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USFIA Raided by SEC, FBI, etc. on 29-SEP-2015, assets frozen, company seized

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Multiple news sources, including onsite witnesses, have reported that FBI, SEC, and several other agencies have raided USFIA on 9/29/2015 and froze its assets, and appointed a receiver to take over.

San Gabriel Valley News

SGVT: U.S. Government seizes Arcadia company's assets in GemCoin fraud case (29-SEP-2015)




Epoch Times

Epoch Times: Gemcoin HQ seized by law,. assets frozen (9/29/2015)
According to Epoch Times, citing onsite witnesses, the authorities arrived at 1PM, and took all the important documents. Reporters arrived at 4 PM, and only the receiver and lawyers are left, a locksmith was changing the lock, and various employees leaving with personal effects. Some investors trying to get inside and find out what's going on were turned away.

Investors included both Asians and Latinos. "Nereyda Alvarec" said people she knew have put in possibly over 1 million dollars, from all over the country, even outside of the US. She put in 3000 personally, and got back about 1000. She thought everything was fine, now she's not sure.

Long Z. Liu, an attorney who represented some victims, needs more victims to come forward, and want the best representative cases... no downlines, simple and clean background, high believability. He believes he can launch the lawsuit in 2 weeks or so, and he will sue EVERYBODY that was advertised to be involved, including John Wuo and other "honorary members" of UCCA such as Quen Jian.

And finally, Singtao Daily



USFIA Update: "bank accounts show apparently NO revenue" (since 2013), and more

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Official SEC press release: SEC Halts $32 Million Scheme That Promised Riches From Amber Mining



LATimes is a day late in reporting the Fed raid and shutdown of USFIA/Gemcoin, but apparently they actually read the SEC filing against USFIA, and they got a few extra details than anyone else thus far.

Here's the relevant parts:

USFIA has raised about $32 million from investors since 2013, according to the complaint. Nearly $19 million of that came from foreign investors, with $5.7 million coming from checks mostly issued by domestic investors, it said. 
The company’s bank accounts show no apparent revenue over that period, the complaint said. Instead, recorded transactions show large withdrawals to purchase luxury automobiles, entertainment and travel, as well as several transactions with various companies controlled by Chen.
and earlier in the article, Steve Chen apparently knew the gig's up, because...
Earlier this month, according to the filing, Chen attempted to wire $7.5 million out of USFIA’s account at Bank of America to a Chinese bankafter he was interviewed by the Arcadia Police Department about a separate case involving alleged death threats against disgruntled Gemcoin investors. 

And it seems the politicians have nothing else to say.





Here's a US Chinapress article:


And here's my quick translation of it:

Council members involved in Gemcoin Scam? Council "not appropriate" to comment 
Attorney Long Z Liu said he will initiated a class action lawsuit against Steve Chen, John Wuo, Quen Jiang, etc. 4 people as "co-founders" of USFIA/Gemcoin. Reporter attempted to contact the 4 people named, but until 6PM the phone was either unanswered or messages were not returned.  
On morning of 30th called councilman John Wuo for his reactions to attorney Liu's reaction, but was not answered, and message left was not returned by 6PM. 
Two numbers found for Quang Jian (former Chinese comedian) in LA area, but neither number was answered and message left was not returned.  
Councilman Sho Tay was contacted . Sho Tay called back, indicating that before there's conviction the council "not appropriate" to express things related to Gemcoin scam or councilman Wuo. 




Vemma update: Vemma / BK Boreyko / Tom Alkazin said it's ALL affiliate's fault

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Vemma, BK Boreyko, and Tom Alkazin each had filed response to FTC's case. From here on, it's clear what their strategy is:

To all the YPR Vemma affiliates...

IT IS ALL YOUR FAULT! (you deserved to be scammed)

Why, you thought I was kidding? 

Excerpt from Vemma's official response:
...Consumers represented by the FTC knowingly and voluntarily, and possibly unreasonably, exposed themselves to any claimed losses with knowledge or appreciation of the risk involved...
BK Boreyko's response also contained this section. 

Tom Alkazin's response is slightly shorter, but said the same thing:
...Any consumers represented by the FTC knowingly and voluntarily assumed the risk of losses.
In other words, if you lost money, it's because you are stupid, not because they tricked you. 

But this attitude of victim blaming is hardly unique.  It is a frequent defense by scammers, who basically said "the victims deserved to be fleeced". 


Paul Burks of Zeek Rewards was quoted by newspaper when questioned about victims and loss of money, "I never told anyone to invest more money than they could afford, I didn't tell them to do that. Never.... It's their fault. Not mine. Don't blame me." 

Dennis Bolze of Arizona also tried the same thing, after scamming many seniors out of millions. He got sentence enhancement for scamming vulnerable population (seniors), and he appealed that, claiming the victims knew what they were doing, thus should not be considered vulnerable population, i.e. they want to be scammed. The court didn't like that attitude at all. 

BK Boreyko and Tom Alkazin just said the same thing. 

IT IS ALL YOUR FAULT! (you deserved to be scammed)

Oh, and they also blamed other affiliates for the scamming. They claim they have NO control over that. (Funny, Herbalife seem to have no problem controlling ITS distributors...)

Therefore, there really is no other interpretation. If you continue to believe in Vemma...

Either you're among the scammers...  according to BK... 

Or you're among the sheeple waiting for be fleeced, also according to BK

Think about that, and your future with Vemma...

If there is any.

Scam Hilarity: How Gemcoin Scammer "Interprets" the American Justice System (HINT: It's VERY hilarious)

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In the interest of all Gemcoin sheeple or perp, Chinese or otherwise, this post will be bilingual.

爲了大家的利益,珍寶幣是真是賤,讀者在中國或外國,以下中英雙文對比.

Recently there were a post on Sina blog that claimed "there was no FBI raid" at USFIA and "SEC was just doing routine inspection". I took a look. It's hilarious. This clearly written by someone with "motivated reasoning".

最近有在新浪博客的一篇文章聲稱美國富豪USFIA “沒有被FBI調查”和“美國證券交易委員會只是做例行檢查”。我親自看一看。它真的好笑。這顯然是“有動機推理”的人寫的。

Due to size constraints, I'll just explain the important parts. I don't quote out of context.

由於尺寸的限制,我選重要部份解釋。我不斷章取義。

What he wrote will be in blue.

他寫的用藍色

First, the title:

第一,文章標題

"受联合国70周年大会邀请AFG公司副总裁等8人参加了联合国成立70周年大会"

UN 70th anniversary celebration invited AFG VP et al 8 people to attend



Anyone can take a photo in front of the UN building. There are even shops inside the UN building. These photos of Leonard S. Johnson and two unidentified individuals can only prove they were in New York recently. It has no other value.

任何人都可以在聯合國大廈前拍照。聯合國大樓內甚至有商店。照片只可以證明Leonard S. Johnson 和兩個身份不明的人最近去過紐約。沒有其他價值.



(FBI的战士们英姿飒爽哦,这张图片被媒体刊登在报端网络,渲染AFG公司被查封。可是,去过美国AFG公司的人一眼就能看出,这显然不是美国AFG公司背景的照片,媒体用好莱坞拍电影常用的移花接木、蒙太奇手法进行创作,实在让我们见识了美国的言论自由)

Translated; FBI Warriors, so fierce, so cool! This photo was published by media, claiming AFG was closed. However, those that went to AFG can see that this is not at AFG. Media use Hollywood fast cut to create false impressions, such as freedom of press in America. 

This photo is of FBI agents assisting in the Boston Marathon bombing in May 2013, when they searched Norfolk St. in Cambridge area of Great Boston.  The actual title of the photo is fbi-norfolk-street-cambridge.jpg  I have seen no American media use this photo with the Gemcoin story. If there is, please point me at the article. Otherwise, I must conclude that the blogger was the one who falsely inserted a photo, exactly what he's accusing "American media" of doing.

這張照片是聯邦調查局探員協助波士頓馬拉松爆炸案2013年5月,他們在搜查諾福克(Norfolk) 街在大波士頓的劍橋(Cambridge)地區。照片的實際名稱是FBI-norfolk-street-cambridge.jpg 我沒有看到任何美國媒體使用這張照片在珍寶幣故事上。如果有請指點我文章在哪。不然我必須定論這位珍寶幣博客才是插入不相干照片用來反指責“美國媒體”捏做新聞。(惡人先告狀)


(这张图片被媒体刊登在报端网络,渲染AFG公司被查封,但这显然不是美国AFG公司背景的照片,媒体用好莱坞拍电影常用的移花接木、蒙太奇手法进行创作,实在让我们见识了美国的言论自由。无怪乎刘因全之流可以肆无忌惮的拼接各种图片在媒体攻击AFG公司。美国报纸竟然和大陆文革中的大字报十分相似可以随便造谣惑众)

Translation: This photo was published by the media claiming AFG was closed by law. This is clearly not AFG in the background. Media use Hollywood special effects creatively and we have witnessed American freedom of press. How dare "Michael Liu" and his ilk publish all sort of photos to attack AFG. American newspapers are much like the hated paper in the Culture Revolution to spread rumors and lies. 

Those of you who can use Google image search will quickly realize this is a photo of the deputies in Lee County Florida. Again, I have not seen this photo in relation with Gemcoin, and again, I have to conclude that this Gemcoin blogger is the one who inserted irrelevant photos to accuse "american Media" of making up news.

那些會用谷歌圖片搜索的會發現這是佛羅里達州李縣(Lee County) 警長部 (Sheriff's Department) 的照片。同樣,我沒有看過此照片與珍寶幣報導有關,再次我必須做結論,這位珍寶幣博客才是插入了不相干照片用來反指責“美國媒體”捏做新聞。(惡人先告狀)

Here comes the hilarious part!

現在才是滑稽的料到了!




SEC徽标  Seal of the SEC

Dude, this is SEC "Southeastern Conference", a collegiate association http://www.secsports.com/ .

You mistook that for Federal agency SEC "Security and Exchange Commission"?  You need eye surgery or remedial English. Or your entire post is based on you randomly baidu'ed some photos.

好傢伙,這個 SEC 是“東南大會” 大學運動聯盟 http://www.secsports.com/。

你把他錯認成 SEC “證券交易委員會”?您該去動眼部手術或英語惡補!或許你這篇文章是你隨便用百度挖照片湊出來的!


(政府官员表态陈力没有'刑事'犯罪证据,但美国媒体可以乱说一气,这就是美国的新闻自由现状——真让中国人涨见识哦)

Trans: Government official expressed that Steve Chen has no "criminal" evidence of crime, but American Media can say false things. That is American press freedom, really opened our Chinese eyes. 

First of all, this is Arcadia city official speaking, and they are not privy to the investigation details. Furthermore, monetary fraud, such as pyramid scheme, is considered a CIVIL case in the US. You can't even tell the difference between civil vs. criminal law, do you want to show the world how stupid you are?

首先,這是阿卡迪亞市官員發言,他們無法得知調查細節。此外,金融詐騙如傳銷在美國是民事訴訟。你連刑事和民事犯罪的區別都分不出,還要出醜于全世界?


美国(​9月30日)今天洛杉矶1300电台播“报陈力这二天企图转移资产750万元,被FBI追查到扣留了”。公司账户早就在28日前就被冻结了,陈力不可能再转移公司资产,显然又是一个造假新闻。

Translated: US (9/30) LA AM1300 radio claimed that "Steven Chen recently tried to wire 7.5 million, was stopped by FBI". Account was frozen on the 28th, so Steve Chen could not have moved any moment. Clearly this news is fake. 

Not only your eyes have problems as proven earlier, clearly your hearing has left you as well. The news actually said that Steve Chen tried to wire 7.5 million after he was interviewed by Arcadia PD, which was many days before the 9/29 shutdown.

不僅你的眼睛有問題(前面證明過了),很明顯你的耳朵也有問題。新聞說陳力被阿卡迪亞警察採訪過後試圖匯款七百五十萬.這是9/29關閉前許多天的事。

Altogether, you have no understanding of American justice system, you have horrible eyesight, horrible hearing, and horrible mind intended to misconstrue the truth for your Gemcoin agenda.

總之,你誤解美國的司法制度,你的眼力極差,你的耳朵極聾,而你的心態是扭解真相為您的虛擬珍寶幣打氣給力。

You are the real liar, and you're clearly in league with scammers.

你才是真正的騙子,而且你明顯勾結騙子。

American Mining people went to jail in 2014 and operation foxhunt even went to Thailand to get two of them back for jail. They changed their name to American Royal, and you're docile as sheeple.

美州礦業的相關二十幾人去年就坐牢了.兩個溜網去泰國的被獵狐行動抓了回來坐牢。換名做美國富豪就把你們收的服服帖帖了.

They don't have to go far for you.

而你是"得來全不費工夫",就近!



Scam Tactics: Sell the Hype and the Opportunity, Ignore or minimize the Reality and the Cost

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Scams usually hook you by selling you the hype and how much money you can make (i.e. the opportunity), while minimize or ignore the reality (such as risk, market, etc.) and cost.

I'll just go over some recent examples and show you what sort of **** they had to spread to generate hype about their so-called "opportunity" while ignoring reality.


The "Internet TV" biz clones

In 2015, over half dozen "internet TV box" companies popped up advertising stuff like "watch your favorite TV for free, cut your cable TV bill, watch favorite sports"... etc. They want you to pay them about $300-500, and for every people you enroll (who also pay them $300-500) you earn money, possibly $100 or more per person. They go by names that includes words like "Box""Stream" and so on.

That's a pyramid scheme, folks. I've covered what's a pyramid scheme before, so I won't repeat that here. Let's discuss the hype instead.

The matter of fact is you can buy TV boxes like these for about $50-75 on Amazon. They are all based on KODI (used to be XBMC) any way, and wholesale from China they cost even less. You can probably hire some kid to program it for you for another $10-25 if you don't to spend time on it. So where does the extra $200+ go? To the company and whoever recruited you, of course.

TL;DR = you got something for $300 (or more).that you can buy for $60 (WTF?!)

AND you can get better and more legal boxes for $100 (Roku, Amazon Fire Stick, Apple TV, etc.)

They all advertise (some more blatant than others) that they can get pay-per-view programs and subscription programs for free. They tell you people are already doing this, boxes "like" this are being marketed by Amazon and Roku and others (except those don't pirate and cost less than $100). They count on you having "heard" of such stuff, but having NO detailed understanding of such. it sounds "vaguely familiar".

What they don't tell you is getting stuff "for free" is actually piracy and that breaks so many laws that you'll be personally held responsible for such.  And it's no joke, there already has been a raid in UK on seller of such boxes. And let's not forget RIAA and MPAA and so on suing grandmas and so on for astronomical sums.

The schemes hyped up the benefits (OMG FREE EVERYTHING!) and potential upside (OMG MAKE MONEY WHILE HELP OTHERS 'SAVE' MONEY!) while minimizing and hiding reality (The boxes cost $60 on Amazon) and risks (it's illegal to pirate and you can get sued).

TL;DR version:

Hype / Opportunity: OMG Make money, save money, no more cable TV!

Reality / Cost: Overpaying by 3-600%, piracy is illegal

Coming next, "cryptocurrency biz"





The "Cryptocurrency" biz clones

2015 is also the year of the bogus cryptocurrencies (along with legitimate ones) that usually have the word "coin" somewhere in their name. Without mentioning names, there are PLENTY of ScamCoins out there.

Actually, there are two kinds of schemes involving these cryptocurrencies. First kind is "we're starting our own coin, buy in! Recruit more people to buy in and watch your coins rise in value!" Gemcoin in the US is something allegedly "backed by amber". Another is UToken in Thailand supposedly backed by everything from real estate to malls to nickel mine and Chinese nutriceuticals. Some are backed by nothing (except empty promises)  And they are all over the world. One big one claims to be based in Bulgaria. There are dozens more that no one ever heard of except their promoters trying to get you to buy in.

A second kind claims to be a mining operation (you "mine" for cryptocurrency by performing complex math... a LOT of complex math) and want to sell you alleged CPU power to be applied to such mining and you get any coins "mined". You may mine big name coins like Bitcoin or unknown coins (i.e. we started our own), sort of combining the two.

The two are different enough we'll have to discuss them separately. Though there are schemes that combine both.

The "new coin" scheme is basically a ponzi scheme. Many don't even have a real publicly visible blockchain that can be audited, as they basically make up a random amount claimed the value rose by that much, and all the fanboys (and fangirls) cheer. Some even tie in some real products.  They make all sorts of grandiose promises, like buy in now, you can start selling them in X days, it'll rise Y times in period Z, W people / stores adopted it, blah blah blah. Most of which will be lies, or at best, half-truths. Examples are Gemcoin in the US, and UToken in Thailand/Malaysia.

They all cite Bitcoin, how it came from nothing and at its height worth over 1200 dollars, blah blah blah. They count on you to have heard of Bitcoin, but didn't know much about it. They didn't bother telling you Bitcoin, as of today, is less than $240 to 1 BTC. They didn't bother telling you that Bitcoin is untraceable. Once it's gone, it's gone. That's why criminals love them. Cyberransoms are often paid with Bitcoin, so much so at a Bitcoin exchange it's among the "reasons for buying".

TL;DR:   Hype and Opportunity = OMG get in while it's worth nothing! It sounds fancy! Reality and Cost = Worth nothing because nobody uses it, anyone can start one up.


The "mining" scheme, on the other hand, is unregistered securities. Look up "SEC vs. Howey", the decision that defined what is "securities" for decades since. Howey sold "citrus farm contracts", where buyers supposedly own a piece of citrus farm, but are not entitled to visit it or to the products, only to supposed profits as determined by Howey. SEC went to court and declared Howey to be selling 'securities', and won. And these "mining contracts" are just like these "citrus farm contracts".

Real cryptomining exists, and you can join, but you contribute CPU power, NOT money that supposedly buy such CPU power. Also, the difficulty of real cryptomining scale up as more CPU power were directed at it. Which also begs the question: if it's so profitable, why are they renting you the power rather than doing it themselves? Clearly, there's something that makes no sense if it works they way they claim, and thus, you're obviously not being told the whole truth.

TL;DR: Hype and opportunity = OMG I can invest in this new fancy thing! Reality and Cost = it's illegal unregistered securities, and that's NOT how crypto-mining works.

Conclusion

The swarm of closely related schemes shows a "me-too" phenomenon when scamming... "if you can do it I can do better" type mentality, but you can't make a scam legitimate, only more enticing, which means lie more effectively.

Scams are almost always based on current events, and TV boxes and cryptocurrencies are the hot button topics. By hyping the potential and the value of their "product", as well as left risks and costs unmentioned or minimized, scammers distorts your risk/reward decision process and leads you to the wrong conclusion. That is why it's considered fraud and misrepresentation.

Don't fall for such.

Scam Basics: Do you "Google" your upline, the company leader, and so on?

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Do you Google your own name as well as those people you know? Come on, everybody does. People who go on dates google each other's name, or even the photo, just to make sure they're not being catfished.

So why aren't people Googling their MLM uplines, and businesses googling their customers, and so on?

(NOTE: Yes, I'm using "Google" as a verb, meaning "to search online, probably using Google search". You are welcome to substitute Yandex , Baidu, or whatever your favorite search engine may be. )

A few years ago I wrote about "due diligence", and the case of Janamjot Singh Sohdi and his scam, and how he managed play an investment advisor and defrauded about a thousand people out of 2.5 million dollars despite having a long rap sheet such as having investment broker license revoked, disbarred from NYSE, and so on.  All of which can be easily Googled.

In the same article, I also wrote about the suspect scheme of "Phil Ming Xu" called WCM777, and how Xu was linked to the "Vantone scam" in China. WCM777 was eventually closed by SEC.

How did I found out that Xu was linked to Vantone scam in China?

I "googled" it, of course.

And it seems that's way more due diligence than most people bother to exercise, even bankers who's supposed to be following Federal "Know Your Customer" guidelines.

Have you ever heard of Daniel Filho? How about his full name: Daniel Fernandes Rojo Filho? Still no? How about his company, DFRF Enterprises (named with his initials)?  Yes, it's a scam, closed by the SEC in June 2015.  But what ELSE did you find out through Googling?




Did you find out that Daniel Rojo Filho is sometimes referred to as the "ambassador" of the Sinaloa Cartel circa 2010? (Link in Spanish, use Google Translate)

How about Daniel Rojo Filho was involved in another scheme called DWB Holdings back around 2006? (PDF of criminal complaint by DOJ)  They were apparently helping the cartels move "merchandise" into the US and money back out.  DEA and IRS ended up seizing hundreds of millions of purported drug money in about 2009-2010... much of which was under Daniel Rojo Filho's name and companies he controlled.  His partner Pedro Benavides got the blame and went to jail. Daniel Rojo Filho got away scot free, except in 2013 he agreed to forfeit another 25 million in assets.

Just Googling these facts, publically available, should tell anyone Daniel Rojo Filho is bad news, but apparently that didn't stop him from opening 17 bank accounts in the US around mid-2014, to the tunes of millions, at least according to Evans Carter, an attorney in the Boston Area, speaking to Wall Street Journal. And through these accounts, Daniel Rojo Filho managed to bilk another 18 million out of investors through his DFRF Enterprises, and most of money (about 6 mil) he spent on himself, including two Lambos and at least one Rolls Royce.

How about USFIA? What were you able to find about USFIA-Gemcoin before they got busted by US Marshalls / SEC ?  Ah, you see, they picked a (intentionally?) confusing name, because USFIA is better known as "US Fashion Industry Association". Unfortunately, you'll have to learn to read Chinese as Google translate is not very accurate when it comes to Chinese, but you should be able to find that it infiltrated China in late 2013, and actually busted in China in 2014 with over 20 arrests, and Chinese cops actually went to Thailand and got Thai police to extradite two more suspects (who had escaped) back to China. And its owner, Steve Chen, has a very checkered history in China with Amkey that dated back to 2003. Furthermore, he left China under mysterious circumstances in 1993 after searching advisory board for formation of China Unicom, and head of Catch Communications Beijing.

And how did you think I found these articles that I referred to, translated, collated, sorted, etc.?

I googled it.  (duh)

You should too.



BREAKING NEWS: Jeunesse banned in Malaysia, website blocked at national level

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According to users in Malaysia, as relayed to JusticeAlwaysLate on Facebook, any one attempted to access Jeunesse Global website (jeunesseglobal.com) from Malaysia is greeted with the following message:

JeunesseGlobal.com blocked in Malaysia by government order
for violation of Control of Drugs and Comestics Regulations 1984
Jeunesse lists an office in Malaysia on their contact us page. The status of that office is unknown at this time.

MLMSkeptic will bring you the latest news as soon as it becomes available.


Commentary: How MLM affects the current presidential campaigns

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While politics is usually quite far from the world of multi-level marketing, presidential campaign is big enough that anything anybody ever did figures into the equation, and in this case, two of the presidential candidates have direct ties to MLM... Donald Trump, and Ben Carson.

Those of you who had watched "Celebrity Apprentice" should recall that ACN, the MLM telephone company, was featured on the show... twice.  And Donald Trump even had his own MLM, "Trump Network", which nobody hears about any more.

What you may not remember is Ben Carson previously offered testimonial that Mannatech stuff helped him in his battle with prostate cancer... since 2004.

And let's not forget how big some of these MLM businesses are... and they donated HEAVILY to Republican candidates of all levels. It's already documented that co-founder of Amway, Richard DeVos and two family members donated 25K per person to Scott Walker's campaign AND unknown amounts to Jeb Bush's campaign. When Mitt Romney ran he had support of Amway, NuSkin, and Xango, all big name MLMs.

So, what are some facts about ACN and Mannatech, and perhaps, related to Donald Trump and Ben Carson, that you don't know, but should?

Let's start with ACN and Trump

ACN / Trump

Did you know that in 2010, the average ACN Canada participant takes home about $41.00 per month? That's directly off their website:

"The average ACN Canada active IBO in 2010 earned approximately $500." -- ACN Canada website 

As it is 2015, and there is no update, clearly the figure had not risen (and may even have FALLEN!)


Did you know that despite ACN having sponsored Celebrity Apprentice twice, Donald Trump was quoted by Wall Street Journal of saying, "I (Trump) know nothing about the company (ACN) other than the people who run the company, I’m not familiar with what they (ACN) do or how they go about doing it, and I make that clear in my speeches."

This is also interesting considering that Trump allegedly boasted to WSJ that for a speech at an ACN event he got $2.5 million back in 2008, and pocketed another $1.3 million for 3 more recent (and presumably shorter) talks at ACN events.





Carson and Mannatech

Ben Carson is a real MD... a neurosurgeon, in fact. So it's surprising how he fell for the Mannatech woo... because he later claimed he benefited from the woo, and started endorsing it. Here's a photo of Carson at a such company event:


Most of the following is coming from a blogpost by David Gorski on ScienceBasedMedicine.org

So how did a noted neurosurgeon got exposed to woo? more than 10 years ago, Carson got a diagnosis of "high grade" prostate cancer after needing to go to the restroom more often. He had access to some of the best urology doctors in the world, but apparently, he chose to look at his own X-ray and claimed to have seen lesions all over his spine instead of having a radiologist look at it. So the conclusion is he's "terminal". Is this confirmed? No one seem to know other than Dr. Carson himself.

Any way, his fight with cancer got out and he started to get unsolicited advice and products from well wishers, and one of them referred him to Mannatech and "Dr. Reg McDaniels", and Carson claimed, after doing a "regimen" of the Mannatech product for three weeks, his symptoms went away, and he toyed with not doing the recommended surgery, but ultimately decided to do the surgery after all. Furthermore, later tests shows that whatever "lesions" he saw in his spine was NOT cancer.

In other words, he does NOT have terminal prostate cancer. The so-called "high grade" cancer was taken care of via surgery by some of the best urologists in the world.

So why was he endorsing Mannatech product then, by appearing at a Mannatech event to speak? According to Carson, he wasn't endorsing Mannatech. He said people should NOT conclude that he's cured without surgery, and should NOT conclude that glyconutrients (Mannatech stuff) cured him. Instead, he's claiming that "natural products" can "supplement what's done by traditional medicine".

That sounds like more CYA (cover your ***) than a full denial, doesn't it? I mean, there's no proof other than anecdotal evidence that "symptoms went away"... Well, if you're not sure what caused it, how do you know what made it went away? You'd think that a doctor would know that... but apparently not.

Further research shows that Carson had spoken at Mannatech events in 2011 and 2013, and may still be taking Mannatech products today.

In Conclusion...

So, what does that say about either Donald Trump or Ben Carson?

Not much, actually.

Trump never held any elected office and IMHO his poll numbers was really centered on his name recognition and him pandering to the right-wing tea party folks than his real leadership abilities. His association with ACN is purely financial and mutual backscratching, not because he likes ACN.

As for Ben Carson.. He's a weird guy who held some kooky thoughts in his head about "what if the Jews were armed" and "more guns will solve gun problem", but that sort of kookiness may explain why a famed neurosurgeon would fall for Mannatech woo just because of a personal cancer scare.

I personally, would not want EITHER of them to be elected president.



Scam Tactics: The Galileo Gambit

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Does everyone remember who Galileo Galilei is? He's the one who taught heliocentrism (the sun is the center, not Earth) and was persecuted by the Roman Catholic Church because heliocentrism ran counter to the Biblical literalism of the time (that Earth is the center and everything revolves around Earth).

So what is Galileo Gambit? An argument tactic that combines three separate fallacies (appeal to minority, appeal to authority, conditional fallacy) in one concise package. 
They made fun of Galileo, and he was right
They make fun of me, therefore I am right.
Galileo Gambit is generally used to dismiss the "widely held truth". Creationists and Climate change deniers often use Galileo Gambit and claiming persecution. (Indeed, Rick Perry sparked controversy when he claimed that science on climate change was 'not settled yet' in 2011 and added "Galileo got outvoted for a spell")

There is a variation called Semmelweis Gambit that was often used by "alternative medicine", or otherwise known by its less complimentary acronym, SCAM (supplemental, complementary, and alternative medicine).  Ignaz Semmelweis was a doctor that provided the start of germ theory in 1800's Vienna, but his views were not accepted during his time and he died a broken man, with his views only came into acceptance after his death.

Another variation is known as "Three Stages of Truth" often misattributed to Arthur Schopenhauer (who never wrote such a thing). Let us look at an example:

Here is one form of it used in a recent... suspect scheme (that had since collapsed.)



Comment left on TechCrunch by Jim Bunch regarding
Rippln for Jonathan Budd, founder of Rippln, as words
of encouragement, using "3 stages of truth" fallacy
To the right is a screenshot of a comment left on Techcrunch of a recruitment scheme called Rippln that was hot in 2013. It had collapsed in 2014, and was even sued by Ripple Labs for besmirching their name.

Jim Bunch is a supporter / buddy and later partner of the Rippln's founders, and in the comment he defended Rippln's launch with "3 stages of truth".
So just consider for a moment that there "could" be something that you feel like
1 - ridiculing...
maybe
2 - opposing and just realize that someday the idea that your social graph has a value will become
3 - self-evident 
People often mock what they don't understand... so just consider for a moment how you're showing up in the world and ask if you're in fact at the beginning of a transformation that maybe, just maybe, you're lacking enough information to really make an informed opinion.  
Since Rippln died in 2014, there is no transformation, and as the joke goes, "history is told not by who's right, but who's left".  (That's a word play, as "left" here actually means "remain".)

The logic is bogus, so how do you see through such?


Galileo Gambit can be categorized in many ways. In Wikipedia, it's grouped under "association fallacy".  In RationalWiki, Galileo Gambit is described as a combination fallacy including aspects of "transfer" (i.e. association by honor), appeal to authority (also association by honor), appeal to minority (i.e. "cheer the underdog"), and conditional fallacy (bad logic).

Basically, the presenter, in face of facts and evidence against his hypothesis, claims (with little or no proof)  that it's a vast conspiracy to suppress him by a nebulous "scientific establishment", or "big Media", or "big Pharma", or the really ridiculous like the Bilderberg Group or the Illuminati.

The concept is actually quite simple to illustrate if you rewrite the premise

  • A is B  / People who were right (like Galileo) were laughed at
  • A is also C / I was laughed at
  • Therefore all Bs are Cs / Therefore I am right (like Galileo)

This is a fallacy because there are plenty of people who were laughed at that were not right.  Without proof that you are right, you're just a crank with delusion of persecution.

The gambit can be most easily disproved by a quote from the late Carl Sagan
The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright Brothers. But they also laughed at Bozo the Clown.  
(Broca's Brain by Carl Sagan, 1979, pg 64)
Does everybody who get laughed at are geniuses? Of course not. So how do you separate the comic and the truly hilarious from the genius being laughed at?

Evidence, of course, which the cranks will not have.

So to summarize, if any one tries the Galileo Gambit (or one of the variants) on you, demand proof that explains WHY he is right and everybody else is wrong, and evaluate THAT against the established facts. Ignore the rhetoric.




PSA: Victims of WCM777 and related fraud must file claim by November 9, 2015

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If you were a victim of Phil Ming Xu's ponzi scheme WCM777 and its related entities, you need to gather up your paperwork ASAP and file a claim before November 9, 2015.

This is the URL of the receiver’s site: http://www.worldcapitalmarketreceivership.com/

This is the URL of the site to file claims: https://www.wcm777claimsprocessing.com/en/Home/Filing

Among the defendant companies, affiliated entities or receivership entities are World Capital Market, Inc.; WCM777, Inc.; WCM777 Ltd (d/b/a WCM777 Enterprises, Inc.); Kingdom Capital Market, LLC; Manna Holding Group, LLC; Manna Source International, Inc.; WCM Resources, Inc.; To Pacific, Inc.; and ToPacific, Inc.

You do not need a lawyer, but you do need to be online and have paperwork ready, and ability to use an English website and follow instructions.

Any delay in filing a claim may result in you not getting any compensation from this fraud.


Scam Psychology: the echo chamber effect (and how it turns you into a recluse)

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Sheeple
That's sheeple. Does that look familiar to you?
(Photo credit: hermetic hermit)
MLM is all about your "team", team spirit and camaraderie, don't let the team down, we'll be there for you, blah blah blah.

But have you ever considered the NEGATIVE effects of a team environment?  (Or is that merely "negativity" to be avoided?)

When you are in a social group such as a team, clan, whatever, you automatically try to fit in. You will conform yourself to the team, just as the team will conform to you. You will all have to same position, same opinion, etc. You may have differences in minor details, but you will go along on the "big stuff".

You are suffering from the "echo chamber effect", because you only hang out with people that you think have similar ideology to yours. Your ideas are echoing back to you, and other people's ideas are passing through you, and being echoed back to them. Soon everybody think alike, and like seeks like. Such things does NOT happen when you have a mix of people holding opposite views and have a nice proper discussion of the issues.

The advent of internet only made it EASIER for like to seek like. You can find all sorts of bull**** on the Internet nowadays, and forums hosting such. If you can't find one, start one yourself. People will agree on absurd topics such as "ISIS has infiltrated every church in America" to "school shootings were staged with shill mourners".

After a while in the echo chamber, you will suppress your own thoughts because you reasoned that the your group would never accept your "anti-group" thoughts. That's known as the Semmelweis Reflex.

That's fine when the ideas are logical and proper, but when they are not, it can be very dangerous.

Scammers have understood this for a long time. They are out seeking sheeple who hadn't gotten wise to the schemes, esp. when the scheme caters to one of an universal wants: trying to make one's life better.  However, scammers will pervert such wants into feeding your fears and sell you a bogus solution.



Ever seen the news, where a crowd was yelling at a suicidal man on the roof to "go ahead and jump already"? WHILE the police was trying to talk him down safely? It's not a joke. It really happened. And more than once.

Ah, but you say, that's in the UK. But it also happened in the US... San Francisco, in fact. People actually cheered and laughed, like ghouls, when a man jumped off a ledge and fell to his death.  At least in San Francisco, they didn't yell "jump!" according to people on scene, but they didn't yell "DON'T DO IT!" either.

But you ask, how is this related to network marketing?

Consider this: are you *sure* you are really thinking for yourself, and not just repeating an echo you picked up from your team / echo chamber?

Are your thinking REALLY your own, or merely that you've been Borg-ified, and you're now just a drone, only able to repeat what the leader (Borg Queen) ordered?
Patrick Stewart as Locutus, the assimilated Je...
Patrick Stewart as Locutus, the assimilated Jean-Luc Picard
(Photo credit: Wikipedia)

How would you know if you're really thinking for yourself, without getting AWAY from the echo chamber / team and see if you think differently, by hanging out people who don't think like your team?

Will you believe stuff like "the 1% are out to oppress us, and this scheme is my chance to 'stick it to da Man!'?" or somewhat more benign "The 1% have secret programs to make money and this guy can help me make that kind of money... if I give the money to him"?

You may if you're in an echo chamber, full of other people who also want to believe.

And your leaders and fellow members fervently want you to STAY in the echo chamber, even as you realize you may have made a mistake, that you were hasty in making that decision. They will pull every string on you, insult you ("you're clearly not ready / not good enough"), shame you ("you're a quitter who let everybody down"), pray for you ("you're clearly confused and we pray for your wisdom"), and perhaps, even lie to you ("everything will turn out all right"), to force you to change your mind and reaffirm your earlier hasty decision.

Why would your team leader tell you to "avoid negativity", which basically means they *want* you to stay in the echo chamber, and NEVER consider there may be a different way to look at the situation?

Why are they megalomaniacs who cannot admit they could be wrong?  Why are they so confident, when wise men throughout history have told us that the really smart people are full of doubt, and it is the stupid that are so sure of themselves?

Why do they want you to avoid exposure to the possibility that they could be wrong? What are they afraid of?

The answer is simple: they are afraid they will lose control over you.

They do NOT want you to think for yourself.

They want you to be sheeple, and stay sheeple.

Sheeple don't run. They stay around to be fleeced.

Don't be sheeple. 


Scam Psychology: Victim Mindset is all about asset recovery, not justice

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JusticeAlwaysLate, a FB blogger in Malaysia who primarily blogs in Chinese / Cantonese, recently relayed a little anecdote which I thought was rather... illustrative of the victim mindset. The scam name is not important, but it's a pretty big one in China that resulted in arrests earlier this year called Nanning (南寧) any way, it goes like this:


有个南宁受害者来找哦,丈夫倾家荡产相信兄弟,投资了下去。先是云数贸, 然后圆梦都亏大本,兄弟建议他用南宁回本,有事他包。
A certain victim of Nanning scam came to tell a sob story. Husband is about to go bankrupt, believing in a buddy, invested everything, against and again, first it was YSM (a scam fronted by a Chinese guy), then YC and lost big in both. Buddy told him he can make it back with Nanning, and the buddy claims he'll cover the losses if it happens.  
这个丈夫就把所有钱丢进去了南宁骗局,留下老婆和父母,家里一直缺钱用。他问我怎么办。
Thus, this husband threw everything that's left into the Nanning scam, leaving wife and parents with nothing. She asked me, what should she do? Family needs money now to live.  
我说:我叫她报警捉人。。
I said, go to the cops, have the perps arrested.  
她又说:不能,这样会拿不回钱,兄弟答应丈夫在等一段日子就会把钱还给丈夫。。请问现在该怎么办?
She said, no way, can't get the money back that way. Buddy promised that he'll make up the money later. What should she do now?  
我说:那么给我他们的资料与细节,我炸到他们出门都没得躲,
I said, give me their information and background. I'll reveal them so they can't hide anywhere.  
她又说:这样就更没有办法还钱给我们了。请问现在该怎么办?
She said again, no way they'll return the money if you do that. Now what?  
我就说:现在是他欠你们钱,为什么你要替老千着想?
I said, why are you thinking for these crooks? THEY owe YOU money!  
她又说:不是不要报警不给你资料,等我们拿到钱了我们会去做的。
She said, It's not that she's not going to the cops, she had to get the money first, THEN she'll go to the cops.  
我说:那你找我干嘛?闲聊吗?
I said, so why are you here? Chitchat?  
她的最后回复是:好,当我看错你了。
Her final answer was, alright, guess I was mistaken about you. 

The victims have primary emphasis on recovery of money. They realize they had been deceived, but they don't want justice done. They want to be made whole first. This greed (what got them scammed in the first place) lead them to believe that they will get the money back, either someone promised them so, or they decided to lock their morals in the basement and went all out recruiting (i.e. turned judas goat) so they can get their money back.

They don't realize that the money is GONE, and they've just seeing excuses after excuses.



It is this type of mindset, that emphasizes recovery (I want my money back, justice everybody else can wait) that makes financial scams, esp. large group financial scams like pyramid schemes and ponzi schemes so difficult to prosecute. Victims are often so traumatized, they go into denial mode, afraid of revealing amount of their losses because they somehow believe they can get the money back, which only opened them to reload schemes.

In fact, half of ponzi scheme victims attempt to recover their losses through the courts, according to a group that specialized in financial recoveries. The victims instead chose to either walk away (I don't want to talk about it) or negotiate with the scammers (I think they can give the money back, if I can just talk to them...)  That's right, HALF of the victims don't want to talk to the police.

Same thing happened in the Pigeon King Ponzi in Canada, with Arlan Galbraith scammed a lot of simple farmers (Mennonites, Amish, etc.) in both US and Canada out of millions buying "pigeon breeding stock".  When Galbraith was blacklisted in multiple US states, he declared bankruptcy, and got the whole thing tied up in courts, and victims don't want to go public because they were afraid of jeopardizing their potential money as a creditor in the bankruptcy. It took an investigation by CBC TV to prod the RCMP into an investigation, and that took another year. The end result is Galbraith did go to prison... for a little while, after taking in 45 million. Even today, according to NY Times, "Even a few of his victims weren’t sure whether he meant to con them. ". 

Yet another example was Zeek Rewards, a 850 million ponzi scheme that ran from 2010-2012. When Secret Service and the rest of the agencies raided Zeek and closed it and sent everybody home, people were in denial. First they claimed "it's just employee taking out some files" (it's actually SEC and Secret Service agents confiscating office files) then when the Secret Service agent at the door started to identifying themselves the next day getting the name of victims, many still don't believe they had been scammed. Rumors were flying everywhere, like "Zeek will move to Europe", "SEC didn't have a case" and "Paul Burks, owner of Zeek, was betrayed by his own attorney."   Victims refused to admit they are victims, or they were victims of the government or critics, and so on, because they don't care about the crime. They just want to make THEIR OWN MONEY back. Everybody else can go pound sand UNTIL they got their money back, and they don't care how, even if they have to keep the scam going.  

What's TRULY hideous was the conduct of certain individuals, insiders, really, who had worked for Zeek as a consultant, went on to claim that he has evidence that can prove Zeek is innocent, but he needs money from other Zeek supporters to hire an attorney to go after the SEC. It was rumored that he did manage to raise altogether about 100K and spent most of it on himself. There was no evidence, and the rest of the money went to a no-name attorney from a no-name lawfirm who filed a couple useless motions that got denied. It's just poetic justice or karma that this guy later was nailed for Federal fraud, claiming damages from a victim compensation fund that he was not entitled to. 


The point is victims of a financial fraud just want to be compensated, "made whole". They don't care by who. Any other concern like "justice" is secondary.



Scam Psychology: The Pressure to Excel and Conform (and the courage to turn away)

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People from all walks of life join MLMs, often without sufficient due diligence. Even if they did, they often convinced themselves (Semmelweiss Reflex) to suppress their own feelings of revulsion and doubt to keep going, even if it involved stepping on the back of other people to success, as well as lie, tell half-truth, and other things that are soul-crushing.

Listen to this former Mary Kay sales director (one rank away from the highest: national sales director, top 2% of all participants) when she walked away... Because she realized her success came at expense of other participants.



You can read the rest at pinktruth.com, or watch the full 20/20 episode here. Skip to half way point to get to the story directly.

The sad truth is some people NEVER wake up from this self-denial, because they crave outside approval so much, they were willing to forgo their ethics for outside approval.

Let this be a warning to all... "success" may come from stepping on other people's backs, even if they were smiling when you do it.



Scam Psychology: Misconstruing quote from Zig Ziglar about Positive Thinking

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Every once in a while, you'll see some MLMer pull out this quote as a reaction to criticism:
Positive thinking will let you do everything better better than negative thinking will. 
Remember, this is in reaction to criticism, not "general application", that the quoter basically threw the quote out, meaning "why are you so negative? think positive!"

Live video feed of Zig Ziglar speaking at the ...
Live video feed of Zig Ziglar speaking at the Get Motivated Seminar at the Cow Palace in Daly City, California.
(Photo credit: Wikipedia)
Some of the folks may have even gotten the source, Zig Ziglar, correct. Zig Ziglar is a almost legendary salesman and motivational speaker. He has left a lot of positive legacy when he died in 2012 after decades in the field.

I have a lot of respect for Zig Ziglar, which is why I need to point out that this is a total mangling of the original Zig Ziglar quote, and is taken out of context.

In other words, Zig Ziglar NEVER meant for this quote to be used in deflection of criticism. And to understand this, you need to read the ENTIRE quote by Zig Ziglar, which will prove it was taken out of context.

Follow me...



The quote originated from Zig Ziglar's book "Raising Positive Kids in a Negative World" (2002) (listed under religion and spirituality) . Here's a screenshot of the relevant page as shown on Google Books:

What positive thinking and negative thinking do. No, positive thinking won't let you do anything; but it will let you do everything better than negative thinking will. Positive thinking enables you to more effectively use the ability, training, education, and experience you have. 

Do you see the complete meaning from the full quote? Positive thinking ONLY WORKS when you already have ability, training, education, and experience.  If you don't have the ability, training, education, or experience to succeed, then no amount of positive thinking will be able to help you succeed.

Positive thinking helps you make the most of what you already have. It does not give you anything extra. Given all other factors are equal, then it's better to have positive thinking than negative thinking.

If people are telling you that you don't have the necessary ability, training, education, and experience to succeed, that is NOT negative thinking. That's reality. And your refusal to accept it is denial. And that is dangerous. 

Positive thinking is not an additional factor that can compensate for lack of ability, training, education, and experience. Positive thinking will not allow you to overcome the lack of such. Thinking positive will not let you run a marathon without sufficient conditioning, or get a Ph.D without studying, and so on.

If your upline is teach you such attitude, that people telling you the truth are "negative thinking" to be ignored, that you should go "all in" no matter your ability, training, education, and experience, you may want to reconsider working under him or her, because s/he is teaching recklessness... and your neck is on the line, not his/hers.

Beware of people who teach positivity without telling you the nuances.

MLM Basics: Is there such thing as "good MLM"?

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The MLM Skeptic has been asked repeatedly, "is _____ a good MLM?"

The short answer is: I don't know.

The longer answer is: I don't know. I can't do your due diligence for you, as I am not you.

But perhaps here's a more philosophical question... Is there such as thing as a "good MLM"?

Almost every MLM claimed they are good, and some may go as far as point out a few "bad apples" that had been stopped by government action, but they won't name a running company, unless the company's so egregious nobody is surprised they got shut down, such as Monavie head outright stated that Zeek Rewards is a ponzi scheme.

But first, we have to answer the question...

"What is a 'good mlm'?"

Good for the participant, good for the society, or good for the owner(s)?

I am going to assume that by asking this question, the asker is looking for the right company to participate in, and therefore, 'good mlm' means a company that justly compensates the participant for the effort put in. The other two factors (good for owner, good for society) are not really relevant for the participant, but they'd be nice to have.

But what exactly means "justly compensates participant for the effort put in?" While it may be "obvious" to everyone that one wants to be paid the maximum amount for doing minimal work, the real world is exactly the opposite... companies want you to do the maximum work for the minimum pay. The actual amount of work and pay is somewhere in between... at least, that's what's supposed to happen in a real job. Nobody want to be paid peanuts for hard labor, and no company will pay 1M a year for doing something that can be done in a few minutes with minimum skills.

The next question we have to answer: in MLM, are you rewarded for your own efforts?

But you're only PARTIALLY rewarded for your own efforts. Depending on how many levels of downlines you've developed (and how well they sell), you may make practically nothing based on your own efforts (your PV, personal volume is bare minimum), and you live mostly on the commission based on your group volume (GV) generated by your downlines.

In other words, the longer you spend in the business, the more you're rewarded for OTHER PEOPLE'S EFFORTS, as you build up your team. In fact, many MLM participants only knows how to recruit downlines. They can't sell the products they are supposed to be selling, and just buy the products themselves for self-consumption just enough to qualify for commission based on group volume.

And that's assuming you are in a real MLM selling real products

Keep in mind those "real product" MLMs can be illegal too. Just look at FHTM and Vemma.


Critics of MLM calculated that 60% of new MLM participants quit within the first year, and 90% quit after several years, often racking up losses of tens of thousands of dollars. While I don't have anything to confirm or deny these numbers, I do have some numbers directly from Direct Sales Association, the MLM industry group...

According to the DSA, average sales per MLM participant in the US for 2012, is about 2000 PER PERSON PER YEAR. And that's not profit or commission. That's just basic revenue / sales.

Assuming you consider your time to be worth $15 USD per hour (and that's "minimum wage" in some cities), and assuming out of that 2000 in sales you can take 20% profit (after expenses, probably overly optimistic),  that means you can spend 27 (2000*0.2/15=26.67 rounded up ) hours a year, or roughly half an hour a week, on MLM to be making $15 / hour, assuming 20% profit (after expenses)

In conclusion, there's NO WAY as an average MLM participant to be making much, if any, money.

Average Participants makes minimal money for dozens of hours of work

Have you looked at an income disclosure form lately? Here's a disclosure from Amway for 2013:

The average monthly Gross Income for "active" IBOs was USD $183 (in the US) / CAD $206 (in Canada) in 2014.
53% of IBOs in the US (and 49% of IBOs in Canada) were considered "active" (in 2014)
source: Achieve Magazine, published by Amway, August 2014 issue, from AchieveMagazine website
Amway is actually talking about actual sales, NOT commission which is different from most other mLMs. What should be read between the lines is commission earnings for most participants will be minimal due to lack of downlines, who also makes minimum sales.

If you can spend only 30 minutes a week to make this sort of money, it may be worth it, but you'll probably spend dozens of hours per week, attending meetings, selling stuff to friends and relatives, and so on, thus making so much less than minimum wage it's almost comical.

This situation will last until you build a sufficiently large "organization" (of downlines) so you can live off other people's efforts (who will be making less than minimum wage, like you did before).

In other words, MLM definitely does NOT compensate you appropriately for your efforts, at least for the first year or two.

Thus, MLM makes no sense for part-time work, and requires a MAJOR commitment (and savings enough for living expenses for a year or more) if you got into it as a true "new business" (i.e. 12 hour days for a year). This is confirmed by MLM veterans, such as Richard Bliss Brooke, who wrote "this process (building up your MLM business by selling and recruiting downline sales "empire") requires 2-5 years of dedicated and successful efforts... A person might earn a net profit during their first year and they might not...".

Are you sure you can afford to make such a decision assuming the MLM is actually legitimate, which it may not be, AND assuming you are under an upline who actually want to teach you to sell, rather than just yell at you to recruit and shame you if you failed to reach your target?

Will you run into an upline insisted that you must "use" the products you sell (which makes him money) and you end up "monkey see, monkey do"? Will you teach it to YOUR downlines, who also "monkey see, monkey do" (which makes you money)?

Will you run into an upline who runs his/her sales group as a cult of personality that insist "my way or the highway"? That any questioning of authority will not be tolerated? That any "success" (meeting quota) is publicly praised and failure (to meet quota) is publicly shamed? That "dress code" is enforced, and founder to be idolized? That any criticism is to be ignored? That "quitters" are no good?

Will you be exploited by pushing your psychological buttons such as Ikea Effect and Sunk Cost Fallacy?

It's also ironic that a lot of MLMs were advertised as the way to "own your own business, escape from the clutches of the 1%" when it actually is making the 1% (the business owner on top) rich while you toil away making less than minimum wage.

Crunch the numbers, check reality, rather than chasing false hopes and dreams.

That's what scams do: they sell your own hopes and dreams back to you.

Don't be scammed. Go in understanding all the factors, not just the promotional material.


Scam Tactics: Attribute Transfer

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Scammers want you to trust them, and they usually try to invoke something that we respect and revere, then use "attribute transfer" to get you to transfer the respect and reverence onto the scammers. Many scams invoke religion, patriotism, celebrity, and such, in order to transfer authority, sanction, and prestige to their scam, so that the victims are more likely to accept it than reject it out of hand.

What is Attribute Transfer? 

Attribute transfer relies on easily recognized symbols linked to popular and accepted concepts. Cross, Jesus, Flag, Cartoon, Prayer, Military Service (in some areas), large and old companies, famous investors with loads of money, scientists and doctors (in white lab coats) and so on. They wish you to associate the attributes of the popular concept or symbol with this new scheme that they have.

It can be summarized as "we are kinda like that more popular thing".

This is related, but not the same as excitation-transfer theory in psychology, which is defined as "how residual excitation from one stimulus amplify the response to a different stimulus". One of the most often given examples is the cliche advice "take a girl on a date to do something really exciting like roller coaster in hopes of she associate the excitement with you".


Profitable Sunrise brochure
using Christ the Redeemer image

Example: Profitable Sunrise 

Profitable Sunrise is an international ponzi and pyramid scheme shut down in 2013 that supposedly operates out of England and solicited investments with slogan "profit with every sunrise" (which is itself a symbol) and also used the symbol of the "Christ the Redeemer statue" in Brazil (see right).

Profitable Sunrise promised payout of 1.6% to 2.7% DAILY and justified these profits by claiming that they make short-term usurious rate "bridge loans" to large businesses. Yet nobody in Europe can track down this company. The executive, "Roman Novak", apparently does not exist, as no one seem to have ever met him.

In the US its most notorious promoter of Profitable Sunrise was Nanci Jo Frazer of Ohio, who used a church / charity called "Focus Up Ministries", which was later renamed "Defining Vision Ministries" for her recruitment purposes, along with her husband and another co-conspirator.  As a part of settlement with state of Ohio, they are to pay back $108146.61 over the next TEN YEARS, AND have her "ministries" dissolved. The fine is substantially reduced from original judgment of 710000 dollars.

Nanci Jo Frazer and gang was also known to have released fake news that claimed she had been exonerated. You can still find it when you Google her name. It's bogus.

Scammers invoked attributes of religion, Jesus, sunrise (a generally good symbol), and so on to make their scheme look more realistic than it is.



Example: USFIA


USFIA started back in 2012/2013 when it infiltrated China as "American Mining 美洲犬業" claiming to offer amber jewelry at discounted prices, but will pay people if they invest money in "amber units" AND introduce yet more investors. Its owner, Steve Chen 陳力 had several previous ventures including Amkey and NGTalk that had failed or withered. Chinese government caught on in 2014 and arrested over a dozen local representatives in a nation-wide raid, but failed to stop the scam as Steve Chen operates out of the US city of Arcadia, in the suburbs of Los Angeles and based his USFIA (and various other entities, such as AFG) there. Two of the suspects escaped China to Thailand, and was repatriated as a part of "Operation Foxhunt 2014". However, the root of the problem was not destroyed, and USFIA quickly rebooted itself by late 2014 by adopting a new American name: US Fine Investment Arts, and a new Chinese name 富豪集團 (Royal Group), and shifted to "investment in Gemcoin, a new cybercurrency backed by amber". It then proceed to claim their cybercurrency is "approved" by California law, and just look at Bitcoin's meteoric rise.

USFIA was closed in 2015 by coordinated raid between SEC, State of California, FBI, US Marshal Service, and so on. A receiver took over the company and fired all employees immediately and proceed to take inventory of all assets.  Receiver's first report shows that they were barely able to find about 20 million, and Steve Chen has chosen NOT to provide a list of his assets, claiming his 5th amendment privilege to not incriminate himself. All the supposed amber jewelry with astronomical prices are vastly overpriced, and supposed inventory of amber to "guarantee value" is worth "nominal value", i.e. souvenir grade, not gem grade. The "law" that Steve Chen and minions claimed permitted Gemcoin actually repealed a law that says business may ONLY use US dollars and in no way validates or approves "Gemcoin". There are even rumors that one of the VPs in the company claimed to be related to President Obama. There was no proof that Gemcoin is actually a cryptocurrency like Bitcoin. So far the only proof appears to be a PDF file that contained screenshots of "transactions" online.

USFIA is also famously used several celebrities at its events, including former mayor of Arcadia John Wuo who appeared in multiple events singing praises of the scheme and its leader. In 2015 John Wuo was a city councilman and quickly resigned after USFIA office was closed, citing "health reasons".

Scammers tried to invoke attribute of state government, bitcoin and cybercurrency in general.


How to See Through Attribute Transfer


To see through attribute transfer, you have to look through the examples and stick with just the facts and general idea, such as

  • What does the speaker want? 
  • According to the speaker, WHY should you believe the speaker? 
  • What attribute are they trying to transfer onto themselves from the symbol? 
  • Is there any LEGITIMATE connection between the speaker and the symbol?
  • What's left of the speaker's argument AFTER you cross out the attributes?   

Scam Psychology: Idiot's Guide to Idiocy... and how to avoid it

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It is very often in scam psychology that the victim refused to accept that they have been victimized, and they often square off against the critics. However, here are some questions they should be asking themselves... Are they *really* arguing best evidence... or merely best "intentions"?

1. What exactly are you arguing for? 

Often, proponents of a scheme have very different arguments. The ones I've seen are:

(Scheme name) is [mostly] legal!
(Scheme name) pays me [and that's good enough for me, never mind legal!]
Go pick on some [bigger evil] and leave (Scheme name) alone!

Some folks even managed to do all three at once.

But think about it, only the first item is a real "defense" of the scheme. The other two are tacit admissions that the scheme may indeed be shady, if not outright illegal.


2. Are you arguing or merely denying? 

There's a big difference between arguing, and denying.

Arguing means both sides present their best argument, and analyzes the other side's argument for flaws.

Denying simply means you insist that the other side is wrong, wrong, and wrong, without analysis.

Don't see the difference? Watch this comedy skit "Argument Clinic" courtesy of Monty Python:




3. Does your argument SOUND weak? 

A lot of scheme defenders, when trying to defend certain potentially illegal parts of the scheme, end up sounding like a whiny cat, because their argument end up as...

"But you don't *have* to do that... It's optional."

For example:

"But you don't have to recruit more sellers (It's just that you make more money if people you recruited also recruit more sellers)"

"But you don't have to buy stuff every month (If the people you recruited buy enough so your "group volume" qualifies you for commission)"

Now repeat that in a whiny kid's voice, and you'll see how weak that argument was.

It's also a bogus argument, because it's tacit admission that the scheme has at least one potentially illegal / amoral component. It's roughly equivalent to "I smoked (pot) but I didn't inhale".  That's a VERY weak argument.


4. Are you arguing from "might" or "meek"? 

Are you using "might" or "meek" for your arguments? Or just whatever that suits your argument? Are they even relevant?

Many promoters often invoke bandwagon fallacy (i.e. X people joined, Y amount of money spent, Z celebrities endorsed, etc.) That's the "might".

Many promoters adopt the "meek" attitude when they whine about government persecution, conspiracy of rich, and so on and so forth.

They are NOT relevant! Those are WEAK arguments! Find better ones!




5. Are you arguing for continuing the status quo? 

Sometimes, promoters don't argue for a particular position, but rather, "just leave the thing the way it is". They are not arguing whether the scheme's legal, or illegal. They *want* things left in limbo... so they can keep profiting from it.

The problem is this, again, is a very weak argument, because they are basically saying "as long as it profits me I don't *care* whether it may be illegal!"


6. Are you arguing from badly applied "common sense"? 

Common sense are logical shortcuts that we've been taught since birth, and they are only applicable for specific situations. Scams are specifically designed to appeal to your common sense (but in the WRONG situation) rather than your logic.

For example, "if my best buddy recommends this opportunity, he wouldn't lie to me, so it must be worth a try", is bogus, because your best buddy may have been defrauded and thus, while completely honest, is simply still wrong.

If you are arguing that "common sense dictates..." you should reexamine your position carefully.


7. Are you arguing because it agrees with you and/or benefits you? 

Many scheme supporters often argue by talking about themselves, claiming they looked at all the relevant facts and came to their conclusion that the scheme is legal, through their own impeccable logic.

Which is the same as "Look, I know I am right, because I checked several times, and each time I found that I agreed with myself."

Or worse, "Look, I know I am right because I'm making money from it (and you're not), and I agree with that."

That's mental laziness, not logic.


8. Are you arguing because you can't accept the truth? 

People, when in shock by the truth, go into a condition known as "cognitive dissonance". They have two conflicting beliefs in their head. One they had believed for a long time, then a different truth that cannot be denied, at least in the short term. They then go through 5 stages of grief: denial, negotiation, depression, anger, and acceptance (not necessarily in that order) until they resolve the dissonance in their heads.

Some scheme promoters, when confronted with virtually undeniable evidence that their scheme is potentially illegal, goes into the denial and negotiation phases, either denying that their scheme can EVER be illegal, or perhaps admitting that their scheme is only a LITTLE bit illegal and want to negotiate on just HOW illegal their scheme is, not realizing that facts cannot be negotiated. Facts are just facts.

It is also often that promoters have really believed that they "found the one" opportunity they love, and they threw their heart and soul into it. And they are in denial that not only they may have lost their invested money, they are now going to be hounded by friends and family they had recruited, and they cannot accept that they could have dragged in so many people s/he held dear into the scam... So it can't possibly be a scam.

Denial and negotiation phases of cognitive dissonance are not real arguments, but merely emotional phases.


Conclusion

If you are indeed not really arguing, perhaps you should just admit defeat gracefully, and accept that you have been tricked, scammed, whatever.



Inspired by http://www.psychologytoday.com/blog/ambigamy/201212/the-idiots-guide-idiocy
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Breaking News / Woo Files: Nu Skin Taiwan head accused of illegally importing medical devices

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News from Taiwan via Malaysia, original Chinese and English translation provided. (Thanks to JusticeAlwaysLate for spreading this bit of news)

台灣.新北市18日訊)在馬來西亞、新加坡和汶萊都設有分公司的著名直銷公司美商如新華茂(NU SKIN)台灣總裁姜惠琳與多名幹部、高階直銷商,涉嫌明知產品“BODY SPA機”是未獲衛生機關核准輸入的醫療器材,仍在2012年間從香港帶1萬多套回台販售,獲利約1600多萬元台幣(下同.約210萬令吉)。新北地檢署昨依違反《藥事法》等罪嫌,起訴姜女等31人。
(Taiwan, Taipei Dec 18th) Well-known direct selling US company Nu Skin, with branches in Malaysia, Singapore, and Brunei, has its Taiwan CEO Huilin Jiang, along with several officers and high level members accused of knowing that the product "Body Spa machine" is an "not permitted as import" medical device, yet brought back over 10000 kits from Hong Kong for sale in Taiwan, profited over 16 million NTD (almost $500000 USD). Taipei Public Prosecutor's Office has now officially charged 31 people, including Ms. Jiang, with violations of "Drug Regulation Act". 
美商如新集團1984年在美國創立,以直銷方式銷售、製造美妝保養品,至今已跨足全球54個市場,1992年設立台灣分公司,2007年由姜惠琳接任台總裁,還曾贊助2013年的台北101跨年煙火。
Nu Skin is founded in the US in 1984 and operates via direct sales of cosmetics, and is now in 54 markets around the world. Taiwan branch was established in 1992, and Ms. Jiang took over as CEO in 2007. Nu Skin Taiwan was a sponsor of the 101 building New Years Fireworks and festivities 2013. 
全案起因於前年,一名林姓賣家在網路上販售號稱能緊緻肌膚的“BODY SPA機”,被檢舉未經核准,林到案供稱是向如新直銷商購買後,獲緩起訴。
The case started three years ago. A "Lin" advertised a machine online for sale called "Body Spa" that claimed to tighten muscle tone, and was investigated as the device is not legally permitted for sale without Taiwan FDA approval. Lin cooperated with investigators and said he got the machine from Nu Skin reps and had his case continued. 
不過檢調追查,發現衛生署早在2011年,就曾以未附安全證明文件等理由,禁止如新進口“臉部SPA機”,但姜惠琳仍在同年底,未申請主管機關核准,就另外核可BODY SPA機行銷策略,由如新的寰宇領袖、藍鑽級主任等高階直銷商,向下線會員推銷,稱可向海外預購BODY SPA機,然後趁集團在香港舉辦大中華區年會時領貨。
Further investigations show that the Taiwan FDA had denied Nu Skin's import of Body Spa back in 2011, due to various reasons including "no safety documents included". However, Ms. Jiang went ahead, later in 2011, and approved sales strategy of Body Spa kits by (Cosmo?) leaders, Blue Diamond level execs, and such highest level members to be promoted to lower level members, claiming that the high level execs can pre-pay for these new machines and stock them overseas, and everybody can pick up their stock when Nu Skin held their convention in Hong Kong later. 


檢調查出,如新高階直銷商果然從香港帶回1萬零22套,每套含兩台BODY SPA機、6支緊緻凝膠與6支緊膚乳的套組,再以每套3萬多元(約4000令吉)價格販售給台灣會員,共獲利1600多萬元。
Investigation shows that high level members brought back 10022 kits of Body Spa from Hong Kong. Each kit contains two units, and 12 lotions of 2 separate types (6 each), Such kits are then sold to low level members for over 30000 NTD (~ $914 USD) each, with total profit of over 16 million NTD ($488000 USD). 
姜女到案辯稱,不知BODY SPA機是醫療器材,且這些是直銷商在支援香港幫忙發放,業績算香港的。但不少直銷干部供稱,台灣分公司有推廣BODY SPA機,若賣出也可分紅,且如新也利用內部電子郵件,提醒直銷商,在說明會介紹產品時要小心,避免衛生人員到場錄影蒐證,因此認定姜女和公司高階主管、直銷商明知而故意販售未經核准的醫療器材。
Ms. Jiang told investigators that she did not know Body Spa is considered medical device, the members were merely helping out fellow sellers in Hong Kong, counts as sold from Hong Kong (which doesn't fall under her control). However, many members said that Body Spa was definitely promoted directly by Nu Skin Taiwan, there is commission for selling them, and Nu Skin Taiwan sent out internal e-Memos reminding sellers that please be careful when demo'ing the product, don't let Ministry of Health officers film the proceedings. Thus, investigators concluded that Ms. Jiang and the high level execs and high level members not only knew but also deliberately sold unapproved medical devices. 
記者昨未聯繫上姜,如新公關強調,“堅守台灣法令,未在台販售該機,盼經法院審理可還我們公道。”
Reporters were unable to contact Ms. Jiang. NuSkin's PR department emphasized "We are compliant with all applicable laws in Taiwan, and we did not sell such machines in Taiwan. We have faith that the truth will prevail and the court will treat us fairly. "

How a MLM cult is like ISIS, and how to defeat both of them

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A recent episode of NPR's Hidden Brain that talked about terrorism, and how does the psychology of radicalization work, got me thinking, as the cult psychology of ISIS shares many similarities with cult psychology of a MLM cult, and this new angle to take on how a cult gains control over its members provides some very interesting insights into how it works, and some idea on how to combat it.

How is ISIS like a MLM Cult?


ISIS is like a MLM cult in that they entice members into self-destructive behavior by convincing them they are doing it for the greater good.

According to Scott Atran, an advisor to UN and the White House as anthropologist, explained that most ISIS fighters genuinely believe they are fighting for a "great cause", i.e. establishing a Caliphate, and generally it is the people in their 20's that were enticed by promises of glory, adventure, and purpose. They also believe that world is a disasterpeaceful change is not possible, self-sacrifice is honorable, ends justifies the means, and utopia is possible. ISIS recruit by leveraging idealism in naive young people already ostracized from society.

Now think about how MLM cults leverage a very similar mindset... MLM cult believers genuinely believe they are building a better world by spreading the "great product and great opportunity" among the masses. Many MLM cult believers do believe they cannot succeed in a regular job market. Indeed, that is a mantra often repeated in MLM cults, like "J.O.B. = just over broke" and so on, and MLM promises glory (recognition for accomplishments), adventure (travel all over, often exotic places) and purpose (spread the gospel of prosperity). There's also belief that traditional job CANNOT allow one to be financially secure, and utopia (financial freedom) is possible. In many ways, MLM cult preys on idealism of people who can't get a regular job (often through no fault of their own) and ostracized from society.

So to summarize:

  • Both ISIS and MLM cult tell followers to believe in a great cause
  • Both ISIS and MLM cult promise followers glory, adventure, and purpose
  • Both ISIS and MLM cult tell followers world is a disaster
  • Both ISIS and MLM cult tell followers existing ways do not work
  • Both ISIS and MLM cult tell followers utopia is achievable
  • Both ISIS and MLM cult leverage idealism in people  

It's scary how similar they sound, if you break it all down and get to the core message.



How is ISIS NOT like a MLM Cult?


In a way, ISIS is being far more honest... They tell their fighters that by being martyrs for the new Caliphate they will be rewarded in the afterlife. If they get any benefits, like getting a child bride who's foolish enough to come join ISIS, that's extra. As for any girls who want to marry a great fighter? Nobody told them they will not be treated like property, and once they were raped and gotten pregnant they will never be allowed to leave. ISIS generally don't lie, they simply... neglect to mention. ISIS tell people they are fighting to establish the great Caliphate. In reality, it's killing unbelievers, killing anyone "on the other side".

A MLM cult behaves in a very similar way... neglect to mention key aspects of the scheme. A MLM cult expects the members to keep buying stuff, shame them when they can't afford them any more (self-destructive behavior), and cast them aside (as they have no further value). In a MLM cult, the only value of the members is to 1) recruit more members, and 2) keep buying stuff. Once you exhausted your closest associates (can't recruit), and exhausted your financial means (can't buy), you are worthless.

But the key difference is ISIS at least appeals to a greater ideal. MLM cult simply appeals to... greed. Furthermore, ISIS lets the recruits know they are expected to die (and even dead, they will attain some sort of reward in the afterlife). MLM cults, however, don't tell the recruits about sacrifice at all. Some may say "but selling is hard work" and so on, but the reality is the early joiners have all the advantage... and later joiners have almost no chance of making it. That's why there's "the churn"... people constantly switching opportunities, hoping to join in early "this time".

So how do you defeat such? 


Labeling the other side as "evil" does not work in general. No matter which side we are on, we see the other side as evil. Even something as simple as US Republicans vs. Democrats, the members view their own party as correct and the opposing body as being wrong, even when the two sides are often similar in ideology. It's known as illusion of asymmetric insight.

Atran does not think that teaching moderation would work against extremism, even though other experts suggest that moderation should be taught as a part of education to allow the youth to understand how to work through the system in order to create change rather than attempting to destroy the system.

Atran agree that education, i.e. reach the potential recruits early, is the key to to "drain the swamp" and dry up recruits for ISIS. Atran thinks that there needs to be better "power networks" of elders or respected people and recruiters out to identify potential recruits, get to them first, and teach them moderation and purpose before ISIS can get to them, i.e. do a better job than ISIS.

A different expert, Merari, said that defeating ISIS militarily will cause ISIS to lose its lustre to the potential recruits.

Can such be applied to defeat the MLM cults? Perhaps.

1) We need better disclosure

Credit card issuers are required to put up a CLEAR and UNDERSTANDABLE table of the interest rates and grace periods. So why doesn't the business opportunities like MLM have a similar disclosure? Because DSA kept lobbying Congress to prevent laws requiring such disclosure from getting passed. According to DSA, printing a one-page summary of average earning disclosure, criminal background of founders/leaders, and references, and so on constitutes an "intolerable burden".

Which is patently absurd, of course. Franchisors, involving fees up to several million dollars, are often accompanied by disclosures that runs into hundreds of pages. And Franchisees who can afford to pay millions also have money to hire lawyers. It's the "common people" who buy into these MLM companies at a few hundred dollars that really needs mandatory disclosure.

Even what is required now, an annual income disclosure statement per company, are basically marketing documents that had its data massaged, mangled, and distorted through exponential scale graphs, weasel verbiage, caveats within fine print, "projections" based on partial data, and so on as to be virtually meaningless. A standard disclosure box similar to the credit card style box is needed.

2) We need more education on common sense and logic

There seems to be almost no class about simple logic nowadays, so people don't seem to recognize propaganda used against them. Critical thinking should be taught in elementary school, as a part of the common curriculum such as English, so students can learn how to decipher lies, half-truths, neglect to mention, weak arguments, and fallacies early on. Once they got this, they will be less susceptible to MLM cults (or any cult) propaganda.

What should you look forward to MLM and Direct Selling in 2016?

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It is now 2016, and as usual, positive thinkers are already out hating my blog posts already.

First reader comment of 2016 starts with:
You loser ...obviously couldn't make it in any MLM's - most likely your attitude and shallow thinking.
Hahahahaha.  This is the sort of typical potty mouth positive thinker type comment, though in this instance he was reacting to my comparison of "MLM Cult vs. ISIS".

The fact that he somehow thinks that "MLM Cult" refers to his chosen profession is rather amusing, isn't it?

But really, let's throw around some REAL numbers, compiled by Direct Selling Association (DSA.org) and the World Federation of DSA (sort of global DSA), the industry lobby group.  It's too early for 2015 numbers, but here's the 2014 factsheet, as published by DSA (US).

DSA factsheet 2014, http://www.dsa.org/docs/default-source/research/research2014factsheet.pdf

The key figures... 34.47 billion USD in 2014 US Retail Sales... by 18.2 million people "involved".

That's less than $1900 sold per "involved" person PER YEAR. ($1894 if you want to be exact)

And since people are joining faster than actual retail growth sales (8.3% vs. 5.5%), average retail per person per year is GOING DOWN. This is despite the PR spin, i.e. "more individuals generated more revenue in 2014 than any year previously".

And remember, that's retail sales, NOT PROFIT.  Actual profit will be FAR LESS. Even if you estimate a margin of 20% AFTER expenses, that is $379 per year.



It is difficult to estimate profit in MLM, since a participant earns two ways: actual retail profit, and commissions from downline sales (which goes by variety of names: override, bonus, commission, incentive, etc.)   And there are various ways to manipulate the system, such as buying just enough products to remain "qualified" to earn the commission (and make NO retail profit) assuming one has sufficient number of downlines to make the commission worthwhile despite lack of retail profit and real expenses of the merchandise.

(And obviously this assumes a legitimate MLM, not a product-based pyramid scheme)

I'm not going to get into a debate on what constitutes "active", as there is no industry wide definition of "active" vs. "inactive". Individual companies have their own definitions, usually based on amount of purchases per month. However Amway's definition, which also includes any registered presentation and/or attended a company event as being active, seem to be fairer than most. Still, keep that thought in mind as participant's numbers may be exaggerated somewhat due to "inactive" participants and drive down the average. However, can you really dismiss all the "inactive" participants as being lazy... or did they quit because they can't afford to keep up? What do they know that you don't?

A few relatively honest MLM companies do publish commission reports... Just not for 2014, but you can get some ideas:

Amway

Approximately 53% of IBOs in the US were considered "active". The average monthly gross income for "active" IBOs was USD $183 (in the US).   2013


source: Achieve Magazine, published by Amway, August 2014 issue, from AchieveMagazine website

This suggests that actual gross monthly income for all IBOs would be under 100 per month, or 1163 a year. However, I have to actually dig to find what's the caveat for this... turns out this does include retail, as this was the disclaimer at the bottom of such:
"Gross Income:" means the amount received from retail sales, minus the cost of goods sold, plus monthly bonuses and cash incentives. It excludes all annual bonuses and cash incentives, and all non-cash awards. 
So bottomline: Amway average income is approx. $1163 a year, TOTAL, and that's assuming the IBO is active EVERY MONTH (probably not). At this level, there's probably no annual bonus or such. People who achieve such bonuses are in tiny numbers.  The actual profit number is likely lower, under $1000, probably 9 months out of 12, or just under $900.


Herbalife

Herbalife's income disclosure 2013 stated that 88% of Distributors received no payments from Herbalife during 2012 (source here)  i.e. no commission. Yet in 2014 Herbalife's annual report stated that they paid out over 1.47 BILLION dollars in commission that year... to 456000 "sales leaders".

Assuming the sales leaders are the 12% that did get paid by Herbalife... and numbers didn't change by a MAJOR amount from 2012 to 2014... (it's an estimate, okay?)  that comes out to...  3.8 million Herbalife members. Divide 1.47 billion by 3.8 million and you get... average commission of $387 per year.

Add that to estimated average retail profit and you get $766 per year... average yearly profit (both retail and commission). Let's say they grew a bit. Let's call it $825 by 2014. Probably overestimated, but then...


So in conclusion...

According to MLM's own numbers (both DSA and major companies like Amway and Herbalife)... your ANNUAL income will be about 900 or so. That's obviously with a lot of estimates and average and so on, as I have no idea how are your expenses or how many hours you may work.

But if you are just starting, you are starting BELOW average. In fact, it'll probably take you a few years to go above average.

And this profit margin is UNLIKELY to change much... ever.

If you are trying to decide whether to make MLM a career... choose carefully, not based on some rah-rah cheerleading by your fellow MLMers, but study the facts, the actual numbers, and get at the truth yourself, rather than having distorted facts spoonfed to you to distort your thinking. 

No doubt some "positive thinkers" consider this plea for sanity "negativity" to be avoided...

But consider this: I don't give a **** whether you join them or not. If you get something useful out of this blog, good for you.

But they do care whether you join them.

Choose wisely.

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