Quantcast
Channel: A (MLM) Skeptic
Viewing all 572 articles
Browse latest View live

(UPDATE) BREAKING NEWS: Wife of Carlos Wanzeler, TelexFree fugitive, arrested at airport, denied bail

$
0
0

Boston Globe has learned that Katia Wanzeler, wife of Carlos Wanzeler, and alleged recipient of at least one cashier's check found in TelexFree, was detained and arrested at an airport (presumably, Boston Logan Intl John F. Kennedy Intl in New York)


Carlos Wanzeler has left the country several weeks ago, without informing his attorney. US DOJ considers Carlos Wanzeler a fugitive and apparently a warrant for his arrest had been issued.

James Merrill, co-owner of TelexFree, was already arrested last week.

UPDATE: According to affidavits filed with the court by Homeland Security, Katia Wanzeler's one-way ticket was purchased in cash by "someone in Brazil" (presumably, Carlos?)   Katia was detained as "material witness" by Homeland Security. According to Katia Wanzeler, Carlos Wanzeler and daughter (?) Livia Wanzeler drove to Canada on the day of the raid by HSI/ICE/FBI/whoknowswhatelese on TelexFree office, and from there, flown to Brazil.

UPDATE 2: According to reports cited by BehindMLM, Katia Wanzeler was denied bail (which means she's indeed ARRESTED, not merely detained), as she's found at JFK with $3000 USD in cash, as well as FOUR fully loaded suitcases (70 pounds each?) AND one-way plane ticket to Rio de Jainero, Brazil. Her lawyer tried to argue that she's merely going for a visit with clothes for relatives, and will return in 1 week. The judge did not accept that explanation, and bail was denied as she's a flight risk.

According to affidavit filed earlier by Federal agents, Katia earlier, when questioned by agents who served a search warrant on the Wanzeler residence along with on TelexFree HQ, claimed that her husband is staying at a hotel, when in fact her husband, along with daughter Livia, drove north into Canada and caught a plane there to Brazil when situation turned dire. This raises the possibility of Katia being charged with obstruction of justice / impeding active Federal investigation later by USDOJ.

IN RELATED NEWS: James Merrill, the TelexFree co-owner that's currently in custody, has his bail also denied due to possible flight risk.

http://behindmlm.com/companies/telexfree/wanzelers-wife-arrested-denied-bail-and-in-tears
http://www.nydailynews.com/news/national/wife-accused-billion-dollar-ponzi-schemer-fly-brazil-feds-article-1.1794070
http://wwlp.com/2014/05/15/ny-judge-jails-wife-in-mass-fraud-scheme/
http://www.bostonglobe.com/business/2014/05/15/bmw-ride-quebec-flight-sao-paulo-delivered-telexfree-owner-refuge-from-authorities-his-wife-and-business-partner-are-custody/zxGZI8Lvrlp9DccSVtyaCO/story.html

If your name is among the "TelexFree 8", don't try to leave town.

Enhanced by Zemanta

TelexFree News Update 16-MAY-2014: Merrill will stay in jail for now; No News on Wanzeler; Possible Reload Scam Charged

$
0
0
According to Boston Globe, James Merrill was remanded into custody of DOJ after spending several days in a Federal facility in Rhode Island. At the bail hearing, Merrill's lawyer and wife affirmed their opinion that Merrill was not a flight risk and they are willing to sign over the deed of their house as security bond. On the other hand, DOJ lawyers stated that this may be the largest Ponzi scheme DOJ had ever charged in terms of possible victims and they simply can't take the risk should Merrill bolt (like a rabbit).

The judge has continued the case until Tuesday. Merrill will remain in Federal custody until then.

http://www.bostonglobe.com/business/2014/05/16/telexfree-owner-sent-back-jail-for-weekend/9UVXjaCdqx1M83VR8dAlDO/story.html


There currently is no further news on the Wanzeler or the other alleged co-conspirators, after Wanzeler's wife Katia Wanzeler was taken into custody... at JFK Airport (New York) with 4 suitcases (full?) and 3000 in cash... and a one-way ticket to Rio de Jainero, Brazil purchased for her FROM Brazil... who paid cash.  She's being held as material witness... without bail, as she's considered a flight risk.

http://amlmskeptic.blogspot.com/2014/05/breaking-news-wife-of-carlos-wanzeler.html

And it's already reported here that Wings Network, which "voluntarily shut down", was charged next day by Massachusetts SecState Bill Galvin as a possible reload scam following TelexFree. In a press release, Galvin stated that his investigators are now aware of a group of promoters and scams that targets the same group of victims over and over, and he will likely investigate even deeper to protect the citizens of the commonwealth of Massachusetts.

http://amlmskeptic.blogspot.com/2014/05/breaking-news-massachusetts-charged.html





And the following is a public service announcement from the SEC and MLMSkeptic in Spanish
Washington, D.C., Abril 17, 2014 — La Comisión de Valores y Bolsa de Comercio (SEC) anunció hoy que el martes presentó cargos en contra de los operadores con sede en Massachusetts de un gran esquema piramidal que estaba dirigido principalmente a inmigrantes brasileros y dominicanos en los EEUU. Estos cargos se presentaron formalmente, en conexión con la solicitud de la Comisión por un congelamiento inmediato de activos. Dicho congelamiento de activos, que el Tribunal de Distrito de los EEUU en Boston ordenó el miércoles, aseguró millones de dólares de fondos e impidió la disipación potencial de activos de inversionistas. Luego de que el personal de la SEC implementó el congelamiento de activos, el tribunal quitó el sello hoy a solicitud de la SEC, permitiendo el anuncio público de los cargos de la SEC.
Si quieres leer todo el articulo, por favor click aqui:  http://www.sec.gov/enforce/Article/telexfree-press-release-and-complaint-spanish-version.html  Ha habido muchas mentiras dichas por los partidarios de la TelexFree. Lea la evidencia de que la SEC tiene y luego decidir quién está mintiendo.


And the same message, again, in Portuguese, from SEC and MLMSkeptic:
Washington, D.C., Abril 17, 2014 — A Comissão De Valores Mobiliários anunciou hoje que na terça-feira que apresentou acusações contra os operadores baseados em Massachusetts de um grande esquema de pirâmide direcionados principalmente os imigrantes dominicanos e brasileiros nos EUA. As acusações foram arquivadas sob sigilo, em conexão com o pedido da Comissão para um congelamento imediato de bens. Esse congelamento de bens, que o Tribunal Distrital dos EUA em Boston ordenou na quarta-feira, garantiu milhões de dólares de fundos e impediu a dissipação potencial dos ativos de investidores. Após a equipe da SEC ter implementado o congelamento de bens, a pedido da SEC o tribunal levantou o sigilo hoje, permitindo o anúncio público das acusações da SEC.
Se você quiser continuar lendo, clique aqui:  http://www.sec.gov/enforce/Article/telexfree-press-release-and-complaint-portuguese-version.html  Houve muitas mentiras faladas por partidários do Telexfree. Leia a evidência de que a SEC tem e, em seguida, decidir quem está mentindo para você.



Enhanced by Zemanta

How Does a Scammer Identify Your Needs and Scam You with Them?

$
0
0
Scammers are excellent psychological manipulators who can identify your needs and scam you with them by exploiting your needs as weaknesses. But how do they do it?

Abraham Maslow, who's a famous pscychologist, created the Maslow Hierarchy of Needs in the 1940's. It can be roughly represented as the diagram below, starting from physiological needs at the bottom, go slowly up to group psychological needs, then finally to self-psychological needs. Self-actualization means you fully realize the power of yourself and reach your full potential.
Maslow's Hierarchy of Needs (source: Wikipedia)

Noticed any trends? That's right, scams don't want you to actually get to "self-actualization".  They claim they will provide:
  • Safety -- aka "financial independence", "fire your boss", JOB = "just over broke", etc. 
  • Love / belonging -- your sales group / team is what you want, not your family and friends
  • Esteem -- if you follow the system, you can get $$$ and esteem! Look at our "winners"!
But what do they ACTUALLY provide? 


In reality, all of the needs are provided only with a caveat, if at all

  • Safety? Hand over your money first. This is not a "job", this is an OPPORTUNITY! You can't win if you don't play! (Never mind the cost)  Oh, and if you fail, it's your fault. Our system's perfect (for me). 
  • Love and belonging? Sure, our group will love you... until you fail. Then it's a huge shaming machine. And don't you ever try to quit. NEVER! And any one who's not in the system is either an enemy or a prospect to be recruited. So ignore your enemies (even if they're your best friends, family, or even spouse/partner). 
  • Esteem? You don't have any now except what I choose to share with you. Bask in my halo!  You have to fake it to make it! Spend your credit cards! Invest in yourself! (If you can't make any money, don't come to me, I just give advice, you must be really lazy to fail)

What's worse, they don't want you to have any self-actualization. NONE!
  • Morality?  Nah. My scheme cannot be a scam. God created it! 
  • Creativity? What creativity? Follow the system! You don't need creativity! 
  • Spontaneity? You're not following the script! Follow the system! Repeat after me...
  • Problem solving? There is no problem. Our great system is infallible! 
  • Lack of prejudice? Our system is the one, the only, the greatest. I am prejudiced for us!
  • Acceptance of facts? Only of the facts that "we" provide. Everything else is "negavitity"
Many scams present themselves as changing the lives of people who joined it. But is it really change for the better... or worse?  How can schemes that goes AGAINST self-actualization be good for you? 

Or are you too worried about your more basic needs to realize the truth and accept facts, such as "scams are bad for you"? 



Enhanced by Zemanta

BREAKING NEWS: TelexFree co-owner James Merrill bail denied, will stay in Federal Jail

$
0
0
News just broke that the judge has denied bail to TelexFree co-owner James Merrill, despite promises of him and his wife to surrender passports and put down deed to their house as security bond.

Judge cited that Merrill still have access to many accounts not yet frozen in areas outside of US jurisdiction, and it is possible other top promoters, not charged yet still sympathetic to TelexFree, may choose to hide him and/or help him escape should bail be allowed. Perhaps even Carlos Wanzeler, believed to be in Brazil and considered a fugitive by USDOJ, may help him escape.

MLMSkeptic points out that Carlos Wanzeler is believed to have tried to help Katia Wanzeler, his wife, escape the US buy buying her a one-way ticket to Brazil. She was caught at the airport with 4 suitcases and 3000 in cash... and not Boston airport but further north, JFK Airport in New York. It was believed that Carlos Wanzeler himself have left the country LAST MONTH by driving into Canada.

Merrill's lawyer vowed to appeal the decision.

http://www.telegram.com/article/20140520/NEWS/305209476/1116#.U3u9fm5VYdU.twitter
Enhanced by Zemanta

News Update 21-MAY-2014: James Merrill in jail, Merrill's Brother Subpoenased, Wanzeler spotted in Brazil

$
0
0
James Merrill Bail Denied

As reported yesterday, James Merrill, co-owner of TelexFree and now subject of criminal investigation by US Department of Justice, has his bail denied by magistrate as he's deemed a flight risk despite promise to surrender passport and/or surrender deed of his home.

http://amlmskeptic.blogspot.com/2014/05/breaking-news-telexfree-co-owner-james.html


James brother John Merrill subpoenaed by Massachusetts Secretary of State

Boston Globe has just reported that the Mass SecState Bill Galvin has subpoenaed James Merrill's brother, John Merrill, head of Fidelity Bank, for an interview, believed to be involving TelexFree and James Merrill.

While Fidelity Bank was among the various banks that TelexFree had a financial relationship with, Worchester Biz Journal reported that a spokesman in Bill Galvin's office confirmed that this is about whether John Merrill has any personal knowledge or involvement with TelexFree, instead of a bank relationship.

A Fidelity Bank spokesperson has stated that John Merrill have no statement at this time, and neither does the bank except to say that they believe the bank has committed no wrongdoing, and is cooperating fully with law enforcement.

http://www.wbjournal.com/article/20140521/NEWS01/140529983/1002

Acceris Realty, owned by Katia Wanzeler, involved in TelexFree in multiple ways

In related news, documents filed to court as evidence indicated that "Aceris" (or Acceris) Real Estate is one of the various companies setup by the Wanzelers, with Joe Craft's help, and may have received money from TelexFree.

Acceris Realty was registered by Joe Craft, CFO of TelexFree, back in early 2012, according to corporate records, before he became CFO of TelexFree. Acceris is owned by Katia Wanzeler, and is related to multiple properties in Massachusetts. Joe Craft is best known for his role for attempting to retrieve his laptop and 38 million in TelexFree cashier's checks WHILE the office was raided by Federal agents on April 16th and attempted to pass himself as a mere "consultant for TelexFree bankruptcy", and only reluctantly opened the bag for Sheriff's deputy when asked, and the checks were discovered. At least one of the checks was made out to Katia Wanzeler for amount of over 2 million dollars. It is unknown how much other funds had Acceris received from TelexFree, and whether this may constitute money laundering.

This, along with other TelexFree related companies also registered by Joe Craft, raises questions on how deep is the relationship between Joe Craft and the TelexFree coowners Merrill and Wanzeler, esp. prior of him becoming CFO of TelexFree. And how aware is he of the REAL financial situation at TelexFree.

Carlos Wanzeler, along with daughter Lyvia, is believed to have driven into Canada while his house and company was raided by Federal agents on April 16th, the day after TelexFree filed for bankruptcy. The BMW they drove was registered to Aceris, according to documents filed in the "material witness" warrant used to take Katia Wanzeler (Carlos' wife) into custody. There are unconfirmed reports that Katia may have driven a vehicle owned by Aceris to JFK Airport in New York. When detained by Federal agents at JFK, Katia Wanzeler has one-way ticket to Brazil purchased by someone in Brazil (believed to be Carlos Wanzeler) four suitcases, and $3000 in cash.

http://patrickpretty.com/2014/05/20/realty-firm-linked-to-carlos-and-katia-wanzeler-also-linked-to-former-telexfree-cfo-joe-craft/


Carlos Wanzeler may have reached Espirito Santo, Brazil

According to TelexFree's Brazilian lawyer Antonio Carlos de Alemeida Castro, aka "Kakay", Carlos Wanzeler is in Espirito Santo, and Kakay had spoken to him already, as reported by Globo.

http://behindmlm.com/companies/telexfree/james-merrill-denied-bail-carlos-wanzeler-surfaces-in-brazil/

Enhanced by Zemanta

BREAKING NEWS: Where is Katia Wanzeler? Asked Her Lawyers

$
0
0
According to an emergency motion filed merely hours ago (21-MAY-2014) in Boston, lawyers representing Katia Wanzeler (yes, there's more than one)  don't know where their client is.

After Katia Wanzeler was taken off the jetway leading to a flight going to Rio de Janeiro, Brazil, at JFK airport last week, she had been detained on a material witness warrant by Federal court in Boston, MA issued 14-MAY-2014, and US Magistrate in New York (which is where JFK airport is) has remanded her to US Marshals to be remanded to Massachusetts as of order of 15-MAY-2014.

And her lawyers claimed that she has NOT appeared in front of grand jury yet, as of today, and they want to know why. And they ask the judge to order the US Marshals to expedite and to hurry along so Katia can regain her freedom, as she had not been charged with any crimes (yet)

This is not on any news, as the documents were filed merely hours ago, and spotted by sharp-eyed Don over at ASDUpdates.


Speculations are running wild, that perhaps USDOJ are preparing charges to hold Mrs. Wanzeler, now that her husband had flown the coop.



Enhanced by Zemanta

NEWS UPDATE 22-MAY-2014: FBI / HSI Victim Reports; Uganda makes TelexFree arrest; Nevada Denies TelexFree telecom license; Ponzi Experts Talk TelexFree

$
0
0
FBI Badge & gun.
FBI Badge & gun. (Photo credit: Wikipedia)
News Update for 22-MAY-2014


FBI Needs TelexFree Victims' Help

Federal Bureau of Investigations (FBI) and Homeland Security Investigations (HSI) needs more victims of TelexFree to step forward and report how they are victimized. Please go to the following link to visit the FBI webpage, and fill out a questionnaire at the end.

http://www.fbi.gov/stats-services/victim_assistance/seeking-victim-information/telexfree-inc.-case


Please note this is for the CRIMINAL case, which is separate from the CIVIL case pursued by SEC

http://patrickpretty.com/2014/05/15/update-for-speakers-of-spanish-or-portuguese-secs-telexfree-complaint-now-available-in-your-language/


Uganda Makes First TelexFree related arrest

Uganda makes the first TelexFree related arrest of a local Ronald Muramuzi, who apparently was recruiting people into multiple HYIPs under multiple aliases and alternate names, and thus making himself quite rich. He's alleged to have profited by 2.37 Million USD (over 4 billion UGX)

http://behindmlm.com/companies/telexfree/top-ugandan-telexfree-affiliate-arrested/





Nevada denies TelexFree telecom license

TelexFree applied for Nevada telecom license on April 1st, 2014 (apparently not a joke), then declared bankruptcy on April 12, 2014 (okay, now it's a joke). Since then it's been raided, co-owner arrested, another ran for homeland of Brazil, and TelexFree 8 charged with fraud.

Due to the tortoise speed of bureaucracy, it took till now for Nevada to deny the TelexFree telecom license, stating that due to the bankruptcy application, the financial numbers provided with the application cannot be trusted.

http://patrickpretty.com/2014/05/22/bulletin-nevada-public-utilities-commission-staff-recommends-denial-of-telexfrees-telecom-application-financial-statements-cannot-be-relied-upon-at-this-time/


WSJ Ponzi Experts Talk TelexFree

Wall Street Journal's experts talk with 2 Ponzi Experts, including Jordan "Ponzitracker" Maglich, on how the TelexFree case had gone, and will likely go in the near future.

http://patrickpretty.com/2014/05/22/topic-telexfree-view-wall-street-journal-spreecast-featuring-ponzitrackers-jordan-maglich



Enhanced by Zemanta

BREAKING NEWS: Judge Released Katia Wanzeler, require her to surrender passport and not leave Massachusetts

$
0
0
According to anonymous sources as revealed to Boston Globe, Katia Wanzeler was released on Friday, 23-MAY-2014. This cannot be confirmed because she was arrested on material witness warrant at JFK Airport for testimony about the TelexFree fraud in front of a grand jury, and such proceedings are secret. She was required to surrender her passport and required to stay in Massachusetts. Attempt to leave could trigger an arrest and prolonged jail stay due to contempt of court.

Katia Wanzeler was arrested a week ago, at JFK airport (in New York, not Boston) trying to board a flight to Brazil with a one-way ticket, along with 4 suitcases and $3000 in cash. She has yet to be charged with any wrongdoing.

http://www.bostonglobe.com/metro/2014/05/24/judge-frees-wife-telexfree-owner-accused-fraud-alleged-global-pyramid-scam/QujW5kmVdeK87XF9E7ViaN/story.html
Enhanced by Zemanta

NEWS UPDATE 25-MAY-2014: Katia Wanzeler released but ordered NOT to travel; TelexFree promoter kidnapped for ransom in Peru

$
0
0
As previously reported, Katia Wanzeler was apparently released from custody on 22-MAY-2014, transported by Marshal service on 23rd and delivered to Massachusetts the same day. Testimony is under seal as are the details of her release. She had to surrender her passport and ordered not to leave the state. Attempt to do so would constitute contempt of court and arrest may result.

In other news, La Republica in Peru reported that a vigilante team of TelexFree victims apparently kidnapped their upline/promoter and tried to force him to withdraw money to refund them. However, being amateurs, their suspicious behavior made the bank trigger the robbery alarm, and they ran, but were soon arrested later, where they confessed to the kidnapping and they only want a refund of their money.

http://www.larepublica.pe/24-05-2014/estafados-secuestraron-a-promotor-de-telexfree (in Spanish)

http://www.losandes.com.pe/Policial/20140524/80360.html (in Spanish)
Enhanced by Zemanta

News Update 27-MAY-2014: TelexFree losing more telecom license; Trustee to Take Over TelexFree? SEC explains where did the money go

$
0
0
Remember folks... Don't believe crap info passed along by ex-TelexFree affiliates but instead seek out real news websites for information. The TelexFree affiliates are prone to pass along mis-information that they believe are "good news" when they are not.

TelexFree under investigation in Oregon

In a recently filed memo, as found by PatrickPretty.com, Oregon joined Nevada and Minnesota in their slow-move to deny the TelexFree telecom license applications, which was previously started by Joe Isaacs of ISG Telecom when he was helping TelexFree. When the ruse by TelexFree was discovered, Joe Isaacs quickly sent letter explaining he was duped, and he's no longer involved, and all the numbers he filed for TelexFree may have been lies.

http://patrickpretty.com/2014/05/27/telexfree-faces-prospect-of-regulatory-probe-in-oregon/


Judge Signals Quick Approval for Trustee Takeover of TelexFree

(Wall Street Journal) In the first bankruptcy court session in Massachusetts, Judge Holman said he will appoint a trustee to take over the company from the existing management as soon as all the paperwork are in. All parties, including the SEC, US Trustee, DOJ, and TelexFree have no objection or approve of the trustee takeover.

http://online.wsj.com/news/articles/SB10001424052702303403604579588452063956192

Editor's note: This news was passed around by TelexFree affiliates as a "great victory". It is NOT a victory.

Facts are
  • Trustee has not yet been appointed yet (soon)
  • Appointment of trustee does NOT stop the criminal and civil investigation by DOJ and SEC
  • Appointment of trustee does NOT stop the class action lawsuit
  • Trustee takeover means EVERYBODY in the company is FIRED. It's be like a receiver (like the one for ZeekRewards) who, under supervision of the judge, can SUE people to see return of assets to pay the creditors (i.e. all of you who are owed money). 
Whoever told you that the bankruptcy has been "granted" is false, and obviously this does NOT prove or disprove that TelexFree is a pyramid scheme. Company is DEAD. 

For a look at what a bankruptcy trustee can do, look up "Irving Picard", who's the trustee for Bernie Madoff's ponzi scheme.



SEC details where did TelexFree 8 spent money

According to an amended complaint by the SEC, it appears that Carlos Wanzeler had bought 34 different properties in Massachusetts and Florida (for at least 6.2 million), as well as a 40 ft yacht (300K), 2 Ferraris (193K), 1 Porsche (57K), 3 BMWs (more than 110K?), and a Toyota Highlander SUV (40-50K), through various companies created with help of Joe Craft, former CFO of TelexFree. Apparently all were paid for with cash.

At least one of the companies was incorporated in Nevis, a Caribbean island off Florida. One of the companies even listed Carlos Wanzeler's 65-yr old mother as manager.  Several listed his wife, Katia Wanzeler (currently not allowed to leave the US).

SEC stated that during TelexFree's life, Wanzeler and his family have received more than 13.7 MILLION USD from TelexFree.

There are similar accounting for the remainder of the TelexFree 8. Every one of them either received over 100K or was able to pay cash for one or more luxury autos worth 50K to 100K each.

You can read the amended SEC complaint on ASDUpdates file website. Read "Doc 128   Amended Complaint " 

https://sites.google.com/a/asdupdates.com/files-website/sec-v-telexfree-inc

Enhanced by Zemanta

Scam Psychology: The Illusion of Asymmetric Insight

$
0
0
Ever heard of "illusion of asymmetric insight"? No? Me neither, at least not until about a week ago, when I heard it on the "You're not so smart" podcast.

The premise is quite simple: let's say A and B have a difference of opinion on a certain issue. However, A thinks that he understands B's position better than B understands A's position. Sometimes, A thinks he understands B's position than B understands his own position.

The reverse is also true: A believe he knows his own position far better than any one ever could, certainly more than B's understanding of A's position, at least in A's own mind.

The problem is more often than not, this is an illusion, not reality.


Cover of
Cover of Lord of the Flies, Educational Edition
Lord of the Flies

In 1954, a group of psychologists, posing as camp counselors, got 11 and 12-year old boys into a camp... on separate ends of the camp. The two groups don't even know each other exists as they arrived on separate buses via separate routes. As psychologists predicted, a social order quickly emerged, with leaders taking charge and the rest will serve the order in whatever roles needed. The two groups are nearly identical... except they are on separate ends of the camp.

So what happened when they met? Well, you can read the short account by David McRaney of "You are not so smart". Let's just say, one of the things each group obsessed on is trying to find differences between the two groups... and used that difference to "prove" (to themselves) that their own way is superior and the other group is inferior, even though such differences are trivial.

And the experiment almost got out of hand when... let's just say... knives were involved.

http://youarenotsosmart.com/2011/08/21/the-illusion-of-asymmetric-insight/





Us vs. Them

If you feel that you belong to a "tribe" (or any sort of social group), it is natural for you to feel that any sort of opinion that runs counter to the tribe's beliefs must be false. Somehow, you simply won't consider that perhaps it is your tribe that is holding the false belief. This is known as "illusion of naive realism"... That your own beliefs (and those of your tribe) are true and accurate, and thus, any other beliefs that conflict must be wrong... by default. In a battle between we vs. they, we are always right, and they are always wrong. And you start by calling the other side a derogatory name.

The name calling is most evident in the military, when almost every enemy gets a derogatory nickname. Germans are "Krauts" or "Huns" (WW1 and WW2), Chinese were "Chinks" (Korean War), Vietnamese were "Gooks" (Vietnam War), and now, Taliban and insurgents in Iraq or Afghanistan are towel heads, ragheads, or camel jockeys.

This is also applicable to commerce. People in network marketing are rather fond of referring to critics and skeptics of network marketing as "dreamstealers", as if that invalidates all the data presented by the critics and skeptics in support of their viewpoint. All that "counter-data" were dismissed as "negativity", something to be avoided. They are also quick to imagine various "motivations" for the critics, with "jealousy" often on top of their list.

They don't seem to understand that perhaps their own understanding of their own industry is incomplete and perhaps their critics understand their own industry better than they do. In their mind, only they, the true believers, are qualified to understand network marketing (or whatever their core beliefs are) and anybody else that do not agree must be wrong by default, because they simply "do not understand" the truth (as they "true believers" know it).


How do I know I have it?

Technically, you don't, so you have to ASSUME you have it, and then proceed to support every bit of your own argument with proper evidence and logic, so you actually UNDERSTAND your own argument, and you never PRESUME you to know your opponent's issues without using THEIR evidence.


What can I do about it? 

First, know your own side. Make sure you can argue your own side properly. You can't argue effectively if you don't even know your own side.

A lot of the old adages advocate "think about it from the other side", or "walk in the other man's shoes", and they are correct. Looking at the same situation, dispassionately from the other side will often reveal more insights about the situation. Furthermore, if you simply "assume" that the other side does not understand you, or that you know more about your own position or issues, you are in danger of being proven wrong, over and over.

It is how you deal with being proven wrong that matters.

If you withdrawn and sulk, moaning "they just don't understand!" even though the other side had proven their view with proper evidence and logic, then you have learned nothing. And you are being close-minded. You are probably busy imagining that you knew your opponents to be close-minded idiotic individuals who can't form coherent thoughts... if they only think the way you do... Then you are indeed under the illusion of asymmetric insight... You actually believed that you know more about them than they do about you.

If you understood the other side's argument, found it to be of sound logic, and/or found your own argument lacking (in either evidence or logic), and you proceed to modify your own belief system to accommodate the new facts and logic, then you are being truly open minded.


Conclusion

For some people, denial is almost reflexive... They just CANNOT be wrong, even when evidence is starring them in the face. They are often under the illusion of asymmetric insight. And this feeds into various other cognitive biases such as groupthink / mob mentality, wishful thinking, black and white thinking (us vs. them), and conspiracy minded.

Recognizing the problem is the first way to limit the damage this illusion of asymmetric insight can do to your decision process. Then you have to consciously look at it without your own prejudices, and see if you have enough information to change your mind.


References

https://psych.princeton.edu/psychology/research/pronin/pubs/You%20Don't%20know%20me.PDF
Enhanced by Zemanta

News Update 30-MAY-2014: Zeek Receiver First Disbursement Few Months; Sann Rodrigues will NOT get award in Brazilian Congress; Trustee order issued by TelexFree judge

$
0
0
For real news regarding scams and schemes affecting you, stay tuned to REAL news, not bogus news spread through your uplines and similar people out to recruit you.


Zeek Receiver Announce First Distribution Coming 30-SEP-2014

On the ZeekRewardsReceivership website, receiver Ken Bell announced that the first interim distribution is tentatively scheduled for 30-SEP-2014. All people who have filed a claim must have accepted the claim by 15-AUG-2014 to be paid by 30-SEP-2014. Also, those outside of the US must sign the OFACS waiver as well. Please see the ZeekRewardsReceivership.com update for yourself, as linked above.

Obviously this will NOT be the only distribution, but rather than make victims wait even longer (Zeek was closed in 2012!)  a distribution will be made now while receiver goes after more net winners.


Sann Rodrigues will NOT receive award in Brazilian Congress

An event arranged by a Sao Paolo business leader Regino Barros to honor Sann Rodrigues, accused pyramid scheme TelexFree co-conspirator, and other people, has been cancelled hours before it was to start, according to iG News in Brazil. Sann Rodrigues was scheduled to receive "multi-level marketer of the year" award, according to program notes for the event, where Regino Barros will name Sann Rodrigues to "Multi-level Marketing Regulatory Agency", which is a private organization, despite the official sounding name and is not a government agency, according to iG. The senator who booked the room in Congress for Barros apparently was surprised at seeing Rodrigues' name on the list of honorees, but replied "we should not crucify before we have all the fact." when questioned by iG about Rodrigues. It is unknown if Rodrigues would have attended personally.

http://economia.ig.com.br/2014-05-29/homenagem-a-lider-da-telexfree-no-senado-e-cancelada.html (in Portuguese)  and thanks to PatrickPretty for the lead




TelexFree Bankruptcy Judge Approves Trustee Takeover of TelexFree

The latest order appearing on the KCCLLC website shows that the Massachusetts judge in charge of TelexFree bankruptcy has signed the order allowing US Trustees, the watchdog agency overseeing bankruptcy, to appoint a trustee to take over TelexFree from existing management.

http://www.kccllc.net/telexfree/document/1440987140530000000000006

Please note the fact that a trustee takeover of the company is ONLY DONE in case of FRAUD OR SUSPECTED FRAUD where the existing management cannot be trusted to continue to operate the company. The most famous trustee takeover in recent years was the bankruptcy and liquidation of Bernard "Bernie" Madoff and his 17 BILLION-DOLLAR ponzi scheme

This in no way affects the continued civil and criminal case against the TelexFree 8 (the 8 charged by SEC as co-conspirators to perpetrate the huge Ponzi/Pyramid scheme).

There has been several proclamations by TelexFree followers claiming this somehow means TelexFree will be allowed to restart because it is not a pyramid scheme. Neither statements are true, and in fact, quite bizarre. They should wait until trustee has been appointed, THEN see what the trustee does, before making such wild proclamations, lest you enjoy "boy who cried wolf too many times" tales.

Enhanced by Zemanta

NEWS UPDATE 03-JUN-2014: Burnlounge is a pyramid scheme (duh); Merrill about to flip on Wanzeler in TelexFree case? Rippln + Mannatech = ?!?!?!

$
0
0
Remember folks, get your news from REPUTABLE news sources (which I link to) so you can decide for yourself, rather than just one-sided narrative by unknown people.


Burnlounge appeal rejected by Federal Appeals Court

Burnlounge appeal of their 2012 judgement as a pyramid scheme was rejected by the Ninth Circuit Court of Appeals, affirming that they are indeed, a pyramid scheme.

My short profile on Burnlounge:
http://amlmskeptic.blogspot.com/2012/09/scam-study-burnlounge.html

In their decision, the court stated that:
The district court found that because purchasing a package was required for participation as a Retailer or Mogul, and because Moguls earned cash for selling packages, “[Moguls] by default received compensation for recruiting others into the program.”
The 9th Court's decision can be read here:
http://cdn.ca9.uscourts.gov/datastore/opinions/2014/06/02/12-55926.pdf

The short of it is, if you claim you sold something and are getting paid for that, but in effect you recruited and the recruits are required to buy something, then  your claim of sales is invalid... You are getting paid for recruiting, not selling.

What is interesting is the court's decision reaffirmed Webster vs. Omnitrition as a precedent, but it's no surprise as it's also the Ninth Court that made the Omnitrition decision.

You can read my summary of Omnitrition case here:
http://amlmskeptic.blogspot.com/2014/01/mlm-dictionary-omnitrition-case_30.html

This would have some profound impact on some very big players in network marketing that relies on recruiting 'self-consumers' who then recruit more self-consumers to make themselves rich. Those who emphasize retail sales by sales teams should not be affected.




Is Merrill about to flip on Wanzeler just to get out of Jail?

In a motion filed with the Massachusetts court, James Merrill's lawyers asked for release of his client from jail given a lot of stipulations, such as GPS monitor, random house checks, surrender of all passports and travel documents, surrender of assets, and so on. In the motion, Merrill was portrayed as the upright citizen who did not run (unlike his "partner" Carlos Wanzeler, who ran off to Brazil by driving to Canada then flew to Brazil, leaving his wife to lie to Federal agents about his whereabouts ).

No idea when the judge will rule on this motion.

Information from Don @ AsdUpdates.
http://asdupdates.com/wordpress/archives/5576

You can view the motion itself on Asdupdates.com, then click on New Files Website, then TelexFree and look for the 6/2 "motion to release from detention".


Corpse of Rippln to Rise Again with Help of Manna(tech)? 

Previous reports on Rippln made it clear it was a disastrous launch from the start, with silent partners (whose name was removed just before launch), massive recruiting campaigns that lead nowhere, and various promised recruitment bonuses (potentially illegal), and products that are just... well, underwhelming. So it wasn't surprising that after just a year or two Rippln died with a whimper after getting sued by RippleLabs, and various partners went on to Vapt or other opportunities.

You can read my old profile on Rippln
http://kschang.hubpages.com/hub/Investigating-Rippln-what-does-Rippln-do-Who-is-behind-Rippln-Is-Rippln-a-Scam

However, there are signs that what's left of Rippln... or at least some of its founders, may be joining with ex-Mannatech CEO Sam Caster, to start a new "Charity MLM" called "EM Squared".

Sam Caster is well known CEO / Entrepreneur / Scammer depending on your view. His prior ventures such as Eagle Shield, and ElectroCat were busted as scams by Texas Attorney General's Office. It wasn't until Mannatech, where he partnered with McDaniels, that he found a somewhat steadier opportunity, selling plant-based gum made into some fancy powder and such. One alleged study that "validated" the magic ingredient was busted in 1999 when the doctor behind the study turned out to have falsified some data. Sam Caster lasted until 2007, when he was forced by Texas Attorney General (again!) to resign after a scandal involving "illegal marketing scheme" which Mannatech eventually paid $6 million to settle out of court in 2009. Sam Caster himself paid a million in civil penalty in 2009, and agreed not to get involved in Mannatech or any other network company for a period of FIVE YEARS.

That blackout period just expired, so here comes a new opportunity... with a little help from his friend in Texas... Terry LaCore and LaCore enterprises, according to some rumors, to create this "EM Squared" (or EM2 as it's sometimes written).

The TL;DR version of EM2 is... They guilt-trip you into buying nutritional bars "The Hope Bar" for hungry children around the world, but somehow if you convince other people to also chip in a lot of $$$ to buy those bars, you get a cut of the "profit". All the bars are given to MannaRelief, which is run by Sam Castor and his wife.

Profit from a charity? WTF?!?!?!

But what's interesting is this "opportunity" is filled with the former top flyers from Rippln, such as Michael Rutherford. There are rumors that Terry LaCore and Brian Underwood are also involved at the highest levels, but so far there's no proof of that.

Also see BehindMLM's review of EM Squared
http://behindmlm.com/companies/emsquared-review-mannatech-charity-opp-spinoff


News Update 07-JUN-2014: TelexFree trustee appointed; TelexFree Faith Sloan know NOTHING about fraud, SEC disagrees; Lyoness not a pyramid scheme in Norway now

$
0
0
Remember folks, when you read news, even ones provided here, you should check the links I provided to make sure I was representing the new properly, and you should do the same for ALL the "news" you come across, unless you encounter news such as those from major newspapers, which has readers to account for and has a reputation of telling the truth, rather than what you want to hear. Stop reading crap meme and spreading them.


Stephen B. Darr selected as US trustee to oversee TelexFree bankruptcy

As directed by the judge Hoffman, US trustees has appointed Stephen B. Darr of Merisow Financial Consulting as trustee to takeover the TelexFree bankruptcy.

Here's the actual court order making the appointment:  (Thanks to Attorney Tim Durken for the lead)

http://www.scribd.com/doc/228343084/TelexFree-Certificate-of-Appointment-of-Chapter-11-Trustee

What exactly does a trustee do? Here's Cornell Law School's link to actual law on that:

http://www.law.cornell.edu/uscode/text/11/1106

You can find a short profile on Mr. Darr on the Merisow website:

http://www.mesirowfinancial.com/mfc/leadership/darr_s.jsp





Faith Sloan, part of TelexFree 8, claim to know nothing (i.e. blame Merrill, Wanzeler and Nehra)

According to "motion to dismiss" filed with the court, Faith Sloan, one of four promoters (along with the four executives charged by SEC in the civil fraud case, together informally known as the TelexFree 8) claims to know nothing, and claims she's as much a victim of TelexFree's officers as any one else.

Sloan seemed to be playing dumb, according to SEC filings. On 17-APR-2014, when SEC called up Sloan and informed her she's among the people being sued by the SEC, Sloan started indignantly claiming "why are you picking on me, there are bigger promoters than me". She then asked to see the complaint. SEC agent on the phone then informed her how to get a copy of the complaint from SEC website. When asked for an address so a copy can be sent to her directly, she refused, stating "you must know everything about me so you can figure it out." She then hung up on the SEC agent.

On 02-JUN-2014  Sloan filed a motion requesting more time to respond to the lawsuit, claiming she did not receive the SEC complaint until 27-MAY-2014, when her lawyer forwarded her a copy.  Her excuse, even though TelexFree closure was all over the news since APRIL? AND the SEC agent had called her on 17-APR-2014? The process server served her mother Antoinette Sloan with the complaint, not Faith Sloan herself. Even though they live at the same address.

SEC does not like this at all, and basically accused Sloan of wasting the court's time playing word games (i.e. "legal sophistry")

Judge granted her a partial extension.

http://patrickpretty.com/2014/04/25/from-court-filings-telexfree-promoter-faith-sloan-to-sec-why-are-you-picking-on-me/
http://behindmlm.com/companies/telexfree/sec-slam-sloans-porky-pie-nonsense/

Sloan then followed up with a motion to dismiss, where she claimed to know nothing about the fraud, it's all Merrill, Wanzeler, Labriola, and Nehra, and SEC haven't proven that she's defrauding people if she didn't know it's fraud because she's defrauded too.

http://behindmlm.com/companies/telexfree/sloan-files-i-knew-nothing-motion-to-dismiss
http://patrickpretty.com/2014/06/06/faith-sloan-blame-telexfree-merrill-wanzeler-labriola-and-nehra-not-me/

Experts in this field called this the "Sgt Shultz defense", aka "dummy defense", and it was rarely (if ever) successful.

http://en.wikipedia.org/wiki/Idiot_defense

On the other side of the world... in the meanwhile...


Lyoness not a "illegal pyramids sales system" in Norway Now

Norwegian Gaming Board, which oversees pyramid schemes, has apparently cleared Lyoness of suspicion of pyramid scheme after an initial investigation several months ago where it did announce that Lyoness was a suspect pyramid scheme.

What is worth noting is that Lyoness had, since the original suspicions back in December 2013, separated into two entities: Lyoness, and Lyconet. Lyoness will be consumer only, while the merchant side will deal with Lyconet. Before, both Merchant and consumer deal with Lyoness.

Norwegian Gaming Board has yet to publish its full decision or the reason it had made such determination. Indeed, the news was announced by Lyoness itself.

http://behindmlm.com/companies/lyoness/norway-lyoness-does-not-engage-in-illegal-activities/


Is Your Upline a Machiavellian? (i.e. Is S/he Exploiting You or Helping You?)

$
0
0
Niccolo Machiavelli 1 u
Niccolo Machiavelli
(Photo credit: Wikipedia)
A Machiavellian, named after Niccolo Machiavelli, is a manipulative SOB (or DOB, just to keep it equal), who knows every button to push to make you do his (or her) bidding, through cunning and duplicity. Whether the one being used will be harmed is of no consequence to the "user", as long as the user derived benefit from it.

By default, any network marketing upline is a Machiavellian, because as long as you have joined (and bought a starter kit), your upline will have benefited. Whether you benefit from joining is completely irrelevant.

However, as in most cases, manipulation can be for good... or evil. Machiavelli himself was often portrayed as amoral manipulator, but that would be simplifying the issues too far into black and white. He was advocating the rulers to get things done, through manipulation if need be.

Think about it. Aren't modern laws trying to "push" you into behaving a certain way? Like the various "sin tax" on things like cigarettes and alcohol?

But in general governments don't enact laws to be evil. Scammers do. Let's assume for now we are talking about the EVIL machiavellians only.

Machiavellianism (manipulate others for one's own gain), along with Narcissism (extremely self-centered), and Psychopathy (have no empathy), are known as the"dark triad" of personality traits.


Origin of Machiavellianism in Scams

How do uplines "go bad"? Generally, it's because they were taught that way. Instead of learning how to sell (i.e marketing), they were taught "ass backwards" to emphasize the network instead. Apparently they were taught that as long as everybody they recruit (into the network) buy a 'starter kit' that counts as "sales".

But it's not sales. There were no sales to real customers. All sales are to affiliates / recruits.

And they will instill the SAME (and WRONG) attitude onto their downlines.

Chinese has a term for this: 層壓式傳銷 which literally means "level pressure style marketing", though commonly translated as "pyramid selling". The closest term in the West is "product-based pyramid scheme", where products are barely sold outside the network, but are mostly consumed within, but with money moving from the bottom up. At certain angles, this indeed resembles network marketing, but the key difference is in network marketing, the overall goal is to sell products to customers OUTSIDE the company. There are people outside, NOT affiliates, that are actively using the products, and people are selling to those customers. Product-based pyramid scheme, on the other hand, sells to its own affiliates, with little to no sales to outside customers. Some are known to claim to give away stocks or "points" that can be traded for stocks later... if you buy up a lot more products.

One such scheme in China went after the elderly, by telling them the company will do initial public offering (IPO) soon, must bring up sales figures, must look good, so IPO can go smoothly, and encouraged the affiliates / customers to buy up even more products (most of which are vastly overpriced) for the "virgin stocks" which supposedly can be traded for real stocks if IPO goes through. It never did, and the company was busted as pyramid selling. The seniors were manipulated into joining, with fraudulent product claims and income potentials, then with various manipulations to buy up even more stuff that they don't need. The same scenario was repeated last year, when another company was busted in Hong Kong, this time claiming that this US-based company is going to be very big if people buy up their "Internet Comm Suite" for 24000 HKD (about 3000 USD) a year to accumulate "points" to be traded for stock later, and company will buy back the stock for huge riches.

Both pyramid selling cases relied on people who have little understanding of IPO and stock market. But the same idea can be applied to almost any sort of potential profit. And it always involve the same 3 steps.

A machiavellian's "modus operandi" has 3 steps:
Let us discuss each in turn.



Deception -- isolation from reality

A scammer will start to gain influence over you by providing you with false information. It will be false, but it will be plausible. They will also neglect to mention other pieces of information you need to make a properly informed decision.

Scammer will make every effort to discourage you from verifying that information, often by claiming some sort of "secret arrangement" (it's a secret!), time pressure (limited time offer! choose now!), "don't you trust me?", and other manipulation. Or they can have fake proof in place, often involving actors and insiders.

Sometimes, they will also engage in fearmongering, such as raising a non-existent issue and tell you it's going to be the worst thing ever and you have to do something about it. Scams pushing some sort of financial investment will often start with various claims that the world currency will fail and recession is only the prelude and so on and so forth.  And somehow THEIR product is immune to all that.

The overall effect is you do not have enough information to make a proper informed decision, but instead, are led to make the wrong decision (such as to trust the scammer).

This step goes hand-in-hand with manipulation.


Manipulation -- distortion of reality

Once the scammer have you exposed to the deception, they will manipulate you into accepting that as your reality, and attempt to further mold your sense of reality to suit their needs for the final step of exploitation.

Manipulation and deception often goes hand-in-hand, with both working in synergy to enhance the overall effectiveness. Attempt to make a scam look legitimate would often involve fake websites, deceptive videos, bogus and shill testimonials, manufactured social proof, and more. All of which are deceptions used as manipulations, or to reinforce other deceptions.

Many ponzi meetings featured actors portraying bankers or government officials proclaiming the fake investments are 100% legal and profitable, to the investors. Others misrepresent their scheme by cutting up and editing footage of famous people or mangling the quotes and wrote it in a way that make it seem they support the scheme. Everybody famous from President Obama to Warren Buffet have been used in one sort of deceptive pitch to another.

Ultimate goal is to exploit the victim.


Exploitation -- gaining from your altered reality

In various investment scams, this would culminate with the victim handing over money. However, there are many other ways a scammer can gain from having manipulated you.

a) reload scam -- since you fell for one scam, you're now on a 'sucker list', which is sold to other scammers who will pitch you for yet more scams.

b) upsell -- since they got a foot in your door, you will probably listen to them trying to entice you into putting even MORE money into the scheme, or perhaps, "roll over" your money when the investment matures.

c) judas goat -- you are enticed into advertising the scam for them, so they don't have to scam... you will scam for them, except you don't know it's a scam, so you're 100% sincere.. sincere and gullible. They are not using their reputation and skills to sell... they are using YOURS.


Conclusion

People who are exploiting you often appear to be helpful, but are carefully concealing certain facts while spreading certain falsehoods to manipulate you into making a decision that is beneficial to them. Unless you enjoy being manipulated, learn how to spot Machiavellians around you.


Quick Research: What is Eternyon and should you give them any money? (Probably not)

$
0
0
Occasionally MLMSkeptic was asked questions about a specific company. This is both such an investigation and an example about how I do such research. All this is done in about 30 minutes. (It took longer to write this blog post than to do the actual research)

Today's subject... Eternyon

So what the heck is Eternyon? They claim to be "advertising, technology, and e-commerce, using network marketing".

Frankly, their website looks like what some spammers built to catch people unaware, using only stock photos, like those fake universities.


Right now, there's no mention on who runs this business, or where they're located, on their own website. But it's clear it's aimed at Brazilian Americans, because it's in both Portuguese and English.


The wording in English is also quite... interesting. "Our Differential"? "Clients Benefits"? That looks as if it's written in Portuguese then ran through a translator.


It's allegedly centered in Worcester, Massachusetts... Where TelexFree was just closed not long ago by Feds.

You need to search online to find that Eternyon was allegedly founded by Wayne Howe and George Lima... Howe's allegedly a Massachusetts native, while George Lima was born in Rio de Janeiro but emigrated many decades ago.  However, there are no official paperwork viewable by the public proving Wayne Howe and George Lima are indeed the founders or executives of Eternyon, other than words of people trying to recruit you into Eternyon.

Searching Eternyon.com WHOIS hit a "domain by proxy"... They don't want you to know who registered the company domain.

Eternyon refers to itself as "Eternyon LLC" but never stated where the business is registered. Turns out it was registered in Wyoming: 2014-000657722, first registered in 2014-JAN-24.

You can search Wyoming entity search here:   https://wyobiz.wy.gov/business/filingsearch.aspx

However, instead of a name, the LLC was registered by yet ANOTHER LLC, at the same address:


Tech Products LLC
255 Park Ave Ste 1000
Worcester, MA 01609 USA

However, Tech Products LLC, which is also a Wyoming entity (2011-000603187), is marked as "inactive-dissolved".


So to make things clear, Eternyon is registered in Jan 2014 by an entity that went inactive merely 4 months later (May 2014). Its executives are unknown. What do we know about the address?


If you punch in 255 Park Ave Ste 1000, Worcester, MA 01609 into Google or Bing, you should realize this is not a "real" address... It means "10th floor" of that building, which looks like this:


Indeed, this is operated by Executive Park Suites II, which operates the website here:


Please note suite 1000 is the address of the entire 10th floor. If Eternyon actually rents an actual suite, they would have a suite number that's NOT "1000", but 1007 or something like that. This suggests Eternyon is merely a virtual office in Worcester

Yet it wants you to put money into one of four "packages" $100, $600, $1200, or $2400 (bronze, silver, gold, or diamond) and promise you weekly ROI and direct recruitment commissions. Oh, and there's $20 enrollment fee and a $30 monthly renewal fee. And the packages are annual. 

But what do you sell? So far, just a "BestyClub" (benefits unknown) and some sort of PremiOne coffee. But how you got paid had nothing to do with the products themselves. 

So to sum things up... 

  • We don't know where this business is really located
  • We don't know who's really running the business
  • We *do* know they want you to put in a lot of money
  • We *do* know they promise to give you a lot of money if you recruit more people

Frankly, this smells like a scheme, much like TelexFree.

News update 13-JUN-2014 (Friday!): TelexFree Faith Sloan plays dumb and begs for money; Solavei goes Chapter 11 Bankruptcy;

$
0
0
Remember, folks, get your news from a trusted news source, like I do. I don't relay unconfirmed information, and neither should you.


Faith Sloan Plays Dumb and Begs Court to Release Money; SEC says "No Way"

Faith Sloan, one of the "TelexFree 8", has filed a motion on 10-JUN-2014 asking court to release about 18K to pay expenses such as lawyers, rent, and food.

However, this is specifically against the injunction that froze her money in the first place. SEC and the judge that issued the freeze has specifically stated that no "carveout" ( i.e. taking money from accounts that contains money that may be tainted by the fraud) will be allowed if the account owner does not declare his/her assets. Thus far, Faith Sloan has refused to declare her assets as she claimed doing so may incriminate herself (i.e. "plead the fifth").

SEC has also long documents that detailed her multiple violations of freeze order, including:

1) Paid $14854 to "Changes Worldwide" another suspect scheme on 24-APR-2014
2) Paid $3990 to "Changes Trading LLC", which is a part of Changes WorldWide, on 28-APR-2014
3) Wired $30000 to her attorney on 7-MAY-2014
4) Transferred her house deed to her mother on 12-MAY-2014

And here she comes asking the judge to release more money to pay rent... to her mother, whom she just gave her house to. AND another $18000 to her attorney.

Hahahahahaha.



What's even MORE interesting is she apparently has MORE money stashed in "Bank of China" and "Agricultural Bank of China", and she transferred some money to her account in March and April of 2014, before the freeze. One wonders how many other accounts does she have (and can some of them be under her mother's name?)

Oh, and guess who's running Changes Worldwide? My "good friend"Robert Lee Craddock!

"Birds of a feather, flock together." 

http://behindmlm.com/companies/telexfree/sec-use-sloans-post-telexfree-activity-against-her/
http://asdupdates.com/wordpress/archives/5616

Seal of the United States bankruptcy court. Ch...
Seal of the United States bankruptcy court.
(Photo credit: Wikipedia)

Solavei Declares Chapter 11 Bankruptcy / MLM Mobile Phone Went Nowhere

According to Chapter11Blog, Solavei has filed for Chapter 11 reorganization in its home state of Washington, with current debt load of over 100 million according to some reports.

chapter11blog.com/chapter11/2014/06/solavei-llc-files-chapter-11.html

Have not seen any news coverage of this, so consider this "unconfirmed".



Scam Psychology: Naive Realism / Anecdotal Fallacy / Argument from Illusion

$
0
0
Illustration of Naive realism or Direct realism.
Illustration of Naive realism or Direct realism. (Photo credit: Wikipedia)
One of the most often used counter-arguments by a scheme participant against skepticism is the self-testimonial, as in "I have done this, so I know it works, and therefore the whole business works!"

Let us assume that they are not outright scammers for the moment (i.e. liar, liar, pants on fire)

What they don't realize is they are operating from "naive realism", i.e. they assumed that everything they experienced is real, when it is quite possible they've been defrauded (magic trick), and they then extrapolated from their limited (but realistic) experience to conclude that the whole business must be "real".  One version of such self-testimonial, and the most often used, is the "It paid me" argument, as in "this opportunity paid me, therefore it's not a scam".

Yet this is the most powerful of all arguments, even if it's false. TelexFree victims in and around Boston, Massachusetts told Boston Globe that pressure from friends and family, esp. when posing with new house, new car, new luxuries, etc. often prove to be impossible to resist, esp. by people with (naive) "unbridled enthusiasm". Quoting from the Boston Globe story:
...Fausto da Rocha said he probably lost $45,000, the proceeds of an insurance payment from an auto accident. He had initially resisted TelexFree, but after friends profited, he decided to join, hoping the investment would accelerate his recovery from bankruptcy a few years earlier and losing his house. Da Rocha, well known in the Brazilian community, said he recruited about 20 relatives and friends. 
“I feel guilty,” da Rocha said as tears clouded his eyes. “My career is gone. I’m going to clean houses with my wife. Cleaning houses is a good business.”
But the social cost is even greater. He had 20 relatives and friends he can never look in the eye again.

Sann Rodrigues, one of the "TelexFree 8" charged by SEC
as part of a scam, showing off his Ferraris and MB and mansion
in Florida in one of his videos (screencap from Vimeo)



What's even more interesting is the more you tell or listen to the story, the more you believe in it. You may not believe it at the beginning (it's just a job), but eventually you will. Here's something you may not know; if you read about rich people or talk about rich people, you get pleasure from it as if you are rich, just to a lesser extent, much like "groupies" or "camp followers" to rock bands and rock stars congregate around the celebrities. And after a taste of that pleasure, you will want more. That's why so many scams rely on displaying money or other evidence of affluence, such as exotic cars, beautiful houses, or exotic locales. To the right you'll find a screencap from a video of Sann Rodrigues, aka Sanderley Rodrigues de Vasconcelos, who had been charged by the SEC before as a scammer, showing off his exotic cars, mansion, and his beautiful family, which may have been purchased with money derived from his involvement in the TelexFree ponzi scheme. Yet such images are powerful recruitment tool: you too can be like me (if you join).

A person's view / experience is limited by his or her prior experience and knowledge to interpret the experience. If a person had never seen an automobile before, depending on their cultural context it could be described as horseless carriage, iron turtle, or some other terms. So if a person had never experienced a scam such as Ponzi scheme or pyramid scheme (and often, even if they did) they may not recognize the signs and interpret the fact that they received some of their money back as "proof" that the scheme works, when it can also be proof that it's a pyramid scheme or Ponzi scheme.

Thus, it's also known as "argument from illusion"... The person is not arguing with all the data, merely what s/he can experience. It's like the 3 blind men and an elephant example.  It'd be like the guy touching the legs (Wow! Elephant is like a small tree and rough!) telling the guy who felt the tusks (It's thick, bony, but curved!)  "You are absolutely wrong!" Neither of them have the full picture, yet neither would admit so.

In formal logic there's this "anecdotal fallacy", which basically states that you cannot prove anything if you only have your own experience as proof, as you could be an exception.

So how do you deal with these cognitive biases? Stop trusting your eyes and your heart 100%. You can be defrauded and lied to all the time. And you can only be cheated if you ALLOW yourself to be cheated.

Consider the business both from your view as an associate / affiliate, and from the business point of view. Does the business model make sense for BOTH VIEWS? Scams often claim to be a very profitable business and they need you to spread the word and they'll pay you a ton of $$$ for that... but first you have to pay them. If it's so profitable, why do they need YOUR money? Where is your money going? It makes sense for you the affiliate, but it makes no sense for THEM as a business. Just reinvest all that profit for X months.

Ask the person who was trying to recruit you. If they get haughty and bothered, like "why are you asking so many questions", walk away.

News Update 17-JUN-2014: TelexFree James Merrill out on bail; TelexFree trustee subpoena everybody for info; TelexFree victims tell their stories to Boston Globe

$
0
0
Hook, Line, Sinker (How I fell for a phishing ...
Hook, Line, Sinker (How I fell for a phishing scam) (Photo credit: ToastyKen)
Remember folks, read trustworthy sources, not random internet blog posts and Facebook messages. I give you the source of my info, so you can see for yourself.


TelexFree co-owner James Merrill let out on bail

According to Boston Globe, TelexFree co-owner James Merrill was allowed out of jail when the judge decided the criteria for his bail is high enough, which includes:
  • THREE houses for collateral, including 2 owned by him and one by his sister ($900000 bond)
  • Wear a GPS tracker
  • Not leave the state
  • Give up his passport
  • Must stay at home between 8PM and 8AM
Federal judge Tim Hillman ruled that unlike Merrill's partner Carlos Wanzeler, who had previously fled to Brazil (where he's originally from and still have relatives there), Merrill has deep ties to the Massachusetts community and really has nowhere to run outside of the US. 


NOTE: Click through to see actual judge ruling in this bail hearing


TelexFree trustee subpoenaed everybody for information

With little to go on how to administer the estate of TelexFree, the new bankruptcy trustee for TelexFree, Stephen Darr went for the fastest way: he subpoenaed all the different firms that advised TelexFree, which includes:
  • PriceWaterhouseCoopers (former financial advisors)
  • Alvarez and Marshal / William Runge (restructuring advisors)
  • Kurtzman Carson Consultants (bankruptcy claims / noticing agent)
  • Gordon Silver (TelexFree lawyers in Nevada)
  • Greenberg Traurig (TelexFree lawyers in Massachusetts)
The subpoena demands any and all documents, emails, correspondences, phone (cellular or landline) records pertaining to TelexFree, affiliates, or subsidiaries, any and all financial accounts and related documents, any and all disbursement registers for every account, any documents relating to financial information, esp. those involving Global Payroll Gateway, International Payout Systems, Propay, etc. any and all tax documents, state or Federal, any and all internal financial statements, any and all properties and other assets including intellectual properties, any appraisal of such assets, any and all communications and other documents involving TelexFree or affiliates, creditors, and more. 


Darr also wants the ability to compel any of the 5 parties to provide more documents in case they don't provide stuff fast enough or completely enough by summoning them to personal presentation explaining why such documents cannot be found or never existed. The judge has not yet signed off on this order, with a hearing set for 24-JUN-2014. Such a request though, is likely to be approved by the judge. 


NOTE: Click through KCCLLC website to see the various motions by Stephen B. Darr


TelexFree victims tell how they fell for the $1 billion Ponzi scheme

Boston Globe has two recent articles tracking TelexFree. One of them profiled multiple affiliates of TelexFree, all low-level players that lost money. Some lost as much as $45000, and have to face dozens of friends a relatives, whom they recruited into TelexFree. 


The other reported on people in Brazil, many of them still believe in TelexFree and distrusts their own government. Some of them persist in believing that most of their money is still in TelexFree accounts, merely frozen by the court. As soon as the company's "cleared" they will continued to be paid, they said.  Wanzeler, through his local attorney, claimed that he will not be returning to the US, and Brazil does not extradite Brazilian citizens to other countries. (Wanzeler never renounced his Brazilian citizenship). 




Scam Psychology: Did they really think they can get away with it? They sure did!

$
0
0
Sometimes, the actions of certain... perpetrators are puzzling, at least to people from the outside looking in. If they had not gone back for that one last thing, they may have gotten away scot free, but because they felt they can do it, they now face much much more trouble than if they had not.

One such incident, which had nothing to do with scam, was published at Jalopnik recently. Basically, a motorcyclist at Golden Gate Bridge did not like the camera crew from Channel 4 News there filming. So the guy made an illegal U-turn, went down the ONRAMP the wrong way, parked his bike, just to come have a "don't film me!" moment with the reporter. Which of course, only lead to even MORE filming. The entire sequence was caught by surveillance camera at the control center, who then summon Golden Gate Bridge Patrol, who detained the gentleman for questioning, and upon finding that the bike is UNREGISTERED, and the guy doesn't even have a motorcycle license (he has a car driver license) California Highway Patrol was summoned and the bike was towed and the guy have to find some other way home.

The guy seriously thought he can make illegal U-turn, drive the wrong way down on-ramp, and have no consequences? Nah.


Alleged crooks do things just as stupid, and sometimes, much worse.

Those who keep up with the Scamworld should recall that when TelexFree in Boston was raided by law enforcement on April 16th, 2014, the day after they tried to declare bankruptcy in Las Vegas (on the other side of the country). DURING THE RAID, their Chief Financial Officer Joe H. Craft tried to retrieve his bag containing his laptop and over 36 MILLION in cashier's checks, all of which are company money. When accosted by a Sheriff's Deputy, Craft claimed he was a bankruptcy consultant and all that is his personal property. He was ordered to hand over the bag, NOTHING leaves, and that's when the cashier's checks were discovered.

The guy seriously thought he can lie to law enforcement, and try to leave with over $36 million in cashier's checks, when there's a Federal and State police raid in progress?

Ah, but things can get worse. In at least two more cases, two potential idiots seriously thought they can get paid more when they may actually OWE money.




Any one remember Zeek Rewards ponzi scheme? It was shut down in August 2012 by SEC and other Federal agencies as a $850 million ponzi scheme. I was one of the most vocal critics asking questions and one of their consultants tried to shut me down, but that's another story you can read elsewhere. Any way, Zeek Rewards Receiver Ken Bell recently filed some documents to deny some claims, and it makes for an interesting reading.

In the document, the receiver stated that the two largest claims filed were 30 million, and 14.9 million, respectively.

However, receiver's records revealed that the claimant who filed the $30 million claim had only put in $10.00 (yes, that's a mere TEN DOLLARS) into Zeek. Did he really think he can file that, even as a joke?

Which brings us to the 2nd claim... 14.9 million by "Plastic Cash International" (PCI). They started processing payments for Zeek in June 2012, two months before Zeek was shut down by the Feds. They filed a claim 12 months later, claiming they are owed 14.9 million for losses sustained. Receiver denied their claim, stating that they are a "trade creditor", which is of a lower priority than the victims of the Ponzi scheme that had put in money.

PCI appealed, which prompted the receiver to look again

As it turns out, Zeek was using an intermediary called SecureNet to do business with PCI, and somehow this was overlooked or never came up in the investigations, and additional accounts were discovered. One account had over 800,000 dollars, which was then seized by US Secret Service as per previous court order.  So the receiver went back to ask PCI... are you *sure* you're not holding any Zeek money, under some other name, in some other account? PCI said no.

They were lying. Turned out there was yet MORE account where PCI had stashed Zeek funds... another 8.9 million dollars worth, almost ALL of the money they received in those two short months, that were never turned over.  Half of which was charged as "fees", "fines", "chargebacks", and such by PCI. The other half is simply... gone.

And here they are asking for 14.9 million MORE, when they put no money into Zeek, yet they want to be treated same as people who did put money in.

And they really think they can get away with it?

Would you want them to, if you're one of the Zeek victims, watching them "have their cake and eat it too"?

Viewing all 572 articles
Browse latest View live