2ND UPDATE 3:23 P.M. ET U.S.A. In another swipe at Herbalife and perhaps MLM recruiting schemes in general, activist investor Bill Ackman says he’s out to combat pyramid schemes by creating one himself.
Ackman’s apparent tongue-in-cheek approach adopts a typical “tell five” MLM marketing technique as part of a bid to create Internet virality for a video released last week that is designed to educate the public about pyramid schemes. The video is available in English and Spanish. It was produced by Ackman’s Pershing Square Capital Management LP.
“This video will help consumers avoid being defrauded,” Ackman said today in a news release issued through BusinessWire. “I encourage you to send it to five friends and encourage them to send it to five friends who can send it to five friends and so on, and we can fight pyramids with our own pyramid.”
BusinessWire is a subsidiary of Berkshire Hathaway, the Warren Buffett-led company that also owns Pampered Chef, an MLM company. Pershing Square previously has used BusinessWire to spread Ackman’s long-running contention that Herbalife is a pyramid scheme that incentivizes recruits to gather more recruits.
Buffett’s name has been used in any number of promos for commission-based MLM or network-marketing schemes, even when the legendary investor has no ties to the “opportunity” being promoted. The disingenuous message has been that Buffett’s corporate interest in Pampered Chef means that all MLM schemes pass muster.
In 2011, Buffett’s image was hijacked by the JSSTripler/JustBeenPaid scheme, a Ponzi-board “program” with possible ties to the “sovereign citizen” movement. Earlier, in 2010, Buffett’s image was appropriated by MPBToday, a “get two” MLM “program.”
As the PP Blog reported last week, Ackman’s video also channels an approach used by promoters of TelexFree, an alleged Ponzi/pyramid scam that may have gathered more than $1.2 billion in about two years of operation. The video also may provide a subtle reminder of Zeek Rewards, an MLM venture and alleged Ponzi/pyramid scheme that traded on images of the American Flag on its way to raising about $897 million in less than two years.
Ackman’s video also shows a representation of the American Flag, suggesting that franchise companies such as Burger King, H&R Block and Midas legitimately are part of the American Dream but that MLM schemes such as Herbalife may not be.
“Some of the start-your-own business offers you’ll see are legitimate opportunities,” according to the narration in the Ackman video. “But some are scams, designed to take advantage of you.”
Herbalife is not mentioned in the video, but one of the animated characters looks suspiciously like Herbalife CEO Michael O. Johnson.
The accompanying news release from Ackman does mention Herbalife, noting that “Funds managed by Pershing Square are short the stock of Herbalife Ltd and own put options on the Company. Pershing Square may increase, decrease, dispose of, or change the form of its investment in Herbalife for any or no reason, at any time.”
One of the frames from the "Mr. Spock" promo for JustBeenPaid.Another frame from the promo.
UPDATE: The PP Blog reported here that Warren Buffett had become an unknowing pitchman for the global JustBeenPaid Ponzi scheme whose promoters also pushed the AdSurfDaily Ponzi scheme on the public.
Meanwhile, the Blog reported here that Oprah Winfrey had met the same fate at the hands of the JustBeenPaid henchmen.
The Blog now is reporting that “Mr. Spock,” one of the fictional characters on the Star Trek television and movie series, also has become an unknowing Just Been Paid pitchman. Spock was portrayed by Leonard Nimoy.
The images of “Mr. Spock” and Winfrey are hosted on JustBeenPaid’s server, the Blog has confirmed. Each photo file has a separate name. The files are contained within publicly accessible folders on the JustBeenPaid website. The images of Buffett are hosted on YouTube.
JustBeenPaid’s website also houses an image of American icon Benjamin Franklin. The image is in the same publicly accessible folder that serves the images of Winfrey and “Mr. Spock.” The server for JustBeenPaid appears to be located in Texas, although the domain registration uses a street address in South Africa.
Frederick Mann is listed as the registrant contact for JustBeenPaid.
Earlier today, the PP Blog reported that the purported Club Asteria “program” was using a quote by the assassinated Indian leader Mahatma Gandhi to drive traffic to the Club Asteria scheme. An image of famed businessman Richard Branson also appears in this month’s Club Asteria house organ.
Screen shot: Neither of these two YouTube videos for JustBeenPaid will load on a site associated with the purported "opportunity" — but a repurposed video featuring billionaire investor Warren Buffett will. It is common in fraud schemes for scammers to trade on the names of celebrities and to suggest a famous person endorses a "program."
There are the deliberate shills for JustBeenPaid — serial Ponzi board hucksters such as “10BucksUp,” for example.
And there are the unwitting shills whose celebrity is stolen without their knowledge to sanitize the over-the-top fraud that promotes absurd returns — people such as famed investor Warren Buffett. Buffett’s only tie to JustBeenPaid is that he lives and breathes on the same planet occupied by the collective of international scammers behind the purported “opportunity.”
A YouTube video in which Buffett is giving a speech to a group of Florida MBA students is shoehorned into a JustBeenPaid promo at BigBooster.com. As Buffett arrives at the podium, he makes sure the microphone is working.
“Testing,” he quips. “One million, two million, three million.”
The audience appreciates the line.
Buffett’s repurposed appearance sandwiched into the JustBeenPaid promo at BigBooster.com is one filled with irony that is the very definition of bizarre. As this post is being written, it is the only video on the page that works. Two in-house videos for JustBeenPaid do not work and carry these messages:
“This video is no longer available because the YouTube account associated with this video has been terminated.”
“This video has been removed because its content violated YouTube’s Terms of Service.”
This YouTube video of famed investor Warren Buffett is playing in a promo for JustBeenPaid on a website known as BigBooster.com.
But the repurposed video of Buffett is every bit as dangerous as it is bizarre: It is being used to help the JustBeenPaid Ponzi scheme proliferate globally. And the people behind JustBeenPaid once promoted AdSurfDaily before the U.S. Secret Service exposed the ASD Ponzi scheme in August 2008. (See graphic near bottom of story.)
To its credit, YouTube has been removing JustBeenPaid videos at least for several days. But even as YouTube does the right thing by taking the videos offline in the age of epidemic white-collar crime and global money-laundering and Ponzi theft, the video of Buffett still plays on the BigBooster site. The likely reason is that there is no easy way for YouTube to associate Buffett’s 13-year-old speech at the University of Florida to a relatively recent BigBooster.com ad for JustBeenPaid, a “program” of recent vintage.
Research by the PP Blog suggests Buffett delivered the speech on Oct. 15, 1998 — when Saddam Hussein still was presiding over Iraq and George W. Bush still was governor of Texas before being elected President of the United States more than two years later. A decade passed — as did the 9/11 terrorist attacks, Bush’s eight-year occupancy of the White House and the fall of Saddam Hussein — before the people behind JustBeenPaid apparently had the brainstorm of shoehorning the Buffett video into the BigBooster promo to help them sell a scam.
YouTube’s removal of the JustBeenPaid videos poses only a minor hurdle, according to an email attributed to JustBeenPaid honcho Frederick Mann, who’s also the apparent braintrust behind BigBooster.com and a former ASD member.
“We’ve started moving our videos to our own server,” the JustBeenPaid email attributed to Mann read in part.
BigBooster.com appears to be hosted in South Africa; JustBeenPaid.com appears to be hosted in the United States. Both domains use a street addresses in South Africa that lists Mann as the administrative contact.
Here is some of the advice attributed to Mann in the BigBooster.com promo associated with JustBeenPaid and related “programs.” (Italics added.)
Get in early.
Get in with “significant” money
If the program performs well, do some early compounding.
Sponsor as many people as possible to earn referral fees.
Withdraw your original risk capital as soon as appropriate to get into a “can’t-lose” position.
Parlay, compound, or let run some of your profits.
Think in terms of maximizing the money you “take off the table.”
Much of the power of this formula is that it enables you to make money with programs that fail after a few months, but if a reasonably good program lasts 6 months or longer, you could earn tens of thousands.
The message could not be more at odds with the principles for which Buffett stands, and yet Mann and JustBeenPaid incongruously sandwich him into the promo after previously leading ASD recruits to disaster.
And even as JustBeenPaid tells members it is saying goodbye to Google’s YouTube, is is encouraging members to register for the “program” by using a Google Gmail addresses.
“Gmail E-mail addresses work well with JustBeenPaid! – and they are free!” the firm informs prospects on its sign-up page.
But it gets stranger yet: Payouts from JustBeenPaid come from an email address assigned to “michael” on the BigBooster.com domain, according to “I got paid” posts by shills on the Ponzi forums such as MoneyMakerGroup.
Not “JustBeenPaid” or “Frederick” — but “michael.”
And the cheerleaders and shills cheer on, even as a condition has developed in which the program is trying to rescue itself from collapse, offshore servers apparently are being brought into play — and the money is being routed from AlertPay in Canada to a murky business with footprints in both the United States and South Africa and the “opportunity” just happens to be trading on the name of Warren Buffett after previously pushing traffic to ASD.
This is happening through a process by which a 13-year-old speech by the billionaire has been repurposed and made to load on the BigBooster site via YouTube — even as JustBeenBeen can’t get its own YouTube videos to load and even as it apparently is saying goodbye to YouTube while encouraging people to use Google Gmail addresses to sign up so they purportedly can get paid by “michael” at BigBooster.com for JustBeenPaid.
Like JustBeenPaid, ASD had a tie to AlertPay. And ASD and a spinoff surf known as AdViewGlobal also used Gmail addresses and relied on videos to spread the scheme.
On May 14, 2008, according to research by the PP Blog, ASD was touted on BigBooster.com as a “cash cow.” Less than three months later, the U.S. Secret Service alleged that ASD was an international Ponzi scheme that had sucked in tens of millions of dollars, routed money through Canada and was contemplating ways to get offshore.
“I (Frederick Mann) have been with ASD since January 07,” remarks attributed to Mann on the BigBooster site read. “Past performance indicates a strong probablility (sic) that ASD will continue to perform as advertised. (By early May 2008, I had received 14 payments totalling over $6,000!”)
On May 14, 2008, BigBooster.com was touting AdSurfDaily.
Screen shot: Even as JustBeenPaid concedes YouTube is removing its videos, the "opportunity" is encouraging prospects to register by using a free Gmail addresss. Google owns both YouTube and Gmail. Payments for JustBeenPaid are being routed through Canada-based AlertPay by a person apparently known as "michael" of BigBooster.com. Both BigBooster.com and JustBeenPaid.com use street addresses in South Africa, and the linked companies appear also to have a presence in the United States. (Red rectangle around Gmail's name and red block of sponsor's name added by PP Blog.)
SCREEN SHOT OF SECTION OF OCT. 25, 2010, FINDINGS OF FACT: M25 and M37 used a "chart" projecting magnificent earnings and encouraged investors to roll over their returns by plying them with a purported "renewal bonus." After 11 years, $100,000 would turn into $1 million, according to the firms' claims. The firms also claimed they outperformed legendary investor Warren Buffett, according to uncontested findings of fact by U.S. District Judge Barbara M. G. Lynn. It is common in online fraud schemes for pitchmen to use charts and spreadsheets that promise spectacular returns. It also is common for scammers to trade on the name of Warren Buffett or other well-known business titans as a means showing off, sanitizing fraud schemes and gaining "legitimacy" by osmosis. (Red Emphasis added by PP Blog.)
EDITOR’S NOTE: The cases against M25 Investments Inc. (M25) and M37 Investments LLC (M37) include elements that are common in online fraud schemes. For starters, the offers were targeted at senior citizens and people of faith. Moreover, the firms relied on PowerPoint presentations and charts that wowed victims with tales of fantastic earnings. The fraud schemes also traded on the name of a celebrity — in this case, famed investor Warren Buffett.
Much of the information in the story below comes from uncontested findings of fact by a federal judge. Taken line by line, the CFTC’s allegations upon which the judicial findings were based paint a picture of the sort of fraudulent sales pitches that occur daily on the Ponzi forums and personal websites of hucksters. Spreadsheets that show fabulous earnings projections are in common use in the universe of fraudsters, for instance. So is the use of the name of a celebrity or famous company to sanitize a scheme and disarm skeptics.
And appeals to faith are used daily online to separate Believers from their money.
Even as this story is being published, members of Club Asteria are doing the sorts of things that led to a two-year legal quagmire for M25 and M37, a litigation nightmare the firms brought on themselves by relying on cheerleaders to drive business, engaging in affinity fraud and then trying to cover it up, according to court filings.
Club Asteria members, for example, are using spreadsheets and earnings charts to lure prospects. Meanwhile, they’re trading on the name of the World Bank, citing guaranteed earnings, mixing in appeals to charity and using religious imagery to drive business to the Virginia-based firm . . .
Two Texas firms that targeted a Forex Ponzi scheme at elderly people of faith and others in at least four states have had their registrations revoked by the Commodity Futures Trading Commission.
The revocations against M25 Investments Inc. (M25) and M37 Investments LLC (M37) of Waxahachie mean that the firms no longer are registered Commodity Trading Advisors. CFTC’s issuance of the revocations follows on the heels of an administrative action the agency filed in February. The CFTC also sued the firms in federal court two years ago, gaining restitution and penalties of more than $16 million.
An administrative law judge found the firms “unfit for registration” last month. Neither firm contested the administrative action.
On Oct. 25, 2010, U.S. District Judge Barbara M. G. Lynn found that the firms operated a Ponzi scheme that gained a head of steam by luring customers with promissory notes that guaranteed interest payments of 2 percent a month or 24 percent a year.
Neither M25 nor M37 contested the findings. Both firms agreed to an issuance of a consent order with specified penalties and a demand for restitution. The firms neither admitted nor denied the allegations.
Business was solicited online and through word-of-mouth, and clients often did not even know the difference between the two firms, Lynn ruled.
“Some or all” of the firms’ customers were unqualified investors who did not have the required millions of dollars of assets to become an “eligible contract participant,” the judge ruled.
Sales pitches for both firms claimed the ability to outperform famed investor Warren Buffett while making ancillary claims the companies could turn $100,000 into $1 million if customers stayed with them for 11 years and plowed their interest payments and annual renewal bonuses of 2 percent back into the companies.
The scheme gathered about $8 million from about 213 customers, the judge ruled, noting that company “representatives” solicited business after church services and in customers’ homes.
On March 31, 2009, according to the judge’s uncontested findings of fact, the firms owed customers $7.6 million but had only $3.9 million in total assets. Investors were shielded from the news and issued false account statements showing gains.
