EDITOR’S NOTE: Zeek receiver Kenneth D. Bell has issued the following statement (below). The original is here and is dated July 30, 2014. “RVG” stands for Rex Venture Group, the operator of Zeek. Zeek is alleged to be a Ponzi- and pyramid scheme that gathered on the order of $850 million. The receiver’s statement addresses U.S. domestic class-action claims against more than 9,000 alleged “winners.” Still engaging in willful blindness, pushing HYIP schemes and hoping to harvest “commissions” from them — and perhaps deluding yourself into believing there will be no consequences?
Zeek-related matters have been inside the courts for nearly two years, meaning the litigation is at an advanced stage compared to, say, TelexFree. Zeek’s history therefore may provide a roadmap of sorts on what’s in store downstream for the TelexFree “program” and certain insiders and promoters. On a side note, the trustee in the TelexFree bankruptcy case is seeking court approval to issue subpoenas to many businesses and people who came in contact with that “program.” TelexFree, which operated in the United States, Brazil and other countries and appears to have gathered more than $1 billion, is known to have had promoters in common with Zeek. By one account, Zeek had 100,000 promoters in Brazil alone.
Bell is expected to file litigation against alleged international Zeek “winners.” How deeply that will touch Brazilian affiliates is unclear.
** Editor’s Note update at 2:08 p.m. Please see Comments thread below for possible Zeek promoter tie-ins to the Profitable Sunrise and Text Cash Network schemes. **
** _____________________________ **
Zeek receiver Kenneth D. Bell. December 2013 screen shot.
ANNOUNCEMENT FROM THE RECEIVER – JULY 30, 2014
On March 3, 2014, I announced the filing of a lawsuit to obtain the return of the money paid out to net winners in the ZeekRewards scheme in excess of the amount they paid into RVG. In that lawsuit, Kenneth D. Bell v. Todd Disner, et al., Civil Action No. 3:14-cv-91, I made claims against more than 10 of ZeekRewards’ largest “net winners” in the United States asking that the Court order them to repay the net winnings they received from the scheme. I also made class action claims against approximately 9,400 ZeekRewards net winners in the United States who each won more than $1,000.
Today, I have filed with the Court a motion asking the Court to certify this Net Winner Class and asked that the Court appoint one or more of the largest net winners sued by name as class representatives because they will, by virtue of their own defense to the same claims, be adequate and appropriate representatives for the rest of the Net Winner Class. Proposed Net Winner Class members are not required to file any response to the motion, but may, of course, discuss this matter with legal counsel if they choose to do so. The deadline for the named defendants to respond to the motion has been set for August 18, 2014.
A copy of the Motion to Certify the Net Winner Class and the Memorandum of Law in Support of the Receiver’s Motion to Certify the Class can be found here: Motion and Memorandum. Also, a list of those individuals whom the Receiver believes won more than $1,000 and therefore would be included in the Net Winner Class can be found here.
“While reviewing the ASD website in the District of Columbia, [an undercover agent] found a posting within ASD’s News section, apparently posted by ASD on July 2, 2008. The title of the posting was, “Alert Pay & Direct Deposit are being phased out July 31, 2008.” According to ASD’s posting, “We have notified BOA not to accept cash or personal checks for deposit account – English or Spanish.” ASD further stated, “Please remember that the preferred method of purchasing Ad Packages is by mailing a Check or by Solid Trust Pay . . . Solid Trust Pay is a Canada based money transmitting and payment company that, like the e-Gold system, operates over the Internet. It appears that beginning August 1, 2008, Solid Trust Pay will be ASD’s preferred method for receiving funds from members, and for paying rebates and commissions to members . . . Within the past two weeks, ASD has wired several million dollars to Solid Trust Pay from its BOA Accounts. A TFA also learned that earlier in July 2008, a bank other than BOA closed the last account that was controlled by Bowdoin or family members after that bank determined, and explained to them, that an investigation by the bank determined that Bowdoin appeared to be operating a Ponzi scheme.” — AdSurfDaily Ponzi scheme forfeiture complaint, August 2008
TelexFree affiliate promos encouraging participants to register for International Payout Systems (I-Payout) began to appear online in recent hours. Just last month, TelexFree affiliates were encouraged to register for Global Payroll Gateway, another e-Wallet vendor that supposedly would solve TelexFree’s payment problems as a pyramid-scheme probe moved forward in Brazil. There now are reports online that GPG has dumped TelexFree, leading to questions about whether TelexFree is trying to port its alleged fraud scheme to yet another vendor — I-Payout. Source: Google search results.
In 2008, the U.S. Secret Service effectively accused the AdSurfDaily MLM “program” of playing a game of payment-processor roulette as U.S. law enforcement put the squeeze on certain money-movers, the willfully blind enablers of online fraud schemes.
ASD, a $119 million HYIP Ponzi scheme that led to a 78-month prison sentence for operator Andy Bowdoin, started out by accepting “e-Gold and Virtual Money,” according to a Ponzi-scheme forfeiture complaint filed in federal court in August 2008.
But ASD, according to the complaint, realized e-Gold had come under investigation for enabling the laundering of money, something that could put the heat on ASD.
“Shortly after publicity surrounding the government’s investigation into e-Gold appeared, ASD discontinued using the e-Gold system as a means for receiving member funds,” the complaint alleged.
And even as these events were occurring, according to court filings in the ASD case and in other cases, Robert Hodgins, a supplier of debit cards and the operator of Virtual Money Inc. — now listed by INTERPOL as an international fugitive — came under investigation in Connecticut amid allegations he was assisting in the laundering of narcotics proceeds in Medellin, Colombia, and prepping himself to assist in the laundering of funds in the Dominican Republic.
Virtual Money, whom some ASD members said was supplying debit cards to ASD, also was linked to the PhoenixSurf Ponzi scheme, according to court filings.
In December 2010, federal prosecutors alleged that ASD also had accepted money from e-Bullion, a California firm that processed payments for Ponzi schemes, including the $72 million Legisi HYIP scheme in Michigan that led to prison sentences for operator Gregory McKnight and pitchman Matthew John Gagnon. E-Bullion operator James Fayed has been sentenced to death for ordering the brutal contract slaying of his wife, a potential witness against him. Pamela Fayed’s throat was slashed repeatedly in the shadows of a Greater Los Angeles parking garage, her husband seated on a nearby park bench “like he doesn’t have a care in the world.”
ASD, according to court filings, also used AlertPay and SolidTrustPay, money-movers based in Canada that have been linked to multiple Ponzi schemes, including the alleged $600 million Zeek Rewards Ponzi scheme broken up by the SEC last year.
Not even Bowdoin’s arrest in 2010 stopped him from pitching fraud schemes, according to court filings. Facing serious criminal charges for his actions in ASD, Bowdoin (in 2011) became a pitchmen for the OneX “program,” which federal prosecutors later alleged to be a pyramid scheme recycling money in ASD-like fashion. Among Bowdoin’s fellow OneX pitchmen was T. LeMont Silver, later of Zeek and later of JubiMax and GoFunPlaces, two MLM “programs” that are suing each other amid allegations of financial fraud.
At one time, OneX claimed to have a relationship with SolidTrustPay. It then claimed to have ended that relationship and to have started a relationship with I-Payout. Earlier, I-Payout had listed the uber-bizarre TextCashNetwork MLM “program” with ties to the Phil Piccolo organization as a “selected client.” TextCashNetwork now appears to have disappeared, but still is operating with the acronym “TCN” — this time as TrueCashNetwork. How the “new” TCN is processing payments is unknown. What is known is that someone associated with the “new” TCN has sent emails to “winners” in the Zeek scheme in an apparent bid to get them to flog for the new iteration, an apparent investment arm of which is being promoted as an opportunity to earn an interest rate of 50 percent.
Now — as incredible as it seems — promoters of the alleged TelexFree pyramid scheme operating in Brazil and the United States now are claiming that TelexFree is using I-Payout, known formally as International Payout Systems Inc. Equally incredibly, this is happening less than a month after TelexFree promoters advised TelexFree participants to register with Global Payroll Gateway (GPG), another eWallet company and supplier of debit cards, as a means of getting paid after payouts to Brazilian members of TelexFree were blocked in Brazil.
Just last month, TelexFree affiliates were encouraging prospects to register with Global Payroll Gateway (GPG). In recent hours — and amid reports GPG has given TelexFree the boot — TelexFree affiliates have been urged to register with I-Payout. Source: Google search results.
There are reports online, including on Facebook from self-identified members of TelexFree, that GPG gave TelexFree the boot in recent days. No sooner did those reports surface than videos went up on YouTube encouraging TelexFree members to register for I-Payout.
One of the reports that TelexFree suddenly had shifted from GPG to I-Payout is published on the MoneyMakerGroup forum. MoneyMakerGroup’s name appears in U.S. court files as a place from which Ponzi and fraud schemes are promoted. Both FINRA and the SEC have warned that HYIP schemes spread in part through social-media sites such as forums, YouTube and Facebook.
Because international MLM HYIP fraud schemes often have promoters in common — and because the schemes are promoted on Ponzi cesspits such as MoneyMakerGroup and TalkGold — proceeds from the schemes can flow into banks at the local level, putting them in the position of becoming warehouses for the ill-gotten gains of participants, including winners and insiders. The use of stored-value debit cards such as those in play in HYIP schemes can lead to the quick dissipation of assets, meaning that victims of an HYIP scheme may have limited hope (or even no hope) that a recovery can be made for their benefit.
The most recent incongruous events involving TelexFree are occurring even as at least one judge and one prosecutor involved in the TelexFree pyramid probe in Brazil reportedly have been threatened with death. And, as was the case with ASD, some promoters of TelexFree have claimed an ability to expedite the flow of money to the scheme — perhaps through back-office transactions within the TelexFree system.
BULLETIN: Zeek Rewards members are being targeted in a new scheme with ties to the Phil Piccolo organization and are being solicited for sums ranging from $600 to $60,000 “in return for ” . . . “guaranteed 50 percent interest” from a purported “unique and legal loan system” over an unspecified time period, the PP Blog has learned.
The offering, which hints of some sort of falling out with Zeek’s management, has been styled on YouTube as “The Diamond Club by TRUE CASH.” The emerging “program” was the subject of an email pitch yesterday that appears to have been targeted by an unknown party at former Zeek “Diamond” affiliates, potentially including some of Zeek’s largest “winners” who have exposure to clawback lawsuits filed by the court-appointed receiver and who previously have been solicited to make contributions to a purported defense fund for Zeek affiliates. Zeek “losers” also could be targets.
Previous schemes linked to Piccolo include the uber-bizarre Data Network Affiliates (DNA) “program” and One World One Website (OWOW), an equally bizarre money grab. (Use the PP Blog’s search function for information on those “programs.”)
In August 2012, the SEC described Zeek as a $600 million Ponzi- and pyramid scheme. In April 2013, the SEC took down a purported “loan” program known as Profitable Sunrise that may have gathered tens of millions of dollars through an alleged offering fraud. How the “The Diamond Club by TRUE CASH” offering intends to collect money is unclear, although a website to which pitchmen are directing traffic includes the logo of SolidTrustPay, one of the offshore processors used by Zeek.
Certain members of a Zeek-related email chain received the purported “Diamond Club” pitch yesterday. Hinting of bad blood, the pitch appeared below this headline, “Zeek Management Belongs in Prison – On 8/27/2013 I earned over $500,000 – I will pay your way in from $600 to $3000.”
How the $500,000 purportedly was earned was not explained. Also unclear was the identity of the sender. Among the claims in the pitch is this one (italics added):
IF YOU LOST $10,000 IN ZEEK OR RECRUITED 10 PEOPLE IN ZEEK I WILL PUT UP $3,000.00 FOR YOU
The principal part of the pitch claims this: “I just made $500,000.00[.] I will put up the $600 minimum for you – You pay me back ‘ONLY OUT OF COMMISSIONS’. If you are already in one of TCN 12 opportunities and want to be on my “DIAMOND CLUB” Team then you need to re-sign up. If you are resigning up you will need a new e-mail address. Get a free g-mail account from Google.”
From the lower-right corner of the True Cash Network website. Source: Aug. 30 screen shot.
In the same email, the pitch points recipients to a YouTube video and a website URL of ThePowerTeam.TrueCashNetwork.Com. “TrueCashNetwork” is using the same acronym used by TextCashNetwork (TCN), an earlier scheme linked to Piccolo and Joe Reid, a longtime huckster associated with Piccolo. On the TrueCashNetwork website, an emblem labeled SiteLock SECURE appears, along with the word “Passed.” The emblem incongruously includes the name of “TEXTCASHNETWORK.COM,” even though it appears on the TrueCashNetwork domain. The TrueCashNetwork domain appears to have been registered behind a proxy on June 28, 2013.
Reid, according to the TrueCashNetwork website, is the new TCN’s “Master Referral Agent” or “MRA.”
Precisely what happened with the original TCN, a purported daily deals site that purportedly used text-messaging, never has been clear. The emerging TCN, however, appears to have access to the original’s database and appears already to have used it to create affiliate links for “old” TCN members — this despite the fact TextCashNetwork is listed in Wyoming as a “dissolved” entity and its members may not have given permission to be ported to the “new” TCN.
These links shown in Google search results are showing the name of “textcashnetwork” in the URL. But all of them rotate to True Cash Network.
The “new” TCN purports to be operating as “True Cash Network, Inc.” Disputes, according to its website, will be handled under Wyoming law, but there appears to be no corresponding registration for True Cash Network in the state. Meanwhile, the “new” TCN is using the same Boca Raton (Fla.) business address as the “old” TCN. The old TCN once curiously purported that a member’s agreement with it “may not be transferred or assigned without prior written consent of REX Venture Group.”
Rex was the operator of Zeek Rewards and one of the defendants in the SEC’s Ponzi case.
True Cash Network — like TextCashNetwork before it — appears to be positioning itself as an MLM company that pushes affiliate products, including a “Medical Savings Plan,” X8 Energy Gum, Parcman Male Enhancer and more.
While TCN was operating as TextCashNetwork, the Piccolo organization appears to have tried to dupe people into believing the company was owned by Johnson & Johnson, a component of both Dow Jones and the S&P 500 and an internationally famous maker of pharmaceuticals and consumer products that are household names.
TelexFree affiliates have shared a photo of President James M. Merrill posing in front of an office building in Massachusetts. The photo, however, is not proof of TelexFree’s legitimacy and raises questions about whether the company was trying to plant the seed it had a massive physical presence in the United States.
UPDATED 10:22 P.M. EDT (U.S.A.) The purported TelexFree “opportunity” is under investigation by multiple agencies in Brazil, its purported base of operations despite competing claims the company is headquartered in the United States. The notes below concern TelexFree’s U.S. presence and positioning. They are presented in no particular order of importance. TelexFree says it is in the communications business.
TelexFree has a footprint in Massachusetts at 225 Cedar Hill Street, Suite 200, Marlborough. It is a shared office facility. Ads for the building suggest a conference room with video capabilities can be rented by the hour. One suggested use of the room is for attorneys to rent it to conduct depositions. Some attorneys practicing in the state and federal courts use the building as a business address.
Other lessees include the Massachusetts Library System (MLS), which describes itself as “state-supported collaborative” to foster “cooperation, communication, innovation, and sharing among member libraries of all types.” MLS uses Suite 229, according to its website.
TelexFree operates as an MLM. One of the problems in the MLM sphere is that purported “opportunities” and their promoters have been known to dupe participants by leasing virtual office space to create the illusion of scale or of a massive physical presence. Such was the case with a Florida entity associated with AdViewGlobal, an AdSurfDaily knockoff scam that purported to pay 1 percent a day. As the PP Blog reported on May 31, 2009 (italics added):
Research suggests a company with which AVG has a close association is headquartered in a modern office building in the United States. The building was constructed in 2003. Office functions and conferencing can be rented by the hour. Two large airports are nearby, and a major Interstate highway is situated one mile from the building.
It is a virtual certainty that AVG, which purported to operate from Uruguay, actually was operating from the U.S. states of Florida and Arizona and using a series of business entities to launder the proceeds of its fraud scheme. AVG disappeared mysteriously in June 2009.
On Dec. 14, 2011, the PP Blog reported that Text Cash Network (TCN) — another purported MLM “opportunity” — was using a virtual office in Boca Raton, Fla., in a bid to create the illusion of scale. TCN promoters published photos of a glistening building with TCN’s name affixed near the crown of the building. The Boca Raton Police Department, however, said the firm’s name did not appear on the building.
Although the PP Blog is unaware of any bids to Photoshop TelexFree’s name on a large office building, affiliates have shared photos of TelexFree President James M. Merrill posing in front of the large Massachusetts building. So there can be no confusion, TelexFree does not own the building. TelexFree affiliates/prospects should not rely on the photo of the building as proof of the legitimacy of the company. The photo itself raises questions about whether Merrill and TelexFree were trying to create the illusion of scale. Even though the answer could be no, the negative inferences that can be drawn from the photo contribute to MLM’s reputation for serial disingenuousness.
TelexFree also has a presence in the state of Nevada. Records show that an entity known as TelexFree LLC is listed as “Domestic Limited-Liability Company” situated in Las Vegas. Listed managers include Carlos N. Wanzeler, Carlos Costa and James M. Merrill. TelexFree operates in Massachusetts with an “Inc.” version of the name — i.e., TelexFree Inc., having undergone a name change in February 2012 from Common Cents Communications Inc. In Massachusetts, James Merrill is listed as the registered agent, president, secretary and director of the firm, with Carlos Wanzeler listed as treasuer and director. Unlike the Nevada “LLC” version of TelexFree, Carlos Costa appears not to hold a title in the Massachusetts “Inc.” entity.
The footprints in the United States are important in the sense that they establish a business presence in the country should TelexFree become the subject of U.S. investigations akin to what is happening now in Brazil, where pyramid-scheme and securities concerns have been raised. Along those lines, records of the Financial Industry Regulatory Authority (FINRA) appear not to list TelexFree — despite the fact affiliates in the United States have claimed members acquire “stock” from TelexFree that can be sold through TelexFree and that affiliates purchase “contracts” from TelexFree.
One YouTube video viewed by the PP Blog shows a TelexFree affiliate purportedly cashing out his stock through his TelexFree back office. The affiliate appears to be speaking in U.S. English, citing the date as March 19, 2013. In the video, the affiliate describes his pitch as a “quick withdrawal video” — i.e., proof that TelexFree is legitimate because it pays.
“OK,” the narrator intones. “I’m going to sell all my stock.” The video shows a tab labeled “Stock” and a subtab styled “Repurchase” in the back office.
The narrator then clicks on a series of graphics styled “REPURCHASE” and tells the audience that he wants to show it all the “stock that I have that converts to actual money.” He then proceeds to a “Withdraw” subtab under a “Statement” tab. These actions eventually expose a screen that shows an “AVAILABLE BALANCE” of $927.61 for withdrawal.
For a brief moment, the acronym “BT&T” flashes on the screen, suggesting the TelexFree affiliate is seeking to have his earnings from stock sales relayed through North Carolina-based Branch Banking & Trust. The interesting thing about that is that the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme claimed it had a banking relationship with BB&T.
In May 2012 — on Memorial Day — Zeek mysteriously announced it was ending its relationship with BB&T. It was unclear from the TelexFree affiliate’s video whether he was a BB&T customer or whether TelexFree was. What is clear is that the SEC moved against Zeek in August 2012, accusing the company of securities fraud and selling unregistered securities as investment contracts. The U.S. Secret Service said it also was investigating Zeek.
In this TelexFree promo running on YouTube, the acronym BB&T flashes on the screen in a TelexFree affiliate’s back office.
Among the problems with HYIP schemes is that banks can become conduits through which illicit proceeds are routed or stockpiled. Zeek used at least 15 domestic and foreign financial institutions to pull off its fraud, according to court filings.
Because HYIPs offer commissions to members who recruit other members along with “investment returns,” legitimate financial institutions can come into possession of money tainted by fraud.
Like Zeek (and AdViewGlobal and AdSurfDaily), TelexFree has a presence on well-known forums listed in U.S. court records as places from which Ponzi schemes are promoted.
TelexFree shares some of the characteristics of fraud schemes such as Zeek, AdViewGlobal, AdSurfDaily, Profitable Sunrise and others. ASD, AVG and Zeek, for instance, had a purported “advertising” element. So does TelexFree.
TelexFree affiliates claim they get paid for posting ads online for the purported “opportunity.” Zeek affiliates made the same claim.
It is highly likely that Zeek and TelexFree have promoters in common, a situation that potentially is problematic, given that some affiliates may have used money from Zeek to join TelexFree — and the court-appointed receiver in the Zeek case is pursuing clawbacks against “winners.” In short, some of the winnings could have been spent in TelexFree.
An online promo for Zeek in July 2012 claimed North Carolina-based Zeek had 100,000 affiliates in Brazil alone. TelexFree affiliates are claiming that their “opportunity” now has hundreds of thousands of affiliates, which suggests TelexFree has achieved Zeek-like scale. Whether it enjoys Zeek-like, money-pulling power on the order of $600 million is unclear.
What is clear is that TelexFree, like Zeek before it, is spreading in part through the posting of promos on classified-ad or similar sites across the United States. Profitable Sunrise, another HYIP, spread in similar fashion. Dozens of U.S. states issued Investor Alerts or cease-and-desist orders against Profitable Sunrise, which the SEC accused of fraud in April 2013.
To gain an early sense of the scale TelexFree may be achieving in the United States, the PP Blog typed into Google the term “TelexFree” and the names of several U.S. states known to have taken actions against Profitable Sunrise. This revealed URLs such as “TelexFreeOhio” and “telexfreetexas.blogspot.com,” for two examples. It also showcased classified-ad (or similar) sites on which TelexFree promos are running or have run.
Finally, the state of Massachussets was the venue from which the prosecutions of the infamous World Marketing Direct Selling (WMDS) and OneUniverseOnline (1UOL) pyramid-schemes were brought in federal court. Those fraud schemes were targeted at Cambodian-Americans. The state does not take kindly to affinity fraud. In March, Massachusetts securities regulators charged a man in an alleged fraud bid against the Kenyan community.
Among the claims of the MLM hucksters pitching WMDS and 1UOL was that members could purchase an income. Some TelexFree affiliates are making similar claims.
The WMDS and 1UOL frauds became infamous as the source of death threats, including one against a federal prosecutor.
Media outlets in Brazil have reported that death threats have surfaced over the TelexFree scheme.
For the reasons cited above and more, it would be surprising if things end well in the United States for TelexFree, which has Zeek and ASD-like signatures of MLM disasters waiting to happen.
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 . . .
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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.
“WE NEED INTERNATIONAL SATELLITE PARTNERS: #1 must have minimum $25,000 deposit. #2 must have a good name in the country. #3 must be very honest and trustworthy. If you know of such a person in your country have them send a request to [deleted]@textcashnetwork.com.” — Feb. 13, 2012, Blog promo for Text Cash Network
From a TCN Blog promo on Feb. 13, 2012.
UPDATED 12:07 A.M. ET (FEB. 16, USA.)
Following a previous pattern of scams linked to MLM huckster Phil Piccolo, the purported Text Cash Network (TCN) text-advertising “opportunity” now is fishing for great sums of cash, according to affiliate Blog posts that appear not to even to question the offer.
The posts appear to be based on an email affiliates received from TCN , with affiliates simply copying and pasting the content on Blogs.
TCN, according to the posts, is seeking “INTERNATIONAL SATELLITE PARTNERS” willing to plunk down a “minimum $25,000 deposit.” The posts are tied to a purported TCN celebration for being in business for 100 days.
The promos also are hyping something called the “VIP Plus Advertising Package,” which purportedly will debut March 16 at a cost of “$499 + $60 Monthly x 11 Months with 100% of the additional funds going to the VIP Plus Agents.”
Some TCN affiliates are simultaneously encouraging recruits and prospects to send money to TCN via Western Union to buy in as TCN distributors at levels between $129 and $399. Such tactics have been associated with advance-fee scams and other forms of fraud.
“Western Union will allow you to put it on your credit card!” one TCN affiliate promo roars. “Call Western Union for details.”
In November 2010, a Piccolo-associated entity known as One World One Website (OWOW) solicited members to send in cash amid promises the contributions would earn “24% Annual Interest.” The offer led to questions about whether OWOW, which is listed as a defunct Wyoming corporation while it maintains websites that are unable to process payments, was selling unregistered securities as investment contracts.
“The 24% Annual Interest On Your Money … Did you know that many PROS are receiving 24% Annual Interest on their money. The deadline for 24% annual interest paid in monthly increments of 2% will end on 11/30/2010 . . . Any funds deposited thereafter will pay 18% annual interest in monthly increments of 1.5%,” the Nov. 18, 2010, OWOW email read in part.
In July 2010, Data Network Affiliates — another venture associated with Piccolo — said it was offering an offshore “resorts” program through a vendor. Members could buy into the purported program through a “No Interest Easy 24 Month” payment plan of of $625 a month. DNA solicited members to spend $14,995 on the resorts program, suggesting that some prospects would put the entire amount on a credit card.
Like the current TCN invitation soliciting deposits of $25,000, the OWOW email from November 2010 included an email address. Prospects with access to cash were encouraged to use the address to contact the company to discuss the offer.
Recent scams with which Piccolo has been involved — including OWOW and DNA — have featured Piccolo as a background player. Other individuals emerged as the faces of the company.
TCN has ducked questions about Piccolo. The firm lists Brett Hudson as its president. Both TCN and DNA operate in the region of Boca Raton, Fla.
DNA’s former CEO resigned within a matter of weeks in early 2010, saying that various email missives from the company were “bull” from a “backdoor guy.” Both TCN and DNA purport to operate “processing centers” in Boca Raton.
DNA’s corporate registration is listed in Nevada as dissolved. Like OWOW, Text Cash Network filed corporate paperwork in Wyoming. OWOW’s registration is listed as “delinquent” and “Inactive – Administratively Dissolved (Tax).”
OWOW effectively died in November 2011, the same month TCN was born in Wyoming, according to records. OWOW got a 10-day head start on other TCN affiliates in early November, according to web promos that explained OWOW was helping TCN test its system.
Why TCN would choose OWOW as a key, early business partner is unclear.
Another common thread among TCN, DNA and OWOW is the presence of Piccolo business associate and MLM huckster Joe Reid. TCN has accented the purported “tax” benefits of joining, something DNA also did.
Certain images will not load today on the website of JustBeenPaid, a "program" tied to JSS Tripler.
EDITOR’S NOTE: HYIP critics long have pointed out that many Internet-based schemes have members in common and that the interconnectivity of certain schemes creates a condition in which fraud proceeds circulate from scheme to scheme to scheme. Such fraud schemes can mushroom to involve tens of thousands — or even hundreds of thousands — of participants.
The logistical challenges of reverse-engineering such schemes are enormous — and it’s often the case the combined international hauls of the schemes also are enormous.
A man referenced in a JSS Tripler-related action by CONSOB, the Italian securities regulator, appears to have lost access to his U.S.-based website — and appears also to have been a pitchman for Text Cash Network, a U.S.-based “opportunity” linked to serial hucksters Joe Reid and Phil Piccolo.
TextCashNetwork purports to be an international text-advertising business involving cell phones. The “opportunity,” though, is decidedly murky. Affiliates have described Text Cash Network vaguely as “a new division of a five year old communications company owned 100% by The Johnson Group.” Other promoters have claimed it was owned by the “Johnson & Johnson Group,” a possible bid to leech off the brand of the famous pharmaceutical and consumer-products company.
TCN Promotional Tie To JSS Tripler
On Jan. 23, CONSOB announced the JSS Tripler-related action. Included in CONSOB’s statement were references to an individual named Mauro Messina and a website styled gruppounitoworld.com.
That website, which appears to have been hosted in the United States, now beams this message: “I’m sorry, but this account has been suspended.” No reason for the suspension was provided.
The message appears even though the domain registration is good through June 30, 2012, according to registration data.
The name Mauro Messina also appears on an affiliate site for Text Cash Network. The affiliate ID on the Text Cash Network site is “gruppounito” — the first 11 letters of the now-suspended site referenced in the CONSOB probe. (See comment from PP Blog reader Tony here. Kudos, Tony.)
Driven by a relentless hypefest, Text Cash Network or TCN launched late last year — with Reid leading the cheerleading as he had done previously for Data Network Affiliates (DNA), a Piccolo-associated entity that mixed and matched itself with One World One Website (OWOW), another Piccolo-associated entity.
Both DNA and OWOW appear to be defunct corporations, but appear also to maintain a web presence that in part has been used to drive traffic to TCN. Strangely, the DNA website now is publishing a “STOP SOPA” graphic, referring to antipiracy legislation in the United States that became part of well-publicized opposition campaigns by Google and Wikipedia (among others).
DNA, which claimed it was a data company with a cell-phone arm and appears never to have delivered on either count, has a history of brand leeching and divining ties to causes, including the U.S. AMBER Alert program and child poverty. Among other things, DNA — despite the fact its Nevada corporate registration is listed as “Dissolved,” asks prospects to “Help DNA Feed A Million[:] OVER 1000 AN HOUR DIE.”
It also purports that children are “The Heart Of D.N.A.,” even though the corporation is defunct and DNA received an “F” grade in 2010 from the BBB and is the subject of a BBB alert. After apparently abandoning its purported data and cell-phone arms by July 2010, DNA claimed it was morphing into the land-mine business of offshore “resorts” and “mortgage reduction.”
Like DNA, TCN purports that it has or will engage in philanthropic pursuits.
CONSOB’s Jan. 23 announcement also referenced an entity known as “Ricochet Riches” and a dotcom by the same name. On the MoneyMakerGroup Ponzi forum yesterday, a cheerleader for JSS Tripler 2 or T2 — an enterprise that appears to have appropriated the name of JSS Tripler — published an “I got paid” post for T2.
Below the post was a link to Ricochet Riches.
Incongruities that challenge description and involve both JSS Tripler and JSS Tripler 2 are occurring all over the Ponzi boards. Both JSS Tripler and JSS Tripler 2 have promoters in common. Regardless, Ponzi-board posters are pooh-poohing the CONSOB action or ignoring it — even as they champion other opportunities referenced in the CONSOB action, including Ricochet Riches.
A JSS Tripler/Club Asteria Tie
CONSOB last year took action against promoters of Club Asteria, another Ponzi-forum darling. “Andrea Viz,” another JSS Tripler promoter referenced in the CONSOB action, also has been linked to Club Asteria.
The Club Asteria promo appears on a domain styled vizconsigli.com, which is referenced in the CONSOB announcement about JSS Tripler. That domain, too, appears to be based in the United States.
Hank Neeedham, one of Club Asteria’s purported principals, formerly was a pitchman for AdSurfDaily, which the U.S. Secret Service described as an online Ponzi scheme involving at least $110 million.
Frederick Mann, the purported operator of JSS Tripler, also was an ASD pitchman, according to a 2008 promo that appeared online during the same period in which Needham — who simultaneously was promoting cash-gifting schemes — also was promoting ASD.
Over the weekend, JustBeenPaid, the entity that purportedly operates JSS Tripler through Mann, appears to have encountered website problems that are affecting its ability to publish certain graphics.
There is at least one Ponzi-forum report today about JustBeenPaid/JSS Tripler problems:
“. . . sites all messed up chat room no mods no admins little odd,” a MoneyMakerGroup poster claimed.
The JustBeenPaid site includes information attributed to Mann on AdVentures4You (ADV4U), a “program” that collapsed in 2009 amid reports its operator had been threatened.
In the remarks, Mann asserted that he made a pile of money through ADV4U prior to its collapse.
“The biggest difference between JSS-Tripler and AV4U is that JSS-Tripler is indefinitely sustainable, while AV4U had a design flaw that ensured its eventual failure,” according to the remarks attributed to Mann.
The pitchman hosting a 90-day anniversary call yesterday for Text Cash Network introduced fellow TCN pitchman Joe Reid as an “absolute legend.”
“In this industry, folks, facts tell, and stories sell,” a pitchman identified as “Eddie” said in remarks introducing Reid.
“This gentleman is a legend — an absolute legend in the industry,” Eddie said. “This gentleman makes money. This gentleman makes BIG money. He’s made millions and millions of dollars over the years in the network-marketing industry . . .”
But “Eddie” said nothing about Reid’s involvement in Data Network Affiliates (DNA) and One World One Website (OWOW), bizarre and crashed opportunities linked to Reid business associate and fellow MLM huckster Phil Piccolo amid claims that affiliates were not getting paid. Piccolo also has been linked to TCN.
Among other things, DNA claimed it could help the AMBER Alert program rescue abducted children, later claiming it offered a “free” cell phone with “unlimited” talk and text for $10 a month.
DNA appears to have assisted in the rescue of no children, but it did complain that the AMBER Alert program had a bloated budget. It later removed its cell-phone offer, claiming it had been duped into making the offer by a huckster. OWOW, for its part, claimed it had products that cured or treated cancer — while also claiming a “magnetic” product helped prevent leg amputations and helped produce tomatoes that would grow to twice their ordinary size — all while assisting dairy herds in producing more milk. (Use the search button in the upper-right corner of the PP Blog for more info on DNA and OWOW and their series of ambiguous and confounding offers.)
As he is doing now for TCN, Reid led cheers in videos or conference calls for DNA and OWOW. (TCN is using the same conference-call software as DNA.) While researching an offer by OWOW, the PP Blog was advised by the Des Moines Police Department (Iowa) that certain addresses that appeared in online promos for OWOW were nonexistent. Lower in this story, you’ll find a reference to something the Boca Raton Police Department reported after the PP Blog asked it to visit a local building.)
An Emerging Bromide
Despite “Eddie’s” assertion that “facts tell,” he provided no substantiation of his claims about Reid and offered no information on Reid’s DNA/OWOW ties, apparently preferring instead to focus on the “stories sell” part of his emerging bromide.
Reid’s story yesterday offered platitudes that “exciting things are happening” at TCN, with Reid adding that the purported text-advertising firm had “tremendous leaders” who’d created “great excitement.”
Reid, whose TCN cheerleading appeared to be somewhat subdued during the call, then passed the call back to Eddie.
Without providing any factual foundation and again apparently defaulting to the “stories sell” part of his bromide, Eddie again assured listeners that Reid was a “legend.” He added that TCN had set all of the following records:
Fastest to 10,000 members.
Fastest to 20,000 members.
Fastest to 50,000 members..
Fastest to 100,000 members.
Fastest to 200,000 members.
“And most recently, folks, we were the fastest company to 300,000 members — in under 90 days.”
Participants who weren’t excited about those numbers need to check their “pulse,” Eddie ventured, predicting later that there would be “seven-” and “six”-figure earners.
Like DNA and OWOW, strange events and incongruities have marked TCN’s existence.
The TCN Photo Mystery
Despite oddities such as the existence of a promotional photo that shows TCN’s name affixed to a glistening office building in Boca Raton and a public statement by the Boca Raton Police Department that the name is not affixed to the building, Eddie asserted that TCN is a company that “makes sense.”
TCN Tax Claims — After Similar DNA Claims
TCN also may be playing with fire by wooing recruits with claims about the purported tax advantages of joining.
“What about the tax benefits that you receive from owing a home-based business?” Eddie asked yesterday’s conference-call listeners. “You can literally bring home 3, 4, maybe $5,000 — up to $7,000 a year in tax benefits. So many people are completely unaware that, just by being a part of a home-based business, they can save thousands of dollars every year by being a part of a home-based business.
“Guess what? Join us with Text Cash Network and start saving today . . .” Eddie instructed while focusing on the purported tax advantages.
Screen shot: Like DNA, TCN puports to operate a "processing center" in Boca Raton.
Another oddity associated with TCN and DNA is that both firms
Screen shot: Like TCN, DNA purports to operate a "processing center" in Boca Raton.
claimed to operate “processing centers” in South Florida, but the addresses appear to be rental services.
Meanwhile, both TCN and DNA have OWOW — another Piccolo-associated entity — in common somewhere in the food chain.
The earliest promos (early November 2011) for TCN appeared on OWOW’s website.
Like DNA, OWOW appears to be a defunct corporation that continues to produce a website that sometimes goes missing and sometimes is rerouted to other sites.
The management structure of TCN, DNA and OWOW also has been murky, with all three firms claiming to be operated by top professionals while simultaneously publishing ambiguous information. Some TCN promoters, for instance, have claimed TCN is owned by “The Johnson Group.”
Promos that originated through OWOW, however, added an ampersand and extra proper noun, declaring that TCN was owned by the “Johnson & Johnson Group.”
Affiliates of TCN, DNA and OWOW have complained publicly about not getting paid. All three firms have explained away those concerns in largely the same fashion: that payments have come or will come once a series of launches and prelaunches and website adjustments are completed.
Each of the schemes spread in part through social-media sites such as YouTube and Facebook.
One poster on a Facebook TCN site dubbed the “Text Cash Network- Official Group Page” complained today that “power line stats” are not working.
“It stopped on the 12/28/2011,” the poster claimed.
On another Facebook site — one dubbed simply “Text Cash Network” — a poster spammed an offer for JSS Tripler. Promoters of JSS Tripler are under investigation by CONSOB, the Italian securities regulator.
From YouTube: Mr. P. prowls the stage for OWOW in 2010.
UPDATED 5:05 P.M. ET (U.S.A.) Did One World One Website Inc. (OWOW) — the Phil Piccolo-associated company that appears to have been given some of the top positions in Text Cash Network (TCN) and recruited a huge downline with the knowledge of TCN management — try to fix its own problems last year by hatching a Ponzi plan in which money sent in by new members would be used to pay commissions owed to original members?
A bizarre OWOW promo dated July 30, 2011, on Dealslinker.com suggests so. The promo, which claimed that “O.W.O.W. Management left town a long time ago” and “gave up for many reasons,” further claimed OWOW was implementing a restoration plan and suggested that the company was being run by “leaders.” The “leaders” were not identified.
Incongruously, the promo claimed that “[i]t is actually not the current O.W.O.W. that is in Financial Trouble. It is the baggage from 10/10/2010 to 3/10/2011 that has brought us down. And is a Ball and Chain around the current O.W.O.W. Team.”
“WE NEED YOUR HELP ‘OR’ THE HELP OF BRAND NEW PEOPLE…” the promo urged. “THE SOLUTION IS ‘FOUNDER OWNERSHIP’ YES… FOUNDERS…”
With those words in July, OWOW introduced a scheme by which “FOUNDER PACKAGES” would be created in four tiers (Bronze, Silver, Gold and Platinum) and sold online to right the OWOW ship. The purported packages were priced between $500 and $5,000, and purchasers who bought in at the $5,000 level were promised they would get “20 shares in a (sic) 5% of The Sales Profit Pool from 8/8/11 to 12/12/12 of The O.W.O.W. Program…”
The claim leads to questions about whether OWOW was offering unregistered securities as investment contracts and effectively creating an investment pool while using unregistered broker-dealers to sell the offer.
Purchasers who bought in at the lower-priced tiers were promised a smaller number of shares, according to the promo. Members at the $500 level would get one share; members at $1,000 and $2,500 levels would get three shares and 10 shares, respectively.
Despite the claim that OWOW’s profits would be shared among certain members through Dec. 12, 2012, the business registration in Wyoming of One World One Website Inc. is listed as “Inactive – Administratively Dissolved (Tax).”
Whether OWOW sold any of the purported packages referenced in the July 2011 promo is unclear. But about three months later — during the opening days of November 2011 and while OWOW apparently was still reeling — OWOW appears to have been given a 10-day head start to sell TCN.
Some TCN members now say that TCN has delayed commission payments to members for a fourth time and that members have been encouraged to send money via Western Union and money orders to both the company and individuals associated with the firm.
A pulldown menu on TCN’s website says money can be sent via Western Union to three individuals: Tyler Johnson, Brett Hudson or Jane Johnson. TCN purports to have hundreds of thousands of members globally.
Brett Hudson is listed on TCN’s website as the firm’s president. TCN purports to operate from Boca Raton, Fla. OWOW and another Piccolo-associated entity know as Data Network Affiliates (DNA) also purported to operate from Boca Raton and environs. The Better Business Bureau issued an alert about DNA in 2010.
Why TCN is asking members to send funds to individuals via Western Union is unclear.
TCN purportedly is owned by “The Johnson Group,” although descriptions about that company have been vague and ambiguous.
Here is what TCN says about itself:
“Text Cash Network Inc is a USA Corporation and is own (sic) 100% by a five year old communication company which is another USA Corporation owned by The Johnson Group. We have not disclosed the communication’s company name or contact information in fear that THOUSANDS OF AGENTS may or should we say would call them for information prior to our official launch of 12/12/2011.”
The date TCN advertised as its launch date — Dec. 12, 2011 — was precisely one year ahead of the date through which OWOW promised to pay tiered members who purchased shares in a pooling arrangement: Dec. 12, 2012.
Curiously, TCN promoters associated with OWOW added an ampersand and extra proper noun to the name of TCN’s purported ownership group, describing TCN’s owners as the “Johnson & Johnson Group.”
Whether the addition of the ampersand and extra proper noun was a bid to trade on the name of Johnson & Johnson, the New Jersey-based Dow and S&P 500 component, is unclear. TCN came out of the gate trading on the name of Groupon, but a Groupon logo that once appeared on the site has been removed.
Returning to the subject of OWOW, money from the purported OWOW “FOUNDER PACKAGES” would be used in part to “pay off all of the past commissions and money owed to suppliers,” according to the bizarre OWOW promo, which was attributed to “Mister P.”
“Mister P” is an alias used by Phil Piccolo. Strangely, though, the OWOW promo was positioned as a “personal letter from J.P. aka Mister P.” Why the initials “J.P.” were used is unclear.
Other Oddities
The July 2011 OWOW promo referenced in this post appears to be a bid to sell both OWOW and a program known as ThatFreeThing. Indeed, the headline on the promo reads, “OWOW Wholesale Direct and MyFreething – ThatFreeThing.”
Despite the headline reference to That Free Thing, the promo does not contain a link to the That Free Thing program.
That Free Thing uses an address in Westminster, Colo., and publishes a picture of an office building with the name of the company affixed in large letters to the side of the building.
TCN promos have featured images of a building in Boca Raton with the company’s name affixed in large letters near the crown of the building. The Boca Raton Police Department said on Dec. 14 that TCN’s name was not affixed to the building — despite what promoters led recruits to believe.
“Mister P,” meanwhile, also is referenced in a promo for something called “MY FREE EVERYTHING,” which appears to be operating through a domain styled “TheDebtFreeCard.com.”
Visitors to that site are told about a “100% PASSIVE!” program through which they can earn through the sale of “$50,000 to $250,000 JVP FOUNDER LOAN PACKAGES.” Like the OWOW promo, the My Free Everything promo raises questions about whether the purported firm is selling unregistered securities as investment contracts and whether promoters are serving as unregistered broker-dealers.
Amid confusing claims on the site, visitors are told this: “If you are within 10 Levels of This Sale you will EARN IMMEDIATE MONEY… $500 to $2500… or If you personally sell one $5000 to $25,000… However THE BIG PICTURE will be THE RESIDUAL INCOME because THE SALE was made in YOUR DOWNLINE… There are many DOCTORS and OTHER PROFESSIONALS looking for PASSIVE INCOMES… All you do is FIND THEM and The Leadership SELL THEM… ”
Separately, promos for OWOW on LinkedIn are asking viewers to visit a YouTube site to “see [an] Oprah” video on OWOW.
When a link in the LinkedIn promo for OWOW is clicked, however, visitors are taken to a video that has nothing to do with Oprah Winfrey, the entertainment icon and business titan whose name often is appropriated by MLM hucksters and affiliates unwise to their ways.
Instead, the video is about a product known as PhoneGuard, an app that purportedly keeps teens and children safe by shutting off a cell phone’s texting capacity while they’re in automobiles.
See this story about DNA, another Piccolo-associated program that used Winfrey’s name. DNA purported to have ties to Anthony Sasso, who was described as DNA’s data expert and a “special board consultant.”
Sasso, who reportedly once had a role in PhoneGuard, is a convicted felon who was charged in a South Florida racketeering case. DNA, the Piccolo-associated entity, hyped him as “The King Of Data For Dollars” and Sasso was said to be the “owner of the largest database of text numbers in the world.”
Some affiliates have claimed Text Cash Network (TCN) is part of a company known as “The Johnson Group.” Others have added an ampersand and mimicked the name of an internationally famous company, saying TCN is part of the “Johnson & Johnson Group.”
Now, yet another TCN flap involving a company name is emerging. The name appeared on TCN’s purchase-agreement page in recent days.
“I understand that this agreement may not be transferred or assigned without prior written consent of REX Venture Group, LLC a/k/a/ T.C.N..com (sic), which consent shall not be unreasonably denied,” the TCN purchase-agreement page read in part on Dec. 22, according to Google cache. The language appeared below a clause labeled “ASSIGNMENT.”
Largely the same language appears on a page for a program known as Zeek Rewards, which leads to questions about whether TCN had copied the language and swapped in the name of its own company without consent.
But the name of REX Venture Group no longer appears on the purchase-agreement page of TCN’s website, and the “ASSIGNMENT” clause has been reworded to read, “I understand that this agreement may not be transferred or assigned without prior written consent of Text Cash Network, inc. a/k/a T.C.N., which consent shall not be unreasonably denied.”
It is unclear when the changes were made.
TCN has claimed to employ an “attorney,” but does not name the attorney. It also has claimed to use a “host of traditional domestic and international legal representatives.”
Whether TCN consulted the purported attorney and the purported “host of traditional domestic and international legal representatives” before posting the assignment clause — and later editing it — is unclear. Also unclear is whether TCN ever consulted with the Rex Venture Group, the firm whose name now has been deleted from TCN’s purported assignment clause.
Why TCN claimed it also was known as the Rex Venture Group also is unclear.
TCN has promotional links to Ponzi scheme boards and to MLM huckster Phil Piccolo and Piccolo-associated firms such as Data Network Affiliates (DNA) and OWOW, which stands for “One World One Website.”
Significant incongruities and vagueness over TCN’s ownership structure have marked promotions for TCN. Similar incongruities marked promos for DNA and OWOW.
1.
Google took a cache shot of TCN's purchase-agreement page on Dec. 22. Here is a screen shot of part of the page, which shows the name of REX Venture Group LLC. The name no longer appears on the page, leading to questions about whether TCN had simply copied-and-pasted terms from another MLM opportunity.
2.
Section from TCN's purchase-agreement page as it appeared on Dec. 27. The section has been reworded, and the name of REX Venture Group LLC has been removed.
AutoXten came out of the gate during the summer, amid claims $10 could turn into nearly $200,000. Promos claimed the "opportunity" was using Canada-based AlertPay to avoid PayPal restrictions and that AutoXten was suited for "churches."
AutoXTen, the absurd matrix cycler that came to life this summer even as the state of Oregon was issuing a public warning against pyramid schemes and ordering a $345,000 penalty against a cycler pitchman, has gone missing.
The AutoXTen website is registered in the name of Jeff Long, an MLM huckster who sang the praises in 2010 of both the Narc That Car (NTC) and Data Network Affiliates (DNA) license-plate schemes before abandoning both programs and warning his followers to “Stay away from ‘EZ MONEY’ pitches and claims.”
Long, though, appeared not to have followed his own advice. After the failures of Narc That Car and DNA, AutoXTen came out of the gate with a claim that members could “Turn $10 into $199,240.”
Prior to the apparent collapse of AutoXTen, remarks attributed to Long on the AutoXTen help desk claimed the program was appropriate for “churches.” DNA made similar claims about one of its “programs” last year.
In 2010, Jeff Long's YouTube video for Narc That Car was referenced by Fox News 11 in Los Angeles as part of the station's Narc coverage. The original Narc video was repurposed by Long into a YouTube text pitch for DNA, but later edited to insert an announcement Long had left both Narc and DNA.
DNA’s website also has gone missing. The DNA program was associated with MLM huckster Phil Piccolo, as was a program known as One World One Website (OWOW). OWOW emerged last month as a launch ground for the emerging Text Cash Network (TCN) scheme.
Despite the appearance online of a photo of a glistening building in Boca Raton, Fla., with the words “TEXT CASH NETWORK” affixed in large letters near the crown of the building, the Boca Raton Police Department said Wednesday that the company’s name does not appear on the building.
Questions have been raised about whether Long performs any due diligence on the “opportunities” he embraces or blindly defaults to the company line or manufactures a convenient truth while recruiting participants by the hundreds into scheme after scheme.
Long was among the conference-call cheerleaders for DNA, along with Joe Reid, who went on to become a cheerleader for TCN.
Reid also was a cheerleader for OWOW, a company Piccolo positioned as the provider of a “magnetic” product that could prevent leg amputations and help tomatoes grow to twice their normal size.
This video in which Jeff Long was driving an automobile and pitching the MLM license-plate schemes of DNA and Narc That Car was edited to insert the red balloon and annoucement from Long that he had dumped both DNA and Narc — and to warn prospects to stay away from "EZ MONEY'" MLM schemes. Long then turned to AutoXTen amid claims the firm's matrix cycler could turn $10 into nearly $200,000 and was appropriate for "churches."
Whether Long participated in OWOW and TCN was not immediately clear. What is clear is that the AutoXTen website is not resolving to a server only months after the purported miracle program’s launch.
When pinged, both the AutoXten and DNA websites are returning this message: “Unknown error: 1214.”
Both NTC and DNA carded scores of “F” from the Better Business Bureau. Some NTC members then attacked the BBB, and DNA changed the name of one of its purported offerings to “BBB” in an apparent bid to trick search engines.
AutoXTen was hawked in part through posts on Ponzi forums such as TalkGold and MoneyMakerGroup.
AutoXTen gained a head of steam in part through promos by well-known Ponzi forum pitchmen “Ken Russo” (as “DRdave”), and “manolo,” both of whom also promoted Club Asteria.
Club Asteria, which purports to have a philanthropic arm, suspended member payouts months ago and acknowledged its PayPal account had been suspended.
An AutoXTen email attributed to Long, Scott Chandler and Brent Robinson as the opportunity’s “Founders/Owners” also shows the firm traded on U.S. patriotism.
“This weekend here in the United States of America, we celebrate our freedom and independence as a nation and a Country,” the email read in part. The email was posted on the TalkGold Ponzi forum by “manolo” on July 1, 2011, during the run-up to the Independence Day holiday in the United States.
“We want to wish EVERYONE a HAPPY Independence weekend, please be safe, have fun and as you are celebrating, know that you are also celebrating your new life should you choose to step into it here with AutoXTen!” another part of the email exclaimed.
