offers commissions to members who recruit new members who make a down payment on future shopping.
“Pyramid schemes are often sophisticated and may be operated under the guise of a legitimate business. Although these schemes can appear to be legitimate, the most significant inducement for new members to get involved is to earn ‘residual’ or ‘passive’ income from new members signing up,” ACCC Chairman Rod Sims said.
“The concern with pyramid schemes is that the financial benefits held out to induce potential members to join up rely substantially on the recruitment of further new members into the scheme. For these schemes to work so that everyone can make a profit, there would need to be an endless supply of new members.”
“Under the Australian Consumer Law, it is illegal not only to establish or promote a pyramid scheme, but also to participate in one in any capacity,” Mr Sims said.
The ACCC also alleges that the conduct by Lyoness breached the ACL prohibition on ‘referral selling’, where a consumer is induced to buy goods or services by the promise of a commission or rebate contingent on a later event.
The ACCC is seeking declarations, pecuniary penalties, injunctions, an order requiring the Lyoness website to link to the case report and costs.
As Lyoness International AG, Lyoness Asia Limited and Lyoness UK Limited are located overseas, the ACCC will be making arrangements for service on those entities.
The first Directions Hearing in these proceedings will be at 9.30am on 16 September, 2014 before Justice Flick in Sydney.
Laggos pushed Lyoness as a “Plan B” to members of Zeek Rewards, suggesting in 2012 that it could be used as a “passive” hedge in case things went south at Zeek. Indeed, things did go south at Zeek: The U.S. Securities and Exchange Commission (SEC) described it as an international Ponzi- and pyramid scheme that had gathered hundreds of millions of dollars while engaging in securities fraud and selling unregistered securities as investment contracts.
Among the tips Laggos provided Zeekers on a Lyoness conference call was this: “Don’t put no more than 70 percent back in [Zeek]. Take out 20 or 30 percent [on] a daily basis. [Unintelligible.] This would be a good place. But, by the same token, if you put $10,000 in Zeekler, if nothing happens over the next year, you’ll probably make $30,000 or $40,000, if that’s all you do without building the front end, the matrix . . . The same amount of money in Lyoness, you’re looking . . . and not doing anything else, without single sponsoring . . . you can probably make a quarter-million dollars.”
News of the Lyoness action in Australia was received on the same day that TelexFree was squaring off against both the SEC and federal prosecutors in Boston over matters pertaining to scheduling. TelexFree was charged by the SEC in April 2014 with operating a massive Ponzi- and pyramid scheme. The agency had charged Zeek less than two years earlier
TelexFree figures James Merrill and Carlos Wanzeler were indicted in July 2014 on criminal charges of wire fraud and wire-fraud conspiracy.
Lawyers from both sides are battling over contentious issues such as whether the SEC’s civil case should be stayed (delayed indefinitely) in favor of the criminal case and whether Merrill can receive a speedy, fair trial on the criminal side of things.
An enormous amount of evidence remains to be sifted through by both sides.
“The United States Attorney’s office has contacted the parties indicating that it intends to seek a stay of these proceedings while the criminal case is pending and sought assent from the parties,” the SEC and defense attorneys said in a joint filing in the agency’s civil case today. “The parties have not unanimously assented to a stay.”
On the criminal side of things, Merrill contended today that his right to a fair trial would be put at risk if prosecutors were permitted to use “additional press releases and newspaper notices” to contact potential TelexFree victims.
“Every press release and/or newspaper notice issued by the government will likely repeat the government’s characterization of TelexFree and Mr. Merrill” as a pyramid scheme and a pyramid schemer, Merrill attorney Robert Goldstein contended.
And, Goldstein argued, “Mr. Merrill hereby respectfully opposes the government’s motion for complex case designation and exclusion of time . . . wherein the government seeks the exclusion of 90 days commencing on September 10, 2014, and instead respectfully asks the Court to defer a ruling regarding the exclusion of any time until the September 10, 2014 status conference (i.e., after the defense has had at least a minimal amount of time to review the government’s automatic discovery production, which was received today.”
Among other things, prosecutors contended that “evidence underlying this case is closely tied to certain foreign countries, especially Brazil” and that “it is likely that the parties will need to review evidence in foreign countries and arrange for foreign witnesses and/or law enforcement officers to travel to the United States to testify at trial.”
Schemes that operate over the Internet may grow to affect hundreds of thousands of people. Cases can become extremely complex if a pyramid or Ponzi scheme (or both) are alleged.
Regulators have warned for years that the schemes may use intricate disguises and exceptionally complex mechanics to ward off prosecutions. Cross-border schemes can pose monumental challenges to law enforcement.
Florida “Expat” and Zeek Rewards Ponzi-scheme figure T. LeMont Silver yuks it up earlier this year in the Dominican Republic. Source: YouTube.
MLM, witness your latest PR train wreck — as voiced by alleged Zeek “winner” and purported “revenue sharing” consultant/trainer and Florida “Expat” T. LeMont Silver. (Video below.)
In a consolidated motion in response to motions by various alleged Zeek “winners” to dismiss the clawback lawsuits against them, the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid case has asked the court to take “judicial notice” of two YouTube videos featuring Silver, a veteran HYIP huckster.
In typical HYIP fashion that marries the merely imponderable to the truly bizarre, one of them painfully is titled, “(T. Le Mont Silver, Sr.), (7 Figure Producer) shares about Plan B part #2.” (Bold emphasis added by PP Blog.)
The HYIP sphere, the staging waters for boat sharks who throw purported rescue jackets to victims bloodied in the water from earlier scams and desperately struggling to stay afloat, is infamous for Plans B.
Although the “program” isn’t identified in the video, Silver’s Plan B appears to be the ill-fated JubiRev/JubiMax. (See June 18, 2013, BehindMLM.com story.)
MLM may have a problem with “serial participants” in Zeek-like schemes to defraud, Zeek receiver Kenneth D. Bell suggests in the motion asking the court to take judicial notice of the Silver videos.
The language chosen by the receiver is similar to language the SEC used in 2013 to describe MLM HYIP huckster Matthew John Gagnon. Gagnon, the SEC said at the time, was a “serial fraudster.”
The context of the SEC’s Gagnon prosecution may be important. Indeed, one of the “programs” he was accused of promoting was the infamous Legisi scheme, a semi-offshore debacle the SEC took down in 2008. Like Zeek, the Legisi case started with asset freezes and the appointment of a receiver.
Time slowly marched on. But in 2009, the receiver sued Gagnon. In 2010, the SEC filed civil charges against him. He was charged criminally in 2011.
Legisi, the SEC said, operated a “classic pooled investment vehicle.” In one of the Silver videos cited by the receiver, Silver describes his “Plan B” program as the operator of a “pot.”
Women between the ages of 30 and 55 were the financial targets of the “opportunity,” according to one of the videos referenced by Bell.
The video tends to suggest that Silver understood how Zeek got caught by using highly questionable “bids” as its “product” and that the MLM’s trade’s serial fraud wing immediately sought more clever disguises — hiding an HYIP scam behind the purported sale of ostensibly legitimate products such as cosmetics and diet shakes, for instance.
Silver has appeared in “many” online videos and has promoted “several ‘revenue sharing’ schemes in addition to Zeek,” receiver Kenneth D. Bell advised Senior U.S. District Judge Graham C. Mullen.
Bell supplied the court links to the videos.
In the HYIP sphere, the term “revenue sharing” is used to make schemes appear to be innocuous.
As noted above, the HYIP sphere is infamous for purported Plans B, which typically are cosmetically tweaked reload schemes designed to fleece an initial group of marks for a second time.
Here, it’s appropriate to revisit HYIP history for a second time. If you believe AdSurfDaily Ponzi schemer Andy Bowdoin caused an almost inconceivable amount of PR damage to the MLM trade by comparing the U.S. Secret Service to “Satan” and the 9/11 terrorists, wait until you get a load of what T. LeMont Silver does in one of his videos cited by the receiver. (Video appears at bottom of this column.)
By way of background, the HYIP sphere is infamous for dropping the names of famous entities and people, even if they have no ties whatsoever to the “opportunity” being presented.
Although Silver apparently isn’t selling Avon or Amway or Mary Kay or Herbalife or ViSalus in the video, he drops the names of all of them (and more). Along the way he drops in a veiled reference to Zeek, describing it as a penny auction “program” in which affiliates would “make large purchases of . . . let’s say ‘bids’,” with Zeek’s product creating a “big issue” with regulators.
Silver notes that he’ll provide “training” for the upstart “program,” positioning it as a way for average MLMers to make money without having to recruit or to orchestrate “dog and pony” presentations. Regardless, Silver assures the audience that he’s a master of the MLM dog and pony. He further suggests that, because Zeek’s “bids” had caught the attention of regulators, the trade’s braintrust now is turning toward “more traditional MLM-type products and services.”
Putting lipstick on brand-new HYIP pigs or evolving ones is part and parcel to the HYIP sphere. Silver’s video suggests that the HYIP trade has learned that sketchy products such as Zeek’s bids might not fly and now was concentrating on attracting women between the ages of 30 and 55 by wrapping cosmetics, weight-loss shakes, home products and travel into a purported “revenue sharing” model in which participants who bought in would receive “pro rata” shares from a giant revenue pot.
After suggesting he has inside information about the new HYIP regime, Silver curiously observes that he is “very, very key on genealogical integrity.” We interpret this to mean that he’d be exceptionally pleased if people with existing MLM organizations within traditional companies would port them into his next scam.
Even though he’s apparently not selling Amway in the video, he bizarrely also prompts viewers not to dare “call Amway Scamway.” Equally bizarrely, Silver congratulates the company for “legitimizing this industry” back in the 1970s by purportedly “kick[ing] the backside” of the U.S. government and the government’s “[p]atootie.”
“My goodness,” he says. “Thank you, Amway.”
Yes. T. LeMont Silver has now publicly thanked Amway for kicking the government’s ass 35 years ago and, under his interpretation of In the Matter of Amway Corporation, Inc., et al., paving the way for people to send tremendous sums of money to companies with presumptively better disguises than Zeek.
Amway is a lot of things — good and bad — to a lot of people. Unlike Zeek, however, it is not an HYIP that offered “passive” investors who sent in $10,000 or smaller sums a laugh-out-loud, average daily return of 1.5 percent, basically in perpetuity.
Gawd!
Our take on Silver’s take of the 1979 non-HYIP Amway decision is that it somehow made preposterous “revenue sharing programs” as seen in the HYIP sphere lawful or that all HYIP schemes are lawful if they have product such as those offered by Avon, Amway, Herbalife and the others. But the pyramid analysis, of course, does not exclusively hinge on whether a company has a “product.” If it did, Zeek (“bids”) and BurnLounge (“music”) would still be in business. Moreover, there would be no Bill Ackman/Herbalife dichotomy, no question about whether Herbalife was Jurassic Park or Disneyland. In short, MLM heaven on earth would not be a rumor, it would be a reality.
“Plan B,” meanwhile, is a virtual calling card of HYIP swindles, with prospects typically given instructions to join at least two “programs” in case one of them fails or to quickly join another “program” when a favored one collapses or encounters regulatory scrutiny.
Silver is a longtime pusher of “Plan B” MLM HYIPs, which, as noted above, typically call themselves “revenue sharing programs.” He’s hardly alone. Zeek figure and purported MLM expert Keith Laggos pushed the Lyoness “program” to Zeekers as a “Plan B” just prior to the Aug. 17, 2012, collapse of Zeek. (See Aug. 12, 2012, PP Blog editorial: “Karl Wallenda Wouldn’t Do Zeek.”)
Lyoness, among other things, dropped the name of Nelson Mandela in sales promos.
Among the tips Laggos provided to listeners of a Lyoness conference call was this: “Don’t put no more than 70 percent back in [Zeek]. Take out 20 or 30 percent [on] a daily basis. [Unintelligible.] This would be a good place. But, by the same token, if you put $10,000 in Zeekler, if nothing happens over the next year, you’ll probably make $30,000 or $40,000, if that’s all you do without building the front end, the matrix . . . The same amount of money in Lyoness, you’re looking . . . and not doing anything else, without single sponsoring . . . you can probably make a quarter-million dollars.”
One of the problems with HYIP schemes is that they cause polluted money to flow between and among scams, in part because the scams have serial promoters in common. The inevitable result is that payment vendors become warehouses for fraud proceeds, prompting the government to apply for asset freezes and account seizures to stop the flow of tainted cash.
Receiver Cites Second Silver Video
The second video featuring Silver — an alleged winner of more than $1.71 million in Zeek — is titled “Internet Entreprenuer Family Chooses Cabrera [Dominican Republic] For Their New Expat Lifestyle.” It shows Silver and his wife — another alleged Zeek winner — lounging in the Dominican Republic after the collapse of the Zeek scheme.
Prior to relocating to the Dominican Republic, Silver told his downline in a failed MLM “program” known as GoFunPlaces to take advantage of “low-hanging fruit” (other disaffected GoFunPlaces members) and become recruiters for a “program” known as Jubimax. The “programs” ultimately accused each other of fraud.
Silver also promoted “OneX,” which federal prosecutors in the District of Columbia described as an AdSurfDaily-like, money-circulating scheme. ASD operator Andy Bowdoin, now jailed after the collapse of the ASD fraud in 2008, also promoted OneX, explaining to prospects that they’d earn $99,000 very quickly and that he’d use the money he’d earned to pay for his criminal defense in the ASD case.
Bowdoin asserted OneX was great for college students. Silver asserted that positions being given away were worth $5,000.
Prosecutors also linked Bowdoin to AdViewGlobal, an ASD reload scam that operated as a “Plan B.” AdViewGlobal, which purported to operate offshore but actually was operating from Florida and Arizona, mysteriously vanished in the summer of 2009.
Zeek receiver Bell, who connected alleged Zeek winner Todd Disner to the ASD Ponzi scheme in court filings this week, now says in court filings that certain Zeek clawback defendants “may well be serial participants in these types of schemes.”
One of the things that makes Zeek-related litigation unique in the history of actions flowing from HYIP schemes is that Bell is not limiting his lawsuits to a relatively small universe of alleged major winners such as Silver. In a proposed class action, he’s also pursuing more than 9,000 alleged winners of smaller sums (more than $1,000 but less than $900,000), something that could have a long-needed chilling effect on serial promoters who may enter an HYIP Ponzi knowingly but less publicly.
Some early HYIP Ponzi entrants may recruit heavily at first and be satisfied with smaller sums, because the larger plan is to get out quickly on the theory smaller winners won’t be pursued.
Regulators have warned for years about the online phenomenon of “riding the Ponzi.”
Paul Darby with “President Obama,” apparently on Inauguration Day in 2009 after the U.S. Secret Service infomed the MLM world through the filing of the AdSurfDaily Ponzi case that trading on the name and image of the President of the United States might not be a good idea.
UPDATED 8:37 A.M. EDT (OCT. 21, U.S.A.) Former AdSurfDaily President Andy Bowdoin is continuing to serve 78 months in federal prison at the age of 78 — in part because he borrowed liberally from the MLM scammer’s playbook and planted the seed that the President of the United States (then George W. Bush) backed his “program.” Some MLM prospects joined the ASD fraud scheme — a $119 million Ponzi popularized in part on the Ponzi boards and broken up by the U.S. Secret Service in 2008 — based on pitches highlighting Bowdoin’s purported ties to the White House.
Bush left office on Jan. 20, 2009. Barack Obama then became President.
Records now strongly suggest that Obama was President for only minutes when he became an unwitting salesman for an MLM or affiliate scheme. Indeed, an online pitch featuring “Obama” is dated Jan. 20, 2009, Inauguration Day in the United States and the date upon which Obama took over from Bush.
A Blog on Google’s free Blogspot platform made this headline claim on Jan. 20, 2009: “Barack Obama visits Unimax Services.”
The Blog, which remains online well into Obama’s second term that began on Jan. 20 of this year, features a knockoff of the Seal of the President of the United States. “Presidents Club,” it screams. Recruits for a “program” known as Net Millionaires Club apparently were accorded the title of Presidents — not of the United States, but of the “Unimax States.”
This is straight out of MLM or affiliate scheme La-La Land.
Paul Darby, who describes himself as “President of the Unimax Services Corporation” on the Blogspot site with the “Barack Obama visits Unimax Services” headline, is featured alongside a cardboard cutout of Obama in a video playing on the site. In the bizarre video, Darby bizarrely describes the cutout of Obama as the “featured guest” and suggests the Net Millionaries Club he’s promoting with the knockoff of the U.S. Presidential Seal is an “economic stimulus package.”
If you don’t go any farther than the headline — if you don’t take the time to view the video showing the Obama cutout — you could reasonably conclude that Obama actually visited Unimax Services and endorsed the “program.” Put another way, it’s a contemptible, backdoor way to use the Internet to turn the White House and the Commander-in-Chief into a spokesman for a highly dubious MLM or affiliate scheme.
If all of this seems altogether too much, altogether too bizarre, consider that the Secret Service, through the filing of the ASD Ponzi case in 2008, informed the MLM world that it wasn’t a good idea to go around trying to tie the President of the United States to your scheme. Next consider that the ASD scheme had its own form of a Darby-like Net Millionaries Club; the ASD version was multipronged and was called the “President’s Circle,” the “President’s Advisory Board” and “President’s Advisory Counsel.” Then consider that the Darby Blog — in January 2009, months after the ASD case had been filed — led with the “Barack Obama visits Unimax Services” headline on the date the President was inaugurated.
Did the President of the United States really visit Unimax Services, purveyors of the Net Millionaires Club? And did the White House somehow give Darby permission to alter the Seal of the President of the United States as a means of driving traffic to the “program? Did Paul Darby learn nothing from the ASD case?
But it gets worse . . .
Flash forward to 2013 (while considering that MLM schemes such as BidsThatGive and Lyoness also have tried to tie themselves to the U.S. Presidency or the Presidency of other countries), and you’ll find Darby as the braintrust behind yet another “program.” This one is called “YouGetPaidFast.”
Like ASD before it, YouGetPaidFast has a presence on the Ponzi boards. The new “program” appears to be a cash-gifting scheme. Ponzi-forum pitchman “Ken Russo,” previously of the ASD Ponzi scheme, the GNI and NewGNI Ponzi schemes, the Zeek Rewards Ponzi scheme, the MPB Today pyramid scheme, the Club Asteria fraud scheme and the Profitable Sunrise fraud scheme, is helping lead the YouGetPaidFast charge.
“Ken Russo” appears even to have coined a new acronym to deflect attention away from the critical issues surrounding online fraud schemes. Critics, according to a post attributed to “Ken Russo” at the MoneyMakerGroup Ponzi forum, are “NAG[s].” NAG stands for “Naysayers Anonymous Group.”
According to “Ken Russo,” in apparent defense of YouGetPaidFast (italics added):
“The NAG (Naysayers Anonymous Group) are doing their best to deter you from joining an excellent program which offers one of the best opportunities I have ever seen for average folks to develop a substantial additional income stream. The NAG is relentless in their efforts to denigrate this fine program . . .”
This is occurring after the United States charged three women criminally in Connecticut for pushing a cash-gifting pyramid scheme. Two of the three women were sentenced earlier this year to lengthy terms in federal prison.
It also is occurring against the backdrop of bids earlier this year by enthusiasts of other Ponzi-board “programs” to trade on images of Obama and the prestige of the U.S. Presidency. Those “programs” included Empower Network and “Ultimate Power Profits.”
Unlike his Net Millionaires Club scheme, however, Darby’s YouGetPaidFast scheme appears no longer to be interested in trading on the name of the President of the United States and the seal of the President of the United States.
No, this time Darby is planting the seed that the FBI backs his “program.”
Darby is trotting out some of the same sort of MLM La-La Land talking points advanced by self-styled Zeek Rewards consultant Robert Craddock — that is, if you speak out against a “program,” you’re going to get sued and perhaps even paid a visit by its backers in law enforcement.
As BehindMLM.com is reporting today, Darby now claims to have FBI agents on “speed dial.” And at least one of those agents purportedly has vetted YouGetPaidFast and given it the all-clear.
Beyond that, according to the BehindMLM.com report, one or more Christian pastors is encouraging Darby to sue his detractors.
If that seems altogether too odd, consider that purported Christian pastors also are backing Empower Network and its purported “Badass” content, including the reported death by suicide of a top Herbalife MLM distributor.
David Wood, one of the top dogs at Empower Network, once advised critics to “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.”
Whether Wood lost any pastors after the remark is unclear. At least one purported pastor encouraged Empower Network affiliates to overlook the nasty language and simply concentrate on making money. Pastors also backed the ASD Ponzi scheme and the Profitable Sunrise scheme — to cite just two of the MLM fraud schemes that recently have fleeced people of faith. ASD’s Bowdoin, before becoming a pitchman for a scheme known as OneX, once described himself as a Christian “money magnet.”
There is plenty of God talk in YouGetPaidFast, too.
Our assertion: Were he alive today and desperately needed cash, famed daredevil Karl Wallenda would find Zeek’s tightropes too dangerous to walk.
Purported MLM “expert” sent to woodshed: Zeek “consultant” and former SEC defendant Keith Laggos reportedly gets the Zeek boot after using phrases associated with the investment trade and after suggesting that gambling regulations could be used to derail the Zeek train in the near future.
Train wrecks and pom-poms: To his credit, MLMHelpDesk Blogger Troy Dooly reports the Laggos news and dubs an incendiary audio recording featuring Laggos into a Dooly-produced video. But known for his ability to find something “positive” in an MLM train wreck, Dooly goes on to suggest Laggos used Zeek-banned words because he was distracted and wasn’t concentrating. Dooly later declares that an examination into Zeek’s business practices by North Carolina Attorney General Roy Cooper is “exciting” news.
Only in Stepfordian MLM: Zeek cheerleading video with Dooly presented as centerpiece and Laggos presented as key answer man remains online, even after Zeek cans Laggos and Dooly questions the ethics of Laggos while at once making excuses for him.
Cluelessness: No guidance from Zeek on whether affiliates should avoid using the video when introducing Zeek.
More cluelessness: No guidance from Zeek on whether affiliates should continue to use marketing props published by Laggos’ Network Marketing Business Journal, a previous subject of gushing from Dooly.
Plan B: Laggos heralds Lyoness.
Stepfordian MLM vomit: Lyoness trades on name of former South Africa President Nelson Mandela, a recipient of the Nobel Peace Prize.
Why lots of people are fed up with Stepfordian MLM: As Lyoness uses an image of Mandela in a marketing campaign, AdSurfDaily’s Andy Bowdoin awaits sentencing in case in which ASD was accused of trading on the name of then-U.S. President George W. Bush to sanitize $110 million Ponzi scheme.
Whatever “works” is OK in Stepfordian MLM: As nascent penny-auction site and upstart Zeek competitor known as Bids That Give prepped for launch and positioned itself as a company that would aid charities for children, early promos traded on the name of the White House and Chelsea Clinton, the daughter of former President Bill Clinton and U.S. Secretary of State Hillary Clinton.
Oddities: Narc That Car/Data Network Affiliates/Phil Piccolo/Text Cash Network.
More . . .
** ______________________________ **
EDITOR’S NOTE: While performing a high-wire stunt in Puerto Rico in 1978, legendary daredevil Karl Wallenda fell to his death. He was 73, a risk-taker to the end.
UPDATED 11:39 P.M. EDT (AUG. 14, U.S.A.)
This is one of those “only in Stepfordian MLM” stories, a story that features not one, but two tightropes over a treacherously windy gorge Karl Wallenda would judge too dangerous to walk even if the daredevil business were in a sustained slump and he desperately needed cash. These are the tightropes over the Zeekler/Zeek Rewards Gorge, a man-made gulch in Lexington, N.C., potentially MLM’s next Quincy, Fla.
Quincy was the home of AdSurfDaily, a company that did an almost inconceivable amount of damage to MLM’s already-suffering reputation — first by creating an obvious, five-alarm Ponzi scheme and trying to disguise it as a “revenue-sharing” program and, later, by trying to “save” itself by comparing the U.S. Secret Service to “Satan” and the 9/11 terrorists.
Like the ASD story (and far too many MLM tales), the Zeek story is one that mixes the incongruous with the bizarre and only reinforces negative stereotypes about multilevel marketing.
Keith Laggos, a figurative tightrope-walker and purported MLM expert who once opined that AdSurfDaily’s 1-percent-a-day “program” was not a Ponzi scheme and later became a consultant whose image appeared repeatedly in a cheerleading video for the Zeek Rewards 1-percent-a-day-plus “program” after ASD was raided by the U.S. Secret Service in a Ponzi scheme case, is out, the company reportedly told Blogger Troy Dooly. (Link below.)
Laggos, though, appears not to have been fired for his ASD opinion. Indeed, Zeek may find comfort in that musing, which has been used by at least two ASD members (Todd Disner and Dwight Owen Schweitzer) who accused the U.S. government of presenting a “tissue of lies” to a federal judge when bringing the ASD Ponzi forfeiture case. Both of those ASD members also emerged as Zeek promoters. Curiously, the claim that the government had presented a “tissue of lies” was made longafter ASD had lost the case in both U.S. District Court and the U.S. Court of Appeals.
ASD and its apologists never were known for their impeccable timing. Neither was a 1-percent-a-day ASD knockoff known as AdViewGlobal (AVG), which incongruously announced a month after its February 2009 launch that its bank account had been “suspended” and that its CEO had resigned but would remain in the “accounting” department.
Two months later, AVG, which purported to operate from Uruguay while using U.S.-based Gmail to perform customer service, announced its banking problem had been solved by an offshore facilitator. AVG made this announcement on the same day the President of the United States announced a crackdown on offshore fraud. AVG was done weeks later. Before it exited the stage, it apparently thought it prudent to threaten to sue members who shared negative information and perhaps even have their Internet connections shut down.
Zeek is playing in this same bizarre field. Over the past couple of weeks, Dooly has ventured that Zeek might sue Randy Schroeder, an executive with the Mona Vie MLM company, for using words Zeek might find objectionable — “Ponzi” and “pyramid,” for example. And Dooly has suggested that a North Carolina credit union was risking a lawsuit from Zeek. Meanwhile, a Zeek critic known as “K. Chang” was informed by a purported Zeek “consultant” that Zeek might sue if its efforts to bring down “K. Chang’s’ site on HubPages.com failed.
Zeek now bizarrely claims that “all” criticism of Zeek has been unfair.
This claim was made just days after Zeek appears to have fired Laggos for casting his MLM line elsewhere while a Zeek “consultant” and while not sticking to the company line that Zeek does not constitute an investment opportunity. The other “program” is known as Lyoness, which Laggos has described as his “Plan B” and a “Plan B” for current Zeek members.
MLM ‘Mo’
To hear Laggos tell it on tape, the MLM business is the “momentum” business. One of the ways to maintain the momentum is to move certain banking operations offshore, say, to places such as Hong Kong. Laggos helped Zeek do that, according to Laggos. But Zeek might lose the mo and might not be far enough away to neutralize the regulators, he speculated.
No matter, Laggos ventured. There’s always another company with mo.
“Since last November, Zeekler has had the momentum,’ Laggos intoned in a recording now playing on Dooly’s Blog as part of a YouTube video and report on the sudden sacking of Laggos. “I believe they are going to lose the momentum shortly . . . The company now that’s gaining momentum — and I think it will be the momentum company over the next six months or a year — is Lyoness. And I’m suggesting that a lot of you guys consider Lyoness as your Plan B company now. Stay working with Zeekler. Keep promoting it. Don’t cross-sponsor it, but build a second income. Now, what’s nice about an ideal Plan B company is you would be able to work passively. Lyoness is that kind of company.”
In HYIP-speak, the word “passively” is code that tells participants that they won’t have to do much or anything at all to pile up cash (a/k/a “passive earnings”) by the boatload if they send in enough cash at the beginning of a scheme. Zeek is afraid of that word because it’s the type of word that can cause the SEC to come knocking. Lots of MLM scams that rely on willfully blind promoters to gain a head of steam use it in the early stages. When things get too hot, they try to take it off the table. The reason they try to take it off the table — sometimes by threatening affiliates — is it can lead to civil and criminal charges, seizures of bank accounts and investigations by multiple agencies.
Mixing the language of investments with references to Plan B didn’t do Zeek any favors, to be sure. Another thing that didn’t do Zeek any favors was Laggos’ reference to Zeek becoming the “momentum” company “last November.” In late September of 2011, the U.S. government released about $55 million in remissions payments to victims of the ASD Ponzi scheme.
This leads to questions such as these: How much of Zeek’s “momentum” was fueled by funds originally seized in the ASD Ponzi case and returned to victims in the form of remissions payments? How many ASD members turned around and plowed what effectively was their crime-victim compensation into Zeek, another 1-percent-a-day scheme? Why did Zeek promoters and former ASD members Disner and Schweitzer wait until November 2011 — the same month Laggos now says Zeek became the “momentum” company — to file their ASD-related lawsuit against the government and to present a federal judge an opinion from Laggos that ASD was not a Ponzi scheme?
“Plan B,” also known as “Don’t put all your eggs in one basket,” has a long and sordid history in HYIP Ponzi Land. AVG, for instance, was a de facto Plan B company set up after ASD, the Plan A company, got raided by the U.S. Secret Service on the Tuesday after the previous Friday’s seizure (Aug. 1, 2008) of ASD bank accounts. Lots of ASD members deluded themselves into believing that official company line that God was on ASD’s side. Some of ASD’s earliest post-seizure apologists told the troops that the seizure was a good thing because it would provide the government an opportunity to see how lawful and wholesome ASD truly was, that the government did not understand the business model and had made a monumental mistake.
The MLM vultures, though, had a slightly different take. In case the government didn’t see the ASD light, they speculated, ASD members could join other autosurfs, HYIPs and cash-gifting schemes. These Plan B schemes would enable ASD losses to be made up elsewhere. “Offshore” programs were positioned as the best.
Among the tips Laggos provided to listeners of the Lyoness conference call was this: “Don’t put no more than 70 percent back in [Zeek]. Take out 20 or 30 percent [on] a daily basis. [Unintelligible.] This would be a good place. But, by the same token, if you put $10,000 in Zeekler, if nothing happens over the next year, you’ll probably make $30,000 or $40,000, if that’s all you do without building the front end, the matrix . . . The same amount of money in Lyoness, you’re looking . . . and not doing anything else, without single sponsoring . . . you can probably make a quarter-million dollars.”
The threat to Zeek, according to Laggos, is the FTC and how U.S. gambling regulations could be applied to penny-auctions such as its Zeekler arm. His words on the tape suggest he is confident that Zeek has sufficient cover to ward off a Ponzi/securities investigation. But even as he’s suggesting Zeek has the securities angle covered, he’s using the language of investments.
We wonder: Can MLM really have sunk to these deplorable depths?
But it gets even worse.
Laggos then suggested Lyoness could be used as a hedge in case the FTC acted against Zeek.
“If I’m wrong about what’s gonna happen with the penny auctions — and if you look at my career, I haven’t been wrong often — then the worst-case scenario is we screwed up and we made two incomes . . . We’re making two great incomes with two great companies.”
Dooly, whom to date hasn’t found Zeek’s various claims altogether too much, now has decided that Laggos crossed the altogether-too-much line when he harrumphed for Lyoness and used certain words Zeek finds offensive.
While the featured speaker on the Lyoness call last month with Zeek members listening in, Laggos spoke about Zeek in “several” ways that were “way out of compliance,” Dooly ventured in his video report running on YouTube.
Laggos “talks about putting money into the game,” Dooly reports. “I mean, this is bad right here. You can’t put money in. OK? You either join the company and you’re buying memberships, you’re buying bids. But for Keith to be talking like this was an investment-type deal. This is just . . . and we all fall prey to this. But this is why you shouldn’t be doing public calls when you’re under fire and you’re not paying attention to what you say. And you can hear in Keith’s case — the phone [is] ringing, his assistant [is] coming in to talk to him, his mind is not in the game the way it should be. And that is just . . . it’s sad right now ’cause he’s no longer with [Zeek] . . .”
In short, according to Dooly, Laggos’ big sin was painting Zeek as an investment program in contravention of the Rules Of Zeek.
Not sticking to the script, however, is hardly an original sin within the Zeek sphere. In 2011, while speaking during a conference call to raise money for the Disner/Schweitzer ASD-related lawsuit against the government, Schweitzer, a one-time lawyer whose license was suspended in Connecticut, said he’d invested in ASD. Nevertheless, Disner and Schweitzer later presented a federal judge Laggos’ opinion that ASD was not a Ponzi scheme and that providing money to ASD did not constitute making an investment.
Nobel Peace Prize Used As MLM Stage Prop
Lyoness is an MLM company eager to let its participants and prospects know that it is building a school in the hometown of Nelson Mandela and that a Lyoness team recently was invited to the 1993 Nobel Peace Prize-winner’s home. It even publishes a picture to prove it and notes that a Mandela grandson is a Lyoness rep.
Back in the United States, meanwhile, former ASD President Andy Bowdoin will find out Aug. 29 how long he’ll spend in federal prison. Zeek’s business model and disclaimer language strongly resemble that of ASD, which the U.S. Secret Service described as a “criminal enterprise” that relied on linguistic sleight-of-hand to draft tens of thousands of people into an electronic Ponzi scheme. ASD traded on the name of then-U.S. President George W. Bush, in effect using the White House to sanitize a massive international fraud caper.
Welcome to the Highwire Wing of MLM.
While all of this is going on, a nascent penny-auction “program” and upstart Zeek competitor that claims it exists to elevate children out of poverty is getting ready to unleash itself on the consuming public.
That “program” is known as Bids That Give. One prelaunch promo claimed that a founding affiliate was an SEO expert once hired by a candidate for the U.S. Presidency. The first three minutes of the promo did not even reference Bids That Give. Instead, it dropped names linked to the White House, including the name of former First Daughter Chelsea Clinton and Doug Read, an adviser to two U.S. Presidents. For good measure, the promo dropped the name of NBC News anchor Lester Holt.
The most vomitous MLM “programs” are infamous for dropping names. It is typically the case that the individuals whose names are dropped have no affiliation whatsoever with the “program.” But name-dropping and brand leeching have proven to work time after time in MLM scheme after MLM scheme. (See screenshot.)
Did Mark Zuckerberg REALLY endorse JSS Tripler/JustBeenPaid. According to this Blog, the answer is yes. Facebook did not respond to a request for comment from the PP Blog last year on claims that Zuckerberg had endorsed JSS/JPB, which purports to provide a return of 60 percent a month.
MLM And Wordplay
In 2009, ASD’s Bowdoin was sued by some members of his own company under the federal racketeteering (RICO) statute. Looking at it another way, the ASD members came to believe that ASD was a criminal enterprise with a plan to expand while coming up with new and better ways to steal.
Because veteran MLM huckster Bowdoin also was a veteran securities swindler who’d been charged at the state level with fraud in at least three Alabama counties before launching Florida-based ASD in 2006, federal prosecutors said, Bowdoin tried to avoid the use of the language of investments as a means of keeping the 1-percent-a-day ASD scheme under the radar.
The linguistic cover Bowdoin chose — a cover the Feds stripped bare — was that ASD was an “advertising” company with a “revenue sharing” program, not an investment company selling “securities.”
Bowdoin tried to create additional cover by saying payouts were not guaranteed, according to federal court filings.
Now, four years after the ASD raid, Zeek is using the same type of disclaimer language and members are getting the same sort of instructions on what words to avoid.
Federal investigators became wise to this type of linguistic charade long ago. The charade was outlined in the 2010 criminal indictment against Bowdoin. The indictment quoted Bowdoin himself laying out the linguistic plot to hide the true nature of the 1-percent-a-day ASD program and keep the government at bay (italics added):
“[L]et’s don’t (sic) use the words investment and returns. Instead, lets (sic) use ad sales and surfing commissions. The Attorney Generals in the U.S. don’t like for us to use these words in our program.”
Wordplay to mask an investment scheme also was referenced repeatedly in the forfeiture complaints against more than $80 million in ASD-related bank accounts (italics added):
“The [undercover agent] asked her about investing with ASD. She immediately said, ‘Don’t call it investing, you know what I mean, we can get in trouble if we say that, we have to be careful.” — Source: Federal forfeiture complaint, Aug. 5, 2008.
Only In MLM La-La Land
To be sure, the departure from Zeek of Laggos is a big story. But it’s not the biggest story. The biggest story is that the Paul Burks-led company already was walking a tightrope when it hired the tightrope-walking Laggos and now has cut his rope, casting him into the gorge without informing the membership at large and without pulling the tightrope-walking promotional material that references Laggos or was produced by his publishing company.
Some of that promo material features tightrope-walking Dooly, who’s now questioning the ethics of tightrope-walking Laggos.
How strange is the latest PR disaster to rock Zeekland? So strange it almost defies description.
As noted above, news of the Laggos departure was delivered by Zeek-friendly Blogger Dooly. And the news was delivered even as images of Dooly appeared online as a centerpiece in the same cheerleading video that features images of Laggos as centerpieces. The video largely consists of still photos taken at a Zeek “Red Carpet Day” event in Clemmons, N.C., on June 13. Incredibly, the video continues to appear online, despite the sudden and unexpected departure of Laggos last month.
On Aug. 4, Zeek used its Blog to accuse unspecified “North Carolina Credit Unions” of slander for expressing concerns to customers about Zeek. The post implied Zeek members who didn’t toe the company line would be penalized. Such members were “violators” of company policy, the firm said.
But Zeek has not addresed the Laggos issue on its Blog. Nor has it provided any guidance on whether members should stop using the Zeek cheerleading video that features both Laggos and Dooly, along with Zeek staffers, executives and members who showed up at the June 13 event in Clemmons. The Laggos-produced written materials also are out there, with no guidance from Zeek about whether members should continue to use them or to rely on them in any way.
Like ASD, Zeek plants the seed that participants will earn a return that corresponds to an annual return in the hundreds of percent but insists it is not offering an investment. The office of North Carolina Attorney General Roy Cooper said last week that it had asked Zeek to produce “documents” as part of an “examination” of its business practices. Dooly described that development as “exciting.”
Zeek is making MLM look ridiculous. Troy Dooly is making it look sillier yet. He should not be “covering” a company that is trading off his credibility as an MLM advocate to sell itself. Dooly now is questioning the ethics of Laggos even as Dooly permits Zeek to use his image in marketing promos that also feature images of Laggos.
Prior to opining that ASD was not a Ponzi scheme — only to be one-upped later by Bowdoin, who said that it was when entering a guilty plea to wire fraud in May 2012 — Laggos agreed to settle a 2004 case with the SEC that alleged he issued laudatory press releases and a laudatory article for a company that later become the subject of a securities investigation without disclosing he was being compensated for touting the purported opportunity.
Laggos neither admitted nor denied the SEC’s allegations, which involved a company known as Converge Global Inc. and a subsidiary known as TeleWrx Inc. The future Zeek consultant settled the SEC case by disgorging nearly $12,000, paying interest of nearly $2,000, paying a civil fine of $19,500 and agreeing to a five-year penny-stock ban.
In April, Network Marketing Business Journal, which lists Laggos as its president, published a laudatory article on Zeek. Dooly memorialized the article’s publication by publishing a special Sunday story about it on Dooly’s MLMHelpDesk. He memorialized it further by producing a gushing video in which he described Laggos as “my good friend and mentor.”
“He is breaking a story here that I thought was amazing,” Dooly said of the NMBJ Zeek article, which gushed that Zeek has a 25 to 1 customer to rep ratio. The claim is important because, if true, it could take Ponzi and pyramid concerns out of play. Some Zeek critics doubt that it’s true.
In April, Dooly noted that NMBJ was one of his favorite publications and that he picked it up on that particular Sunday while relaxing near his pool over a cup of tea.
But now — less than four months after Dooly’s April 15 gushing story and video on NMBJ’s gushing story about Zeek and less than two months after images of both Dooly and Laggos appeared in the Zeek video in which Zeek gushed about itself — Laggos is out at Zeek.
“Breaking MLM News: Zeek Rewards Officially Parts Ways With Dr Keith Laggos After Recorded Call Goes Public,” Dooly advised readers in a headline.
The precise reasons for the departure of Laggos remain unclear. Also unclear is whether Laggos will retain a reported Zeek downline of about 4,500 members that he apparently was managing while at once being a paid Zeek consultant.
Produced by USHBB Inc., which once produced videos for the bizarre (and failed) Narc That Car license-plate recording scheme that claimed some affiliates were out-earning the President of the United States, the Zeek video heralding Laggos, Dooly and others shows Dooly mugging with Zeek executive Dawn Wright-Olivares and Laggos posing with Peter Mingils. The last names of both Laggos and Mingils are misspelled in the USHBB video.
Like Dooly, Mingils is a board member of the Association of Network Marketing Professionals. He’s also Zeek’s Training & Incentives Coordinator and is “rockin’ the Certified Trainers course curriculum,” according to Zeek.
Zeek, which at one time listed USHBB executive OH Brown as a Zeek employee, now says Brown is “banging out video after video.”
Some of the backstory surrounding the failed Narc That Car scheme is remarkably similar to the Zeek scheme. In addition to the presence of USHBB, Narc and Rex Venture LLC, Zeek’s purported parent company, both have scored the Better Business Bureau’s lowest rating: “F.”
Affiliates of both Narc and Zeek, meanwhile, have sought to turn attention away from the core issues surrounding both Narc and Zeek by suggesting that the BBB is a fraud.
But perhaps most compellingly, the now-failed Narc scheme once did at least part of its banking at NewBridge Bank, one of the banks that Zeek used before mysteriously announcing on Memorial Day that it was ending its relationship with NewBridge. Narc was based in Texas. How it ended up banking at NewBridge is unclear.
What is clear is that Narc was a pyramid scheme that planted the seed it existed to help the U.S. AMBER Alert system for locating abducted children and traded on imagery of the White House. Both the U.S. Department of Justice and the National Center For Missing and Exploited Children, which administers part of the AMBER Alert program, confirmed to the PP Blog more than two years ago that they had no affiliation with Narc.
A Narc Knockoff With Phil Piccolo As Background Player
Narc appears to have inspired a knockoff MLM scheme known as Data Network Affiliates, which was linked to longtime MLM huckster Phil Piccolo. In late 2011, DNA’s website — and the website of another a Piccolo-linked “program” known as OWOW — were used to drive traffic to an emerging MLM scheme known as TextCashNetwork (TCN).
In December 2011, the PP Blog reported that TCN had used the name of Rex Venture Group on its website in the context of a purported “ASSIGNMENT” clause. The Rex Venture reference later mysteriously went missing from the TCN site, a circumstance that could cause investigators to question Rex Venture about whether it was aware that its name appeared on the TCN site and whether it had any business relationship with TCN.
If this is modern MLM, MLM is in a lot of trouble. Karl Wallenda, who built a magical name in the daredevil business and made a career out of taking risks, wouldn’t do Zeek.
