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BREAKING NEWS: Fed Grand Jury Indicts Paul Burks of Zeek Reward Ponzi Scheme


BREAKING NEWS: GetEasy under police investigation in Portugal

BREAKING NEWS: Indian police arrested "YOBSN" heads (3 Indians, 1 non-Indian) for International Pyramid Scheme

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First reported by PatrickPretty.com


The scam that was referred to "International MLM Fraud" is YOBSN, aka "Smart Media Technologies" (but also known as Social Media Technologies, Automatic Geek, and so on.)

Quoting from the BangalaruCityPolice's Facebook account:
On Dec. 3, “acting on a complaint received at the office of DCP Crime, CCB F&M squad raided Room No 225 of Hotel Capital, Raj Bhavan Road, where 4 accused persons were explaining, advertising & collecting enrollment fee from new victims of YOBSN SOCIAL MEDIA NETWORK MLM fraud web based company ( hosted from US ) and run through a website www.socialmediatechnologies.com . . .
New members are lured with promise of big money in USD $s by pushing the ‘CREATING YOUR OWN SOCIAL NETWORK’ tagline and encouraging members to bring in more members & growing their pyramid on the LEFT & RIGHT side.
They advertise by saying that when a company like Facebook etc is making billions of $s from social network, why can’t you make money.
This company runs a Web site called Smart Media Technologies. Any person can become a member by paying 8000 to 25000 INR as per their capacity. Then the person has to introduce Two persons (Left & Right member) to invest for which he would get 25% BONUS each as commission. As the pyramid grows, he would get more bonus. Each member is given a username/password and the commission earned & number of members introduced is meticulously accounted in the login itself. In fact, each user can see his pyramid and the amount of commission earned by it.
CCB investigated the documents available with the accused persons and found that the ONLINE account of Miss Driver Denise has 2844 members in the Left Side and 29495 members on Right Side across the world, and she alone personally has collected around 50,00,00,000 INR worth enrollment.
Most of ‘her’ members belong to :-> 2000 from US, 1700 from India, 28000 from Malaysia, 500 from New Zealand, 200 from Dubai, 100 from Pakistan. Her members In India, are distributed pan-India:-> 300 from Karnataka, 800 from Maharashtra, 100 from Delhi, 100 from Punjab, 300 from MP, 100 from Hyderabad.
Md Kurram also has 2000 members in his tree & claims to have received 10000 $ as commission.
While the company claims to be based in the US, I was the first commenter on BehindMLM to find its link to India.

The company claims to be headed by a "David Martin". NOBODY outside the company had ever seen him or heard from him, except allegedly calls and/or emails. This is very reminiscent of Moolah's demise in UK where the founder "Alex Green" basically disappeared, after leaving revelation that he had legally changed his name so nobody knew what he did before (several failed businesses) and he disappeared with 1.4 million worth of Dogecoins. It is also suspected that "David Martin" does not exist at all, and is a composite personality operated by the heads of this scheme to sound more Western, much like "Profitable Sunrise" ponzi, where "Roman Novak" is the reputed head. SEC and authorities all over the world have investigated and shut down this scam, and no trace of "Roman Novak" can be found, so it is more than likely that Roman Novak does not exist.

We shall see how the prosecution goes.

And a reminder to all... Stop believing in quick riches. It's a good way to lose money. If it's too good to be true, it probably is.

WSJ: T. LeMont Silver Blames Everyone But Himself for Being Sued as "Net Winner" in Zeek

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Wall Street Journal article, published 2014-DEC-03 specifically named T. LeMont Silver, a Zeek "net winner" (i.e. he got more than he put in while others lost money), and serial Ponzi participant, as someone who admits he's an idiot, yet blames everybody except himself.

In the WSJ article SEC on Lookout for Web-Based Pyramid Schemes by Jean Eaglesham, it specifically named GoFunPlaces (and its parent eAdGear) as a scam shut down by the SEC.

At the end, Mr. T. LeMont Silver Sr. was mentioned by name, where the author wrote:

"Mr. Silver said he is a marketer with little knowledge of the business operations of the companies he promotes"

Yet he wants you to join him in making money.

Tsk, tsk, tsk...



T. LeMont Silver Sr.
(courtesy of BehindMLM)
In other words, Silver doesn't do his due diligence. Which is why he's facing a $1.7 million claim from Zeek Rewards receiver, and he's ducking it by uprooting his entire family from the US to live in the Dominican Republic, where he CONTINUES to push one scheme after another. Right now, he's in some Bitcoin scheme. Here's just a few of the scams he had been involved in (you can easily verify this yourself if you Google his name and the scheme name)


  • OneX 
  • ZeekRewards
  • JubiRev
  • GoFunPlaces
  • BitClub
Is this the sort of "internet entrepreneur" you are following? yet what was his reaction? 
Yet in my chosen field, greedy law firms...and others confront us with bankrupting litigation and regulatory actions. Is this because we dare to dream and seek success?
You are being sued because you keep joining scams, you moron!

And now the authorities are setting their eyes on these schemes. 

Here's to hoping people get the justice (and punishment) they deserve. 

MLM Mythbusting: Is MLM really a growth industry? (The Numbers May Surprise You)

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When you listen to MLMers / Network Marketers, you're often told that MLM is the big thing, it's "experiencing record growth", it's "amassing fortunes for millions of people each year", it's "#1 millionaire producing industry", big companies are going MLM, and so on and so forth. They'll dazzle you with numbers such as

  • Every week 150000 people join network marketing around the world (but how many quit?)
  • Worldwide sales of MLM is estimated to be 90 billion (still less than 1% of world economy)
  • DSA estimates 200 million new distributors in next 10 years (again, how many quit?)
Is MLM actually growing that much, when compared to other industries? Let's look a little closer. 

Is MLM the "next big thing"?

Claims have been made since the 1990's that MLM is the next big thing.  Back in 1990, Richard Poe wrote in Success magazine that network marketing is "the most powerful way to reach consumers in the 90s". He also wrote a few books, specifically, Wave 4.  This quote was reproduced ad infinitum by various MLMers trying to legitimize their own little niche. You can see this example where the author changed it to "21st century economy".

Basically, they've been saying it for THREE DECADES (going into FOURTH) and it STILL haven't come true. 



Those claims had not come true. Internet soon surpassed network marketing as the way to reach consumers, with online shopping, and ready access to review sites, peer reviews, and more. E-Commerce is a 289 BILLION dollar industry in 2012. For comparison, direct sales and network marketing is a 31.6 Billion industry in 2012, as per DSA. (see below)

One more point of comparison... Total US retail for 2012 is $4.9 TRILLION.  That makes direct sales 0.64% of stuff sold. It's a niche market, and it's not growing much, and hadn't done so for decades. 


Is MLM "experiencing record growth"? 

A lot of places repeat big words like "record growth"... 



The problem is... relative to what? DSA itself reports that sales has been down since 2006 and only just recovered in 2013 or 2014 (not counting inflation). See for yourself (all graphs courtesy of DSA.org):

1991 to 2000

2000 to 2008

2008 to 2012 (latest data from DSA)

So "record growth"... In relation to what, exactly?  It's now 2014 and they probably did break their old 2006 record... but that just means they are not as recession proof as they claimed to be... 

Also, is 31 billion a lot? Again, in relation to what?  Franchising is a 740 billion industry as of 2011, according to a PricewaterhouseCoopers analysis. And franchising started at about the same time as network marketing.  In fact, franchising may have success rate of up to 95% (the stats are old, per 1991, and no new data had been compiled since)

"Record growth" statement is meaningless. 


Is MLM "amassing fortunes for millions of people"?

The answer is no... not even close. Yet random coaches are making these grandiose exaggerations, and they want to provide you with training and inspiration (for pay, of course).



Simple math should tell you that can't be true. Remember, 31.63 billion estimated US MLM retail in 2012. How many reps were making sales?  According to DSA, 15.9 million. (in the US) as of 2012. 



That's average of  roughly $2000 SALES per rep. Even if you assume profit of 50% (extremely unlikely, way too high) that's only $1000 profit per rep PER YEAR. That's hardly a "fortune", is it?

Is MLM #1 millionaire producing industry?

That is a myth perpetuated by the same liar who claimed decades ago Harvard Business School teach MLM (it never ever did). 


Are big companies going MLM?

Often promo copies contains statements trying to name-drop big company's names to legitimize their no-name schemes. Here are some examples:
Fortune 500 corporations, such as IBM and MCI, now market products and services through third party MLM firms. 

IBM is no longer in the PC business. In any case I can find no link between IBM and any sort of network marketing / MLM. If you can find one, let me know via the comments below. 
CitiGroup, the largest financial services company in the world, sells mutual funds and life insurance through a network marketing subsidiary called Primerica. 
Citigroup had been trying to sell off Primerica since 2008, and finally did so in 2010 with an IPO.

And you need to understand how Primerica really works... only 1 out of 10 will be a regular seller according to article on SFGate. (the rest will quit after paying the join fee, so the existing reps have to recruit a lot due to huge churn rate)
For the last five years, the number one offering on the American Stock Exchange, in terms of profit growth, has been Pre-Paid Legal Services --- an MLM firm.
Pre-Paid Legal was originally "Sportsman's Motor Club", really. It started because the owner spent a lot of money fighting an auto-related lawsuit and thought, why don't I make my rich buddies buy insurance for that? Later they changed their name to Prepaid Legal.

Later it was hit by multiple SEC, FTC, and state attorney general investigations, as well as multiple trials. In 2011 it was purchased and made private and renamed to "LegalShield".

Not exactly another high-flyer... And Nolo guide advises against them, stating they are unlikely to save you any money. You may want to read the review at BehindMLM

I will also point out that Avon, by going MLM despite its 100 year heritage as direct-sales only, had apparently ruined the company instead


So what is the truth about Direct Sales and Network Marketing?

To put it plainly, Network Marketing is growing by adding salespeople, not by retailing. Just take a look at this chart compiled by William Keep and Peter J. Vander Nat:

Sales people are being added for past 20 years (redline), but average sales per salesperson (green line) has actually dropped slightly. Thus, any increases in sales are made by ADDING salespeople.

When you add the fact that DSA and its various advocates are trying to legitimize "internal consumption", i.e. "when salespeople buy their own inventory and consume it thus making no profit, that's still retail" that is extremely disturbing, because it suggests that these added salespeople are merely selling to themselves (and making no profit).

Furthermore, consider the blue line: MLM Sales in relation to all US Retail sales. The ratio is DROPPING since 2001. That means US retail growth is OUTPACING MLM sales growth (despite adding all these "sales people") 

And that in turn suggests that MLM / Network Marketing is now mostly a recruiting game: the more you recruit the better you are. You recruit people by convincing them to sell stuff to themselves (i.e. internal consumption) and sometimes, others. They think they're selling when they're buying. Total reality inversion. This reality inversion can be restated as 'sharing' or 'demonstrating' or 'promoting' the products but the fact is the distributors are buying most of the products, NOT the customers.

Furthermore consider another bit of statistic from the same paper by Keep and Vander Nat. During 1980, Amway distributors earned average of $267 annually in Wisconsin (revealed via lawsuit "Wisconsin vs. Amway 1982"). In 2012 dollars, that's $744.

Care to guess how much are the folks in Herbalife or NuSkin making now? As per 2012 income disclosure statements? $749 and $641, annually, respectively.

That's right, 30 years later, MLM income still sucks.

Consider that when you think about MLM.

Do your due diligence. Know the truth. 




Bad Argument: Distributors can't lose money if they enjoy the product (WTF?!)

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One of the contentious issues between MLM proponents and critics is the definition of a "customer" vs. a "distributor".

Logically, the differences are crystal clear:

Customer spends money, buys stuff (from distributors).

Distributor earns money, sells stuff (to customers).

However, in the MLM world, things are never so clear. And one of the arguments proponents often use is "if the distributor enjoys the product for internal consumption, they could not be considered having suffered financial loss".

Or as someone argued on reddit /r/vemma...
Because even those "poor souls" who join the business but don't earn commissions still aren't losing money, just like when you buy anything else in life that you ultimately consume or use you don't think of it as losing money. 
This is bogus logic. Can you imagine a bar owner drank all his own stock of liquor, and need to close the bar, and then tell himself, "I didn't really lose money because I got drunk"?

There's another reason though... consuming the stock prevents distributor from getting a refund.



MLM pioneer and proponent Richard Bliss Brooke wrote on his blog (I bolded two sentences):
So, although the failure rate here is all over the map, the question to ask again is what are the consequences of failure? Did the participant lose money? Perhaps. But the safety nets are generous here. Every Direct Selling Association member company is required to repurchase any product or marketing materials that are unopened and current stock. Contrary to public perception, it is hard to actually lose money at this level.
You need to still have the product if you want a refund. If you consume/use the products for yourself you can't get a refund. Because you're now a customer, not a distributor. (And distributors have less rights than a customer)

So not only did the distributor wasted time and effort on this venture, if s/he used up the products s/he can't even get a refund, yet they will be ridiculed for "you obviously not worked hard enough" or "you didn't really lose money if you liked the product" by their "peers".

However, there's a deeper issue here... which was the issue we discussed at the beginning... what's a distributor, and what's a customer?

In Herbalife, according to Herbalife's own presentation for 2012 data (as rebuttal to Bill Ackman's accusations), majority of their distributor did NOT intend to make money:

So are they customers, or distributors? Even Herbalife itself was confused that they had to officially change the name of those distributors who don't resell to "members".

Yet the issue remains. Customer spend money. Distributors earn money. So when a distributor spent money is he still a distributor? Thus is the question of "internal consumption". After all, if you consume the stock (you were supposed to resell), that's internal consumption.

The company doesn't care whether distributor resells the product or not because distributor already purchased the stock from the company. See Herbalife's Marketing Plan (bold emphasis added by me):
As you order products,you accumulate credit for the
amount of Volume Points
that are applicable to the products
ordered. These accumulated Volume Points become your
sales production and are used for purposes of qualifications
and benefits. 
--cited from http://factsaboutherbalife.com/wp-content/uploads/2012/12/Marketing-Plan-and-Business-Rules-2012.pdf 

In other words, Herbalife is basing your compensation based on what you BOUGHT ("... as you order products...")   and what other people bought off you. And if you didn't sell anything, then you are the customer.


Conclusion

You joined MLM to EARN money, not to spend money (at least without reasonable expectations of return). If you drank (or otherwise consumed) your stock, you're literally pissing it all away as you could have obtained a refund. Anyone advocating "you could not have lost $$$ if you enjoyed the product" is in serious self-denial or downright delusional.

NEWS UPDATE: WCM777 Ponzi leader Phil Ming Xu used Ponzi money to fund House and Fashion Shop

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The receiver attempting to recover assets from WCM777 Ponzi scheme operated by "Phil" Ming Xu has found more money laundered by Ming Xu.

When SEC caught up with Ming Xu and his ponzi scheme in March 2014, Xu signed a plea deal and a receiver was appointed to track down all the assets for eventual return to the victims. And the receiver, Krita L. Freitag, was sure finding a lot.

Xu had at least 54 different bank accounts under a dozen different company names at different banks, alleged the SEC in its restraining order back in March 2014. And the receiver was discovering even more assets that had been distributed to what appeared to be other companies, but are actually family members and friends. One attorney and friend of Xu got a 5 million loan from Xu days before restraining order. The same attorney also claimed to have lost a 200000 (two hundred thousand dollar) cashier's check that belongs to the receiver. In yet another case, unknown people were observed removing furniture and other property from assets frozen by court order and law enforcement had to be contacted to compel return of said assets.

Then there's the story of the missing million...





A month before the SEC action, Xu transferred 1 million from his ToPacific company (part of WCM) to entity called "MaNa Fashion" owned by "Sue Wang". Receiver tried to track down this person, who can't be found, until an accountant eventually revealed Wang's email, and a subpoena was finally served via email. Two months later, Wang finally acknowledge the subpoena, but it took ANOTHER two months before receiver got the documents she wanted, which is when receiver found that Sue Wang was actually Xu's sister.

Sue Wang eventually revealed two storage sheds of cloths, estimated to be about 100000 garments. As it is uncategorized and unsorted, and quality is unknown, it is nearly worthless, and it was liquidated quickly. But where did the rest of that million dollars go?

Then receiver found where that million actually went... MaNa Fashion transferred 730000 to a Ms. Deng in March 2014, and a house was purchased in San Gabriel, CA under Deng's name.

Turns out Ms. Deng is Xu's mother.

This house has now been frozen by court order to be eventually sold off.

There may be more surprises later.

NEWS UPDATE: TelexFree may be the widest Ponzi scheme ever, surpassing ZeekRewards

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Previously the Ponzi scheme with the widest reach is believed to be Zeek Rewards at 1 million victims and almost nine hundred million dollars. It was shut down in 2012 by SEC and other US agencies.

The bankruptcy trustee in charge of shutting down TelexFree after it tried to declare bankruptcy revealed that TelexFree fraud may be even bigger... with possibly up to 2.1 million victims and OVER a billion dollars.

There are 60000 victims in SOUTH AFRICA... the opposite side of the globe.

Boston Globe reported that some unscrupulous lawyers are encouraging victims to flood Darr's office with paper claims (i.e. physical documents).  He is NOT, repeat NOT taking paper claims because it cost too much to process. Soon claimants will be able to go to a website (much like Zeek Rewards Receivership) to file claims, and they will process the claims online.

Read the full article at  http://www.bostonglobe.com/business/2014/12/16/telexfree-trustee-stephen-darr-may-have-toughest-job-boston/Wkk5JzcPtjfyar6c9QD1sI/story.html#

News Update 19-DEC-2014: Zhunrize Plea Deal; PlanB4You Busted; Zeek Money May Be Stolen; FDA Admonishes Herbalife

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Lots of little news this week... Remember folks, don't accept random news items without attribution. I link to my sources, and you should click through to make sure I didn't lie to you (unlike others)


PlanB4You Ponzi Busted in Europe

PlanB4You was reportedly busted by local police (Google Translate of refdag.nl article)  when a seizure order was issued and bank account containing 2.5 million (?) have been frozen and multiple locations raided. Several luxury cars were apparently seized. And challenges to court have been denied.

PlanB4You (review by BehindMLM) is a virtually exact copy of Ad Surf Daily ponzi busted in the US in 2008, with 25% ROI in 25 days.


Zhunrize reaches Plea Deal with SEC, may go into receivership

Previously we reported that Zhunrize has been closed by SEC as a ponzi scheme, and at least one shill or troll claimed it was not true, and they had reopened. Seems every Ponzi scheme claimed this at one time or another, as there are reports this also happened with PlanB4You reported above.

Any way, to nail that rumor shut... (reported by BehindMLM) Zhunrize and owner Pan have reached separate deals with SEC to pay fines and disgorgement of ill-gotten gains. The judge has yet to sign the deal but is expected to.

There may be criminal cases pending later. Receivership will be appointed if the deal is accepted and that's the end of that.




800K of Zeek Money May Have Been Stolen By Credit Card Processor's Attorney

According filings by "Plastic Cash International" (PCI), a credit card processor for Zeek Rewards, their attorney stole at least 800K from them (as reported by PatrickPretty.com). The attorney had been disbarred for mishandling of yet other client's money.

For background information. PCI apparently kept over 8 million Zeek money without revealing it to the Zeek receivership, and claimed it had suffered further losses and wants another 15 million in compensation. Zeek receiver Ken Bell has asked to court to declare PCI in contempt of freeze order and hand back that 8 million ASAP or face interest charges and further penalties. PCI however, contends that most of the money was paid out in chargebacks and fines and attorney fees and therefore are not subject to freeze order and thus they are not liable.


FDA Admonishes Herbalife for False Claims of FDA Jurisdiction

(Reported by BehindMLM) In a letter issued 17-DEC-2014, FDA had sent a letter to Herbalife admonishing them of false claims on at least one marketing video. In the video, Vasilios H. Frankos, Ph. D claimed that "when I was director of dietary supplements at the FDA, I oversaw nutritional supplements, making sure they were safe and effective for use".

Dietary supplements does NOT need FDA approval to market dietary supplements, and FDA does NOT review dietary supplements for effectiveness. There are reviews for health claims and qualified health claims, but that's a separate issue. Nor does FDA review dietary supplement for safety unless they contain a new ingredient that had never been used and regarded as safe before.

It is astonishing to learn how can a former FDA official can make such statements... esp. a PAID statement, that is patently untrue.

The video has been pulled from Youtube, but it is not know what other videos are out there containing similar inaccurate language that had not been discovered.






BREAKING NEWS: TachoEASY AG confirms name was stolen by TachoEASY Iberica, NOT affiliated at all

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Sharp-eye readers of BehindMLM have just spotted this press release on the TachEASY.DE (and TachoEASY.AT) 

TachoEASY AG has recently become aware of the fact, that the trade name TachoEASY was associated with the Geteasy Group. 
We have received a large number of statements of actual consumer confusion. We were also approached by third parties and asked about our possible relation to Tachoeasy Iberica. 
TachoEASY AG is not affiliated with these entities and demanded vis-à-vis Tachoeasy Iberica that they immediately cease and desist any and all use of the trade name and logo TachoEASY. 
The products distributed by Tachoeasy Iberica are not the original products developed and sold by our company, the TacoEASY AG. Any statements to the contrary are false.
For any further questions, please contact TachoEASY AG.

In other words, TachoEasy Iberica is a clone of a real company, and was apparently created to provide "social proof" for the GetEasy ponzi scheme.



This is very reminiscent of the WCM777 ponzi scheme and how it claimed to be backed by Siemens, leading Siemens to release via Twitter, Press Release, Website, AND PDF to refute such links.

However, it seems TachoEasy went several steps further, by registering the clone company as well as tried to register several related trademarks.

Now I wonder how tight is this "bank" that was supposedly involved in recent months...  Clearly, that bank can't be that real if it got involved with a Ponzi scheme as a subsidiary...


EXPOSED: "Wake Up Now" sells dreams to people who can't afford it in cult-like atmopshere

Scam Tactic: Love Bombing

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sun myung moon lider de ALADO iglesia de la un...
Sun Myung Moon
 (Photo credit: Wikipedia)
This is the start of a new subtopic called "Scam Tactics" where I attempt to document certain approaches used by unscrupulous people on unsuspecting victims.

Today's topic: Love Bombing

The term "love bombing" originated in the 1970's from the "Unification Church" lead by Sun Myung Moon. If you don't recall the name, you may have heard of the Moonies cult. In a speech in July 23, 1978, Moon gave a speech, which is transcribed and translated below:
Unification Church members are smiling all of the time, even at four in the morning. The man who is full of love must live that way. When you go out witnessing you can caress the wall and say that it can expect you to witness well and be smiling when you return. What face could better represent love than a smiling face? This is why we talk about love bomb; Moonies have that kind of happy problem.
It sounds simple, but the way it works is a bit more insidious. As explained by professor Margaret Singer, a cult expert:
As soon as any interest is shown by the recruits, they may be love bombed by the recruiter or other cult members. This process of feigning friendship and interest in the recruit was originally associated with one of the early youth cults, but soon it was taken up by a number of groups as part of their program for luring people in. Love bombing is a coordinated effort, usually under the direction of leadership, that involves long-term members' flooding recruits and newer members with flattery, verbal seduction, affectionate but usually nonsexual touching, and lots of attention to their every remark. Love bombing - or the offer of instant companionship - is a deceptive ploy accounting for many successful recruitment drives.
Basically, the members fluff up your self-esteem by paying very close attention to your every action and appearance, and only give you positive feedback.


If you have self-esteem problems, the love bombers seem to be the solution. Soon, they are closer than your family and friends. And you will join them. Once you join, they will start withholding their attention unless you do their bidding and think their way. Soon you'll be conditioned as Pavlov's dogs and have your life taken over. And you won't want to leave because that is where you feel loved.

Many commercial cults, including pyramid schemes and ponzi schemes, but also abusive sales organizations that manage to live within "legitimate" network marketing companies, employ love bombing as a way to gain recruits, with a "support network". Such organization often emphasize platitudes such as "everybody's a winner""we are a community" and so on.

For more on sales cults, see

17 Signs that You're In a Sales Cult
Even More Signs You Are In a Sales Cult

(Humor) Classifying the Different Types of Network Marketing Douchebags

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Let's face the reality: Network Marketing has always had an image problem. It's a thin blurry line away from an illegal pyramid scheme. Even the so-called "legitimate" companies now admit they sell more opportunities than products. Different companies are getting slammed around the world for being a pyramid scheme, esp. in Asia and Europe. AND they have a penchant for pushing woo on the unsuspecting public.

Therefore it is no surprise that network marketing attracts a LOT of douchebags who have somehow latched onto MLM as their ticket to success. This is my attempt to classify the douchebag traits. If you spot a trait you think isn't on this list, let me know via the comments and we can discuss them!

NOTE: It is possible for a douchebag to hold more than one (or even, ALL) of these traits

The Evangelist

The "evangelist" want to tell people that MLM (and their product, sometimes) is the greatest thing ever much like a preacher preaches religion. They are armed generally with propaganda (i.e. myths) instead of facts. They are very excited to tell you about the industry and their products, but their primary concern is sign you up as their downline. In general, they are all about the positive.

Subtype A: the Firebrand

The firebrand is an evangelist who has pure HATRED of any one who refused to be preached to or don't agree with their view (MLM is the greatest!)  Any disagreement will be pinned on "they don't understand", "they are doomed as wage slaves in a deadend J-O-B", or even "it's a conspiracy against _____".

Subtype B: the Fluffer

The fluffer is an evangelist who will also fluff you up (and only you) to be aroused to his or her ideas, so much so they are nuts about positivity. They'll tell you that you can be or already are special, you have potential, blah blah blah. The fluffier you are, the easier you are to pluck later, after getting your ego stroked (in more ways than one).

Subtype C: the Fear-Monger

The fear-monger is an evangelist selling fear. Actually they sell "solutions" to relieve people of their fear (that they caused) and their money.  They will preach to your existing fears (you'll die broke in a ditch, you'll amount to nothing in a dead-end minimum wage job, you'll die of broken health...) and they'll pitch you a solution (income opportunity or woo supplements) that will solve the fear they caused in you.

Subtype D: the Bling-Flasher

The Bling-Flasher is an evangelist who show the world the amount of bling (jewelry, fancy watch, fancy car, fancy house, etc.) s/he can afford and "share" this abundance with you through his/her gospel of prosperity. Car may even have vinyl wrap proclaiming their affiliation (Vemma logo cars like BMW, or the infamous Mary Kay pink cars) and generally talks about opportunities (and selling such) instead of selling products.  What they don't tell you is how many products they sold, or how much did they spend traveling around "inspiring" people (i.e. recruiting).



The Defender

The defender is out to "defend" his faith... uh his scheme against any sort of criticism or even doubt against critics or even members whose faith had been shaken by variou scandals or bad news. They fall into several types (though some defenders can exhibit multiple traits)  Defenders can be noobs or seasoned veterans.

Subtype A: The Credentialist

The credentialists want to show the world how "smart" they are by flashing their credentials around. Their message is "trust me" because "I was rank X in Y different MLMs", "I had bazillion downlines", "Acme MLM asked me to consult with them", or even "I wrote about / teach MLM at _____".  However, if you dig a little deeper you may find that a good portion of their credentials are made up or exaggerated, such as "a dozen years of network marketing experience" actually meant "jumped ship every year, amounted to nothing". Will often turn indignant when confronted.    (Also see Pseudo-Intellectual, Indignant)

Subtype B: The Pseudo-Intellectual

The pseudo-intellectual reacts to criticism such as "Scheme X may be a pyramid scheme" with neutral or condescending (you don't know what you're talking about, you can't talk about things you haven't tried...) wall-of-text, often copied from their upline's bogus explanations or Wikipedia without understanding what they posted. Generally they resort to bogus explanations like "all companies are pyramid-shaped", "pyramid schemes don't have products", and so on.   Their long-winded responses are filled with fallacies and bad arguments, instead of properly formulated reasoning or evidence. They usually don't even know what laws define a pyramid scheme in their own jurisdiction.  When confronted with their ignorance, they generally turn indignant or tried to flash their credentials to validate their view. (Also see "The Indignant" and The Credentialist)

Subtype C: The Indignant

The Indignant can be recognized by their indignant attitude, such as "how DARE you criticize my pet scheme?!?!" They usually respond with ad hominem insults "whoever wrote the criticism must have a bug up their ***" or some such rather than pseudo-intellectual or credential responses. Also see "The Loan Shark".

More after this page break...





The Insider

The Insider is connected to the founder or highest levels of the company, and thus enjoy advantage that you average Joes are not privy to, and that's talked about as if they are naturally good at this, when it's really family connections.  It could be their parents were good friends with the founder, or he was a top level affiliate in a PREVIOUS MLM by the founder, and so on. Often such "heavy hitters" were offered backroom sweetheart deals such as cash incentive to migrate his existing organization of downlines to join this scheme.

Subtype A: The Secret Insider

Some insiders desperately want to HIDE their connections to the founders or top level execs of the company and want to pretend to be Joe Average, albeit, a successful one. Indeed, some founders are known to have played as "leader" or "company rep" before outing themselves as CEO / founder.

Subtype B: The Hopper

The hopper hops from scheme to scheme periodically, never pushing one scheme for longer than a few months. They have no true allegiance to anything except how to milk one scheme for all its worth, and defect to a "bigger and better offer" when one comes along (often accompanied by a promised paycheck from the founder).

Subtype C: The Double-Dipper

The double-dipper are known to join multiple opportunities and push them simultaneously, sometimes with distinct online personas, websites, and capture pages. They may even have a primary opportunity, and only mentions the secondary ones "in passing". If they have more than two, they are multi-dippers.  Double-dipper is known to cross-recruit, a definite no-no in in network marketing, but obviously douchebags don't care, "Plan B" and "backup" and "contingency plan" and all that.



The Sheeple 

The sheeple are at the lowest ranks of network marketing and schemes that went in without knowing what they were doing, and learned from douchebags bad traits without realizing it. These are the people who got burned by MLM, whether in the short term or in the long term.


Subtype A: The Romantic Hopper

The Romantic Hopper is a hopper-wannabe who has unreasonable hope that "this will be the one", except it never is, much like a hopeless romantic is always after another guy/girl s/he can't have. S/he is not high enough to be a real "hopper", but is probably downline of a hopper.  (See "The Hopper") This will last until their money run out or they somehow build enough downlines.

Subtype B: The Faux Lion (Judas Goat)

The Faux Lion is a sheeple who had been brainwashed into thinking they are lions among sheep and world is for their taking.  The emulate the Evangelist type (or one of the subtypes), but what they are really doing is they are hunting and rounding up sheeple for the REAL Lions, like a Judas Goat leading sheep to be fleeced (or slaughtered).

Subtype C: The Dreamer

The Dreamer is known for looking at an ass and sees a stallion, or looking at a scam ("We pay 1.5% per day!) and sees "great money-making opportunity". Such a person is always in a reality-distortion field (of him- or herself) and is fond of stating that how law enforcement or regulatory agencies "don't know what they're talking about" even AFTER their favorite scheme was seized by the government and shut down.  (Also see: The Groupie)

Subtype D: The Groupie

The groupie is a fan of one (or more) Bling-Flasher, and a Bling-Flasher Wannabe. A Groupie will walk around proclaiming "Yo, Bro, you see that man who just walked by? He makes 500K a month and drives a Beemer!"  Groupie tries to emulate everything done by the Bling-Flasher, right up to the point s/he can't afford to do so any more.

Subtype E: The Discriminator

The discriminator judges people by the likelihood of profit potential. If you are not semi-interested in the opportunity, or just buy some **** from him/her, s/he is not interested in wasting time with you. Sees everybody (friends, family, workmates, etc.) as dollar signs instead of people.  Will spend all of their "social capital", and even owe a bit more.

Subtype F: The Loan Shark

The Loan Shark thinks s/he is owed everything from everybody. The world owes him or her success. The refuseniks (people who refused his "polite" request to explain the opportunity) owes him/her an explanation. Downlines owes him/her respect, etc. etc.  Loan Shark walks around perpetually with a chip on his/her shoulder. Always out to "collect" on past favors (i.e. social capital).




Murder Linked to WCM777 Ponzi, Arrests Made

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According to Press Democrat news of Napa County, California, an arrest on 15-JAN-2015 was made related to a murder in 2014 of a Santa Rosa businessman. The murder is related to losses related to the WCM777 ponzi scheme shut down by SEC in 2014.

Napa County Sheriff's Department arrested Angela Martinez Arias, 41, of Petaluma at her place of business in Rohnert Park. She is being charged along with three others (one of whom died in confrontation with SWAT) for murder of Reynaldo Pacheco, 44, of Santa Rosa.  Pacheco was reported missing in March 2014, and 9 days later his body was found. He had been bludgeoned to death with a rock.

Detectives now believe that Arias have lured Pacheco to her location to discuss losses suffered in the WCM777 ponzi scheme, which was shut down by SEC on March 28, 2014. Upon arrival, Pacheco was kidnapped by her three co-conspirators, transported to neighboring Napa county and killed.

This is the first documented murder linked to the WCM777 Ponzi scheme.

You can find all WCM777 coverage on this blog by following this link:

http://amlmskeptic.blogspot.com/search/label/WCM777

Thanks to PatrickPretty.com for the initial link to article.

BREAKING NEWS: Coverup in Ghana? Bank employees claimed they've been duped to provide TelexFree loans then fired to cover up management incompetence

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Nine workers of "Opportunity Savings and Loans" in Ghana are threatening to sue the S&L for wrongful dismissal. The S&L apparently started providing loans to people for purchasing TelexFree positions in December 2013. Within months, the complainers claimed, questions started to arise as rules, such as residency check, were not followed, but apparently team leaders took responsibility. Then loans were issued without issuer's knowledge (i.e. wrongly attributed loans) and never corrected. In the end, the bank lost 1.2 million GHS (roughly 362000 USD) and fired the nine workers.

Now the nine workers are alleging that they were following orders, the branch leaders knew exactly what happened, all correspondences were copied and concerns brought up and dismissed by the said leaders, who were apparently not fired. Now the company president has fired the nine instead to cover up mismanagement.

The bank president dismissed the charges and said the case had been referred to the Police and he fired the employees who broke the rules, and he has no further comment.

See SpyGhana article.   http://www.spyghana.com/opportunity-savings-loans-sacks-9-workers/

BREAKING NEWS: India FINALLY moved against SpeakAsia Ponzi, SIX ARRESTED

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Those in the US never heard much about SpeakAsia, because it was a hybrid pyramid/Ponzi scheme in India. And it ensnared a LOT of people and money back in 2011.  The current estimate was the SpeakAsia involved 2276 crore Rs (366.5 million USD) and 24 lakh (2.4 million) victims. 

The scheme had collapsed years before, and its head Manoj Kumar had fled the country and is believed to have died in a hospital in Singapore in January 2014. However, the wheels of justice turns slowly in India, and it was just announced that 6 arrests have been made involving this case in India on Feb 1, 2015. 

(A crore is 10 million, so you're looking a 22760 million, or 22.76 billion Rupees, roughly 366.5 million USD in today's exchange rate. And a lakh is 100000, so 24 lakh is 2.4 million)

SpeakAsia started operation in 2010, and claimed to be a 'survey organization' that were recruiting "panelists" for their opinion that can be sold to large companies for huge profit, but they need the panelists to put in money, usually explained as "tests and qualifications" and "e-newsletter subscription", and are encouraged to purchase "additional panels", up to 9.  "Panelists" are paid on the surveys they completed and on recruiting additional panelists. In fact, recruiting ONE panelist is worth 10 "reward points", while completing one week's survey only earns 7 reward points. This was clearly a pyramid/Ponzi hybrid scheme with the money cycled out to pay members who got in early. 

The scheme quickly spread from India into neighboring countries like Bangledesh, Malaysia, and so on. 

In May 2011, they claim they will have 10 million members by 2012. The heavy growth soon attracted the attention of media and authorities. Multiple news organizations started reporting on the inconsistencies of SpeakAsia. One newspaper claimed that multiple Indian government regulatory agencies have commenced probes into this company. One court even summoned the heads of the company to explain themselves. (Reports available here)  The company quickly launched legal threats against multiple news outlets while put out a press conferences denying all charges, amidst the news that their Singaporean bank ejected them and their head attorney quit after one week.  Then Indian authorities froze their bank accounts pending investigation. 

In July SpeakAsia launched "Yug", and claimed they are transitioning into a consumer model, where they will sell electronics. Less than a month later Indian authorities revealed that due to a judge temporarily lifting a bank freeze ordered in May 2011, 104 million dollars had been transferred out of India into SpeakAsia's account in Singapore. 

Additional investigation showed that the SpeakAsia scheme had been linked to additional schemes such as "AdMatrix" in India, "MisterCollibri" in Brazil, and various shell companies such as "Seven Rings International" around the world. Arrests of additional members and interrogation revealed that the surveys were not commissioned by any company, and were made from random snippets of Wikipedia and other media. On the other hand, rumors are flying rampant, either spread by loyal SpeakAsia members or agitators that claimed all sorts of government malfeasance, 

In the meanwhile AISPA, "All India SpeakAsia Panelists Association" was formed by Ashok Bahirwani, allegedly to protect and advocate the rights of the panelists. However, later AISPA paid off someone to cancel their suit against SpeakAsia, leading many to believe that AISPA was a sham organization out to confuse the public and delay justice. 

English: The supreme court of india. Taken abo...
English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)
The SpeakAsia case moved to India Supreme Court and was ordered into arbitration, headed by an ex-judge and became known as the "Lahoti Committee" which produced no significant results. 

In February 2012 an Indian comedy show aired a segment that lampooned SpeakAsia "Silent Asia Pvt. Ltd" and was promptly sued by SpeakAsia. However, the case apparently never went any where. 

In 2013, Mumbai High Court ruled against SpeakAsia (finally), but that's just part of the paperwork to get the actual scammers incarcerated, apparently.  It wasn't until end of 2013 that additional arrests were made.  It was then revealed that the fugitive CEO Manoj Kumar had terminal cancer and his wife, with confiscated passport, wanted to go see him despite being involved in part of SpeakAsia's money shuffle. 

There was a story that Manoj Kumar contacted an author and want to tell his side of the story for a book. The author wrote a blogpost instead. He apparently passed away in January 2014 in Singapore. 

Then almost no news until the arrest today. 

Maybe this will be the end of the saga of SpeakAsia, maybe not. 



Any one can be conned: 5 rules of recognizing a con

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One of the most frustrating aspects of being a skeptic is the utter... "faith" a victim has in his/her ability to recognize a con, i.e. "it can't be a con... I'd know if it is a con" usually followed by "I met the owner / officer / vendors and they are sincere and smart people, and answered my questions." then even more social proof ("_____ vouched for him/her/it").

Social proof can be faked, folks. In fact, here are 5 rules of recognizing a con. I've seen the 5 rules before, but never in a single place. This may be as well a time to mention them.


Rule #1: EVERYBODY can be conned.

Sure, people who are naive are considered gullible, but the exceptionally bright are also gullible. The moment you consider yourself immune to cons, you are vulnerable. The EASIEST victims to con are the ones who considered themselves too smart and too knowledgeable to be conned. They are too proud to admit they can be conned.

"I'm sorry I said you were proud. Just stop!" / (c) 2012 Kevin Spear

Is that you, too proud to look down?


Rule #2: You will probably be conned in your area of expertise

Yes, you'll be conned in what you know. Why? Because con-men target those who "know". Your mind, being familiar with the area, automatically fill in the details, and that saved the conmen work. Furthermore, you also feel invincible in your area of knowledge, further increasing your vulnerability. The really smart people know a lot of different things and know enough to be skeptical and cautious as they can't be experts in everything. Remember, most of Bernie Madoff's victims are other money managers who thought they knew what Madoff's doing.

I am an NMR expert. To save time, let's just assume that I am never wrong. (source: Zazzle.com)


Will you have faith in your knowledge of the field, and thus, not ask the questions?




Rule #3: Con men (and women) never look like con men

If you think you can spot the scammers, you've already violated rule #1. But let's try this: ever seen Paul Burks, the singing magician? Here's a photo:

Paul Burks / AP Photo  (undated, sourced from libn.com)
Doesn't look like a con man, does he? Looked like a grandpa in a suit. But he's the head of Rex Venture Group, owner of Zeek Rewards, the widest reaching US ponzi scheme that had up to a 1 million victims and involved almost 900 million dollars. And he settled with SEC by paying up $4 mil rather than fight. And there are criminal charges coming later.

Successful con men look like the most honest trustworthy people you ever run across. Those who don't aren't successful. You won't see through their disguise (in time).

Rule #4: Most of what they say will be true

The best lies are the ones surrounded by truth, so you don't know which part will be the lie. It'll be deep in the proverbial fine print. You thought you can verify some details, and you may find them to be true, but there are parts that you can't verify... and that'll be the parts that are fake.

Hiding lies among truth (source unknown)

Will you stop checking because most what you found are true, and stop short of finding the lie?


Rule #5: If it looks too good to be true, it is.

Do I really need to explain this? There is no manna falling from heaven, or riches falling into your lap. If you believe this, you probably already violated all the other rules.

If it sounds too good to be true, it probably is. (source unknown)
Description: Man shakes hand while other hand signifies lying


If you can follow these 5 rules, you should never be conned.

Be wise out there.

(original 5 rules are from http://jlcollinsnh.com/2012/03/09/you-too-can-be-conned/ )


Is "Wake Up Now" heading for eternal slumber?

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After that "This American Life" expose on Wake Up Now, it seems there's an internal revolt going on, and the company had ground to a halt, if you believe the postings from various WUN affiliates. Highlights include:


  • Eric "Seemore Green" Turner claimed WUN owe him $300K and he hadn't been paid since August 2014.  (You'll recall Eric was heavily mentioned in the TAL episode)
  • Another affiliate, Logan Shippy, uploaded an video claiming the company had "let you guys down", "burned so much trust with so many people", and he's not going down with the ship. 
Previous reports stated that WUN had lost 8 million in 2012 and 2013. 

BusinessForHome, Ted Nuyten's site, cited unnamed sources that WUN is looking for an investor or else it may close its doors, having racked up another 7 million in dept in 2014 (i.e. approaching 15 mil) and even payment processors are turning their back on the company. 

So far, WUN has no official response, and other affiliates have continued their positivity message. 

We haven't seen reports about 2014, but at this rate, WUN is done "stick a fork in it" and all that. 

Is WUN heading for bankruptcy? Only they would know, but don't be surprised if they do. 

Why Law of Attraction / The Secret is bull****, according to Psychology Professor

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What is "The Secret"? Some new-age mumbo-jumbo about just think positive and good things will happen to you because "Law of Attraction". What is law of attraction? It can summarized as "happy thoughts attract happy happenings (wealth, health, happiness)".  Why? Some bogus reference to ether, mind transfer, "positive electrons", and other pseudo-science.

Now you ask, why is this important? The short answer: it isn't, except it appeared on the Oprah Winfrey Show. And anything touched by Oprah (or her spawn, "Dr. Oz") automatically becomes a popular phenomenon... and often, they are absolutely bogus.

The author of "The Secret", Rhonda Byrne, basically rewrote Wallace Wattle's 1910 book "The Science of Getting Rich", and melded other lessons from authors that echoed similar sentiment such as Napoleon Hill. But whereas Napoleon Hill and others advocate action, Byrne advocates laziness. According to the law of of attraction, just THINKING positively means good things will happen to you... no action needed.

The Secret is so lame, it got made fun of in The Simpsons ("Bart Gets a 'Z'") and Family Guy ("Brian Writes a Bestseller")

But do you know WHY is The Secret so lame? Let a psychology professor explain it to you...



Professor Neil Farbar (M.D., Ph. D) explained in his particle for Psychology Today

1) Law of Attraction is not a law. It's metaphysical fantasy based on pseudo-science about "positive electrons", "ether transmission", intense thinking causing frequency vibrations, and other rah rah.

2) Multiple studies have shown that positive fantasies have actually DECREASED motivation and energy to achieve such, because they are already happy.

3) People who are happy are less likely to seek out and form meaningful relationships. This can have severe consequences for the rest of their lives.

4) Having no plans, you wouldn't even know what to do when good things start happening to you. Yet according to Byrne, having plans means you doubt the universe will give you what you want.

5) Taking no action means nothing will happen... merely things will happen to you. Yet again, according to Byrne, taking action means you doubt the universe. That is idiotic.

6) Setting no date means nothing will ever get done, yet again, that's what Byrne advocated.

7) Law of attraction also want you to not think about challenges. How can you solve problems along the way if you don't think about them?

8) Mindlessness. Basically, law of attraction wants you to think nothing. That helps with decreasing stress, but doesn't do anything about actually achieving the final goal.

9) Law of attraction also says don't help the poor, since that attracts "negativity". Also, don't talk to anybody ill or sick, since that "attracts" bad stuff into your life. WTF?!

10) Law of attraction also says you should not interact with other people with problems... if you are fat, do NOT join a support group, because you're inviting fat into your life. WTF?!?!

11) Law of attraction basically says if anything bad happened to you, it's your own fault for negative thoughts. WTF?!?!

12) Law of attraction also blames the victim: anything bad happened to anybody, it's their own fault for being negative. Byrne had been documented stating that the Tsunami victims "invited" the flood.

I don't even need the professor to say it. Law of attraction encourages doing nothing, thinking nothing but positive thoughts, need no friends, and expect good things to "just happen". It is utter bull****.

And somehow this just fits the MLM Douchebag mindset perfectly. But that's another blog post.

BREAKING NEWS: BLGM busted by HKPD, 5 arrested, office locked and dark

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According to multiple media reports, Better Living Global Marketing, which operates "Bidder's Paradise" has been raided by Hong Kong Police Commercial Crime Bureau and 5 were taken into custody. Office is locked, and inspectors have confiscated cases of documents as well as computers into evidence.

BLGM basically operates as a Hong Kong clone of Zeek Rewardsd ponzi scheme, with various "winners" paraded as "proof" that the auction works, and then claimed the auction brought in so much profit that it needs investors to expand. However, according to BehindMLM, there were cash flow problems that was first discovered in 2014.

Apple News HK reports:  (translated, original linked below)
HKPD Commercial Crime Bureau has broken up an auction website alleged of using pyramid selling technique to defraud people. The affected company’s Tsim Sai Tsui office is dark and locked yesterday, with many victims knocking on the door looking for redress. Five arrested have made bail and will await trial. The founder of website, Luke Teng, 55, is son of HK’s most famous Christian Church leader Jing-Hui Teng.
The affected company “Bidder’s Paradise Ltd” office at XingWengHua center is locked. Only two people were observed enter. When confronted, one said “I’m a relative of Luke Teng, and the company’s active for two years, and said “We don’t cheat people”, and claimed there will be a press conference later to explain everything, and otherwise, no comment.

Many victims approached the office later. One Nepalese man claimed he’s merely a security supervisor at a milk company, and joined last July, put in 400000 HKD, earned up to 10000 HKD a month. Got many friends and family to join, have put in about 1.58 million HKD. He even pawned all his jewelry. He is afraid he will get back nothing. Another victim “Saiman” claimed he found the company online, and put in nearly 3 million HKD, and earned early on, but haven’t received anything recently. He had even reported it to the police at HKPD HQ.
http://hk.apple.nextmedia.com/news/art/20150213/19040479

There is a similar report in the HK Gospel Herald in Chinese that went into how could son of the most famous church leader in Hong Kong could have gone astray, but also warned people not to prejudge Luke Teng.

http://chinese.gospelherald.com/articles/24858/20150212/%E6%BB%95%E8%BF%91%E8%BC%9D%E4%B9%8B%E5%AD%90%E6%B6%89%E9%A8%99%E6%A1%88%E8%A2%AB%E6%8D%95-%E7%89%A7%E8%80%85%E6%8F%90%E9%86%92%E6%AD%A3%E7%A2%BA%E7%9C%8B%E5%BE%85%E4%BA%8B%E4%BB%B6.htm


Stay tuned for developing news.

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