Scam absurdities: "An honest Ponzi" is still illegal (duh)

January 30, 2016, 10:27 am

≫ Next: Scam Tactic: Deny everything, make up some other reasonable sounding reasons

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

Those of you who read articles in general may recall something about MMM... If not, here's a TL;DR version:

MMM, or Mavrodi's Money Machine, is a fraud company founded by Sergei Mavrodi, his brother Vyacheslav Mavrodi, and Olga Melnikova. With its start in 1989 Sergei tried to do legit business, but was chased down for tax evasion by 1992. By 1994, Sergei had gone into financial market and with the Russian economy in hyperinflation he was promising profit of 1000% percent a year with a full-on TV campaign as well as a "free metro ride day" where they paid for EVERYBODY's metro ride for a day in Moscow.

In 1993 and 1994 it was estimated that MMM was taking in 100 BILLION rubles PER DAY for its shares. Party finally ended in Mid 1994 when tax police closed MMM for tax evasion. However, Mavrodi was able to manipulate the victims into voting him into Russian Dumas (house of representatives) by claiming government closed MMM, not him, and if they do that he'll pass measures to pay them back. Elected official was also immune from arrest. Mavrodi's run came to and end when the Dumas chose to cancel his immunity in 1995, and MMM finally declared bankruptcy in 1997.

However, Mavrodi went on to start several more scams, including "Stock Generation" (closed 2002, Mavrodi arrested and convicted 2007), MMM2011, MMM-India, and MMM-Global.

The interesting parts about MMM2011 and the last few schemes is its.... "honesty", so to speak. MMM2011 was described as...

"This is a pyramid. It is a naked scheme, nothing more ... People interact with each other and give each other money. For no reason!" (source)

Which brings us to the "honest Ponzi"... Is it a Ponzi scheme if the owners admits to it?

Of course it is. Does a weasel stop being a weasel by admitting it is a weasel?

Yet that's what many scammers want you to believe... that as long as they paper over any irregularities with enough disclaimers... they can't be "liable".

Is there such thing as an "honest Ponzi"? That depends on what you mean by such a thing. What fraudsters try to get you to believe is by being upfront about "this is a scheme!" it can't be fraudulent.

As I said this is an “honest” Ponzi scheme. How is this fradulent (sic) when participants know what they’re participating in and how their money is being used????? -- "Paul"

But there are multiple levels of meaning here. A scheme can be illegal without misrepresentation... simply by violating laws that has nothing to do with how it presented itself.

In most countries, such as the US, chain letters that involve money are prohibited under postal laws and regulations. If you do it online, it becomes wire fraud, and most online money transfer services have strict policies against its use to fund such schemes. It may not be jail-worthy, but it is certainly not "okay".

For example, in Paypal's acceptable use policy it's clearly stated that

You may not use the PayPal service for activities that:

3. relate to transactions that (a) show the personal information of third parties in violation of applicable law, (b) support pyramid or ponzi schemes, matrix programs, other "get rich quick" schemes or certain multi-level marketing programs...

But here's the real headscratcher:

Who am I hurting when I send someone 200 dollars. I can send my money to anyone I want it’s no ones business what I do with my money and if someone wants to send me 500 who’s business is it? No ones. It’s a free world and we can do what we want with our money or is that wrong of us. -- "D Kay"

So what is D Kay saying? That he has a right to give people money, and other people have a right to give him money?

Sounds like typical "cash gifting" excuses... and that's just another name for pyramid scheme, in all 50 states of the US, and probably in your part of the world as well.

But the fundamental problem with the position is D Kay is claiming "right to be stupid". That's right... he wants the right to be as stupid with his money as he can be.

In that case, I'd suggest go buy lap dances and maybe a BJ or two (if you're a guy) or whatever makes you happy, rather than sending it to somebody you have no idea who.

At least you'd feel the lap dance and BJ up close and personal.

↧

Scam Tactic: Deny everything, make up some other reasonable sounding reasons

February 7, 2016, 1:34 pm

≫ Next: Scam Psychology: Presumption of hate

≪ Previous: Scam absurdities: "An honest Ponzi" is still illegal (duh)

When confronted with truth that contradicts their world view, MLMers often resort to denial, i.e. "that can't possibly be true". It's motivated reasoning, i.e. thinking with your heart, not with your head, and that means impulsive rather than logical decisions.

After the denial, then some alternate explanations was supplied with no proof in order to justify the view.

Recently on BehindMLM I encountered a perfect example of such.

On Feb 6th, 2016, commenter B.F. wrote on BehindMLM that MLM"Kyani" was "kicked out of the Norwegian direct selling organization (Direktesalgsforbundet) for using illegal health claims in the official marketing."

Less than 24 hour later, commenter "MLMexec" replied "Kyäni was not kicked out of the Norwegian DSA because of illegal marketing. They were trial members for a year and weren’t accepted as full members because Eqology and Zinzino joined forces to vote against it."

But is that true?

It's true that both Zinzino and Eqology are European MLMs (Zinzino is based in Sweden, right next door to Norway, and Eqology is Norwegian). So it's certainly possible both are members of the Direktesalgsforbundet. It's possible, but that is not proof.

Searching on Google for Kyani and Direktesalgsforbundet yielded this post:

Kyäni ble ikke tatt opp som medlem i Direktesalgsforbundet!
Styret i Direktesalgsforbundet valgte og ikke ta opp Kyäni som fullverdig medlem i Direktesalgsforbundet på medlemsmøtet den 14. november 2013.
Dette grunnet deres helsepåstander og måte de markedsfører sine produkter på. Dette er ikke i henhold til EU direktiver og Norske lover. I tillegg har de markedsført produkter i Norge som ikke er i henhold til Mattilsynets forskrifter.

Which autotranslates to (use Google, Facebook's translation kinda sucks):

Kyäni was not admitted as a member of the Direct Selling Association!
The Board of Trade Association selected and not take up Kyäni as a full member of the Direct Selling Association in membership meeting on November 14, 2013.
This is due to their health claims and way they market their products. This is not in accordance with EU directives and Norwegian laws. In addition, they have marketed products in Norway that is not in accordance with Food Safety regulations.

And yes, I checked, this is indeed authentic post from DSA Norway's official facebook account. Click through and see for yourself.

So MLMExec was wrong, and B.F. was right... Kyani wasn't even good enough to join DSA in its native country.

But would you have known that, if you had not done additional research? Depends on which side you already agree with.

If you don't like Kyani, you'd probably accept BF was right and MLMExec was just spreading conspiracy trial balloons. If you do like Kyani, you're probably mad B.F. was spreading "lies" about Kyani.

Will this have changed your mind? Probably not. If you don't like Kyani, learning the facts only reinforces your view. And if you do like Kyani, you'll probably still be sore that Kyani wasn't accept and will CONTINUE to insist it wasn't Kyani's missteps that led to its dismissal, but some sort of conspiracy where its competitors forced it out.

But the facts are facts. DSA Norway's official position is Kyani is not good enough to join, not some conspiracy.

The problem is you have to seek out such information, rather than take someone else's word for it.

So, why don't you? I can't and won't do all your research for you. As Morpheus said in The Matrix, "I can only show you the door."

The rest is up to you.

↧

Scam Psychology: Presumption of hate

February 10, 2016, 11:06 am

≫ Next: Do You Know Where Your Money Went If You Invested in a Suspect Scheme?

≪ Previous: Scam Tactic: Deny everything, make up some other reasonable sounding reasons

One of the more... insidious aspects of MLM is how its members will often NOT listen to "reason", even if it's coming from people they used to trust, like family members and best friends. They are often screaming for some understanding, that they really are trying to improve their situation, and why are people around them so... defeatist, and so on. They will appear to be completely brainwashed.

(Sidebar: China claims to have found a new type of paranoid disorder they temporarily named pyramid cult sales disorder. )

But what motivates such... hate? It's a combination of factors, but generally, it has to do with how you perceive people on the other side, and its origin was longstanding.

In a research by Liane Young at Boston College, it was revealed that both Democrats and Republicans (political parties in the US) claim that they were motivated by positive emotions such as love and loyalty to their party members, and their opponents were motivated primarily by hate and animosity.

In other words: "I think you hate me, therefore I hate you." It's basically preemptive hate.

Preemptive hate happens quite often in discussion of MLM. While the MLM critics sticks to the facts, often the first disagreement states "you obviously hate us/mlm". They then go on to imagine various reason WHY we would hate MLM, such as sour grapes, bitter aftertaste, conspiracy of competition, and conspiracy of the rich, frequently without addressing the evidence brought forth.

(Conspiracy theory plays such a large role in MLM thinking that I dedicated a different blog post to talk about conspiracy theories in MLM. )

However, that's not the primary danger when MLM went overboard. The main danger is when MLM turns cult-like, indoctrinating its members to hate their family and friends (for holding them back, for being so negative) and to ignore any all and all facts deemed detrimental to the business ("negativity" to be avoided) and live only within the echo chamber of fellow MLM members and be isolated from reality.

A MLM, either as a part of its corporate culture, or as a local cult of personality, would indoctrinate its members. While some amount of company indoctrination is expected about the corporate culture, there is little if any checks and balances in MLM, when compared to regular corporate structure, to make sure the leaders are doing the job properly and ethically. In traditional companies, supervisors and human resources department is supposed to supervise those below and stop abuses and unethical behavior. No such safeguards exist in MLM. And often, leaders take unethical shortcuts because nobody is there to tell them that's wrong. The ONLY validation they have is the sales numbers (and awards, which is based on sales numbers).

Often such rhetoric were bandied about:

Only your fellow brothers and sisters in the MLM would understand your struggle
Nobody else, not even your family and friends, would understand.
Anybody who criticize us are out to wish us ill, and you must ignore them
Only we have the truth. Everybody else by default are wrong.
and so on

As a result, indoctrination goes overboard and turns into a cult. Only the company and the leader are right, everybody else is wrong. Leader's decisions are not to be questioned. Failures are shamed and success are praised.

They didn't tell you about how this alienates you from you and your family and friends, esp. if the "camaraderie" goes overboard. It's not uncommon a member, who has a life partner that did not join, to receive advice from other members that "if your partner refuse to join, s/he is obviously a loser and you should leave him/her". And if you are thoroughly indoctrinated...

Are you being taught to hate by default?

↧

Do You Know Where Your Money Went If You Invested in a Suspect Scheme?

February 23, 2016, 11:01 am

≫ Next: Charity MLM? What a joke, and here's proof

≪ Previous: Scam Psychology: Presumption of hate

According to court documents made public recently, ZeekRewards ponzi scheme victims may have a longer wait if any money can be recovered, for millions of their money held by payment processor for Zeek being a high risk client, may have been in several Eastern European Banks that have been shut down for fraud, and chances for recovery is remote.

Zeek Rewards was a Ponzi scheme in North Carolina that ensnared MILLIONS of victims in the US and beyond by promising massive profit sharing from the alleged penny auction business if they "purchase" bids to be given away as promotional items and in return gets a profit share based on amount of bids purchased for the next 90 days at daily rate of up to 1.8%. The scheme collapsed in 2012 when facilities was raided by SEC and Secret Service agents and entire operation closed down. Since that time, a receiver has attempted to recover tens of millions of dollars held by third-parties, who were supposed to obey court orders not to move the money, and to be eventually returned. Yet it is clear now this order was not obeyed on many occasions, and tens of millions have gone missing.

Before the collapse of Zeek in 2012 Zeek consultant "Keith Laggos", MLM Expert, boasted that he helped Zeek management to move payment operations abroad. People then didn't ask why. The reason can only be that US financial institutions no longer want to touch Zeek. Now, millions of dollars are out of the US, and potentially out of the reach of the victims, all thanks to efforts of Zeek to continue operating its criminal enterprise by moving money overseas. If this all sounds confusing as heck, let's start from the beginning.

You see, Zeek has to "pay" people for the outrageous sums of money they promised... up to 1.8% "profit share" per day. Even if they only pay once a week, and there are procedures to follow, with millions of members that still means they need bank to handle the load, and by mid 2012, it's clear that nobody they talk to in the US wants to touch them any more. Before then they already switched banks several times, even though they were dealing with some of the biggest banks in the state.

So Keith Laggos, who gained MLM infamy by testifying in Federal Court that in his expert opinion, a Ponzi scheme (later convicted, despite his testimony) is NOT a ponzi scheme, helped Zeek moved payment operations overseas, by using Asian and European payment processors such as Payza and Payment World. And those companies, in return, require Zeek to keep a large amount of money deposited to pay out of... tens of millions of dollars. When Zeek was closed, a substantial portion of this "deposit" has been returned, but 13.1 million USD remains missing.

There are reports that the money may have been moved by Payza and Payment World into various Eastern European Banks, and two of which has since collapsed due to probes by various authorities.

Payment World, based in Hong Kong, is backed by Master Bank, based in Russia, which collapsed back in 2013, and it was a major banking scandal in Russia, as one of Putin's brothers was on the board of directors.

Payza's funds is believed to have been deposited with Victoria Bank in Moldova, but the fund may have been moved to TusarBank in Russia despite orders to freeze Zeek related assets. Tusar Bank collapsed in September 2015 and is being investigated by Russian authorities.

There were also widespread claims by Zeek victims that their credit card were charged by various entities outside of the US, including Korea, Hong Kong, Puerto Rico, Europe, and so on for their Zeek "bid purchases". Most of which were denied by the banks automatically, and Zeek was telling members to "allow those". Can you imagine how much fraud can be committed as these numbers got transmitted all over the world, just to keep the Zeek Ponzi scheme going?

Bottom line: Do you know where your money *really* is when you invest into a scheme? Do you have any chance of getting anything bank if something goes wrong?

↧

Charity MLM? What a joke, and here's proof

February 27, 2016, 9:52 pm

≫ Next: MLM Basics: Why a MLM Comp Plan is MORE important than the product, not less

≪ Previous: Do You Know Where Your Money Went If You Invested in a Suspect Scheme?

Here's a simple and logical premise: MLM and Charity does NOT mix.

Think about it. MLM is a MONEY MAKING enterprise, both for the company itself, and for the individual affiliates. Charity is.. altruism. The two goals are mutually conflicting.

That doesn't stop a bunch of lame MLMs from trying to cash in on the charity angle, some by claiming it is helping kids where you "donate" your money to them, and they will deliver the food to kids in some third world country. Another claim that by participating in their penny auction your bids will be partially donated toward a worthy cause. There are many other variations, but they all include a supposedly non-profit charity making profit AND income for participants.

And in 2016, it turns out that leader of one of these so-called charity MLM is the largest tax cheat in the state of Oregon.

A gentleman by the name of Randall "Randy" Jeffers.

BidsThatGive, launched by Randall "Randy" Jeffers in 2012, hoping to clone the success of the ponzi scheme ZeekRewards (which supposedly is sharing profit from penny auction), promised all sorts of things to "founders", things such as "exotic car, yacht, RV, or home" if they can recruit investors handing over up to 25000 USD, all the while claiming money you invest are going feed poor children and stop them from becoming sex slaves. Jeffers was previously sued by state of Oklahoma for running a pyramid scheme called Renaissance USA in the 1990's. A permanent injunction was granted in year 2000.

According to the newspaper The Oregonian, Randall Jeffers, head of BidsThatGive and its successor, BTG180, is the most egregious tax scofflaw in the state, owing over $3.8 MILLION dollars in PERSONAL income tax.

Randall Jeffers has a long history in various failed ventures. According to MLMWatchdog, Jeffers ran "Destiny Telecom" which was "shutdown by Calfiornia AG", then his next venture "Wow Mobile" also folded after merely a year.

Apparently the guy who want you to "MLM" a charity didn't even bother to pay taxes.

↧

MLM Basics: Why a MLM Comp Plan is MORE important than the product, not less

March 19, 2016, 9:24 am

≫ Next: Scam Absurdities: Birds of a Feather Flock Together, or the Rodrigues and Filho financial links

≪ Previous: Charity MLM? What a joke, and here's proof

One of the biggest mistakes a MLM "noobs" makes is put all the emphasis on the product, without analyzing the business model itself, i.e. the compensation plan, or in jargon, "comp plan". (Or perhaps there's only a cursory glance). They are all enthusiastic about the product. OMG, it totally works. I (blah blah blah blah), product is (blah blah blah blah). You have to try it! It's totally legit! I didn't believe at first but now I do! (blah blah blah blah)

When critics / concerned friends/family told them the company is likely a pyramid because of X, Y, and Z, the first thing out of their mouth is "it can't possibly be a scam, the product works".

They are suffering from the "blind men and an elephant" problem... They cannot understand that what they experienced may be true for them, but is NOT the WHOLE truth.

Here's a very simple analogy... Take a look at this car:

Those of you who know cars should be able to tell, by the GT-R badge on the hood, that this is an older generation, Nissan Skyline R34 GT-R (or a reasonable facsimile thereof), which is a two-door coupe.

Except this is not a coupe. It's a station wagon. A five-door station wagon Nissan GT-R, and no, it's NOT photoshop(ed).

The point is if you ONLY look at the nose of the car, you'd have assumed it's a GT-R. But it's not. You have to see the entire body to realize this is NOT a coupe but a station wagon.

Similarly if you ONLY look at the products of a MLM, you could not have gotten "the whole picture", on whether the company may be a scam or not.

That's why the compensation plan, i.e. what you need to do to get paid by a MLM, is FAR MORE important than the product... It is the PRIMARY indicator on whether the company is a pyramid scheme... or a real MLM.

So how do you determine which is which?

Comp plan basically spells out what you need to do to get paid. How many sales are required to qualify, how are they counted, so on and so forth.

Why is this important? Because HOW (and WHY) you're getting paid determines whether the comp plan is legal (MLM) or illegal (pyramid scheme). For those of you who forgot or need a refresher, please refer to #MLMSkeptic's earlier explanation on what is the difference between a pyramid scheme vs. a MLM.

After all, a company can sell anything, as long as the comp plan is legal. There are MLM selling cleaning products (Amway), cosmetics (Avon), weight loss (way too many), energy drinks, legal rep plans (Prepaid Legal), medical plans, auto club, investment and more. The product is interchangeable. The comp plan, even with variations, are still MLM.

Thus, a comp plan is VASTLY more important than the product itself.

Yet when you listen to how most presentations run, a bare minimum amount of time was spent on the comp plan and how it makes it a true MLM, not a pyramid scheme. Instead most of the presentation was spent on how fancy the products are, how cool the company is, how great the reps are, how much money you can make (with a disclaimer), how much your life will be changed, and so on.

If they do cover the pyramid scheme angle, it'd be something like the Simpsons' lampoon way:

From the Simpsons: "First, let me assure you that this is not one
of those shady pyramid schemes you've been hearing about."

Basically, they are avoiding the issue. Yet by reading the comp plan, and their marketing literature, you can easily tell what is their emphasis... are you encouraged to sell stuff, the way MLM should be, or are you encouraged instead to BUY stuff (reality inversion)... or are you encouraged to RECRUIT downlines (growing the pyramid)?

Here's an example (with company name redacted)

While there is no product purchase required to be an Associate, your business will probably grow and duplicate more quickly if you’re a satisfied product user and have product on hand to share with others...

We recommend that you choose (REDACTED) Product Introduction Paks that best suit the goals and needs for your business...

Paid-As Consultants with an active Autoship and above can earn on GV generated by Associates in your Sales Teams that are in regions outside of your own.

In other words, while they don't require you to buy and use the stuff yourself, you are "recommended" (i.e. heavily encouraged, everybody else does it) to do so, and if unless you sign up for products shipped automatically to you every month (autoship), they will reduce your commission that your sales team earned for you.

Nice company to work for, eh? Yet it's been around 10+ years.

What does YOUR MLM's comp plan say about your company, that you failed to notice? Or failed to understand?

↧

Scam Absurdities: Birds of a Feather Flock Together, or the Rodrigues and Filho financial links

March 23, 2016, 1:57 am

≫ Next: Is it just series of bad judgment, or "once a thief, always a thief"?

≪ Previous: MLM Basics: Why a MLM Comp Plan is MORE important than the product, not less

There was an old saying: Birds of a Feather, Flock Together

Basically means: like attracts like.

So how does this apply to Ponzi schemes? One needs to look no further than Sanderlay Rodrigues De Vasconcelos aka "Sann Rodrigues", and his ties to Daniel Rojo Filho.

For those of you who don't know "Sann" Rodrigues... he used to go by the title "First Millionaire TelexFree US". That's right... he's a "net winner" in the TelexFree scam in both Brazil and the US. Previously he operated a Ponzi scheme called FoneClub that was shut down by the SEC around 2006. Oh, gee, now here he is again, a top leader in ANOTHER Ponzi scheme, TelexFree, shut down by the the SEC! But it gets better. At the time Sann was in Brazil, and he simply came up with a new scheme... called iFreeX. And within a few months Massachussetts called it suspect Ponzi, which apparently prompted Brazilian authorities to raid his recruiting seminar and invited him downtown for a long chat. He was released but apparently under travel restrictions, roughly March 2015 or so.

MLMSkeptic was immediately reminded of the circumstances how half of the TelexFree US, Carlos Wanzeler, escaped the country... by driving into Canada ahead of the authorities with his daughter, leaving his wife behind, and from there they flew to Brazil, where they cannot be extradited against their will (as per Brazilian constitution. Wanzeler still holds Brazilian citizenship). When his wife Katia Wanzeler tried to join them she was arrested at the airport by Federal agents, minutes before she got on the plane. She had previous told Federal agents serving a search warrant on the Wanzeler house that Carlos is staying at a hotel when it was later discovered that when she told the Federal agents Carlos and daughter was in fact heading toward the Canadian border in a car registered to her company.

But we're here to talk about Sann Rodrigues... Any way... Apparently Sann Rodrigues managed to get himself out of Brazil despite Brazilians told him to not go anywhere. So when he disappeared, Brazilian authorities put out a Interpol Red WANTED notice:

Interpol Wanted Notice for Sann Rodrigues

So when he showed up in Newark, New Jersey (yes, in the US) getting back into the US... He was promptly arrested for VISA fraud. He had apparently neglected to mention that he was arrested for Ponzi scheme back in 2008 or so... among other problems. He posted bail, had his passport (and those of his family) confiscated, only to be arrested AGAIN for the Interpol warrant. He spent another weekend in jail until Brazilians eventually responded "you can keep him for now".

Okay, so what does this have to do with Daniel Rojo Filho? And who is Daniel Rojo Filho? Pretty complex guy... and "ambassador of the Sinaloa Drug Cartel", according to a Mexican article.

Ah, but you see, Daniel Rojo Filho is, in many ways, what Sann Rodrigues aspire to be... Filho was named by a Mexican magazine as "ambassador" of the Sinaloa (drug) Cartel since 2010. Before then, he was suspected of operating a cartel front company called DWB Holdings alongside partner Pedro Benavides. When DEA and IRS raided the place Benavides got most of the blame and jailtime. Filho just lost a bunch of money, but by then he's used to the lifestyle of the rich and famous, and purported owns many exotic cars including a gold laminated Lambo, among many other exotic cars. Filho went on to create a Ponzi scheme called DFRF Enterprises, with outlandish claims of owning mines all over the world, partnerships with Swiss bank and other special investment avenues, and so on and so forth. Turns out it was all a lie, as Filho was arrested in Florida in July 2015.

This is when it got interesting, as it appears that Filho and Rodrigues may have known each other... As several DFRF victims testified that Sann Rodrigues promoted DFRF to them.

Back in April 2014, TelexFree went kaput, and all the leaders including Rodrigues got their assets frozen.

Rodrigues, desperate for some cash, had a firesale of his "Five Star Investment and Properties" to none other than Daniel Filho, in exchange for 300K USD. At the time, Rodrigues claimed to be not aware of the freeze, and Filho apparently didn't ask questions.

Filho then transferred the Five Star and its assets to a guy named Joel Nunez to settle some previous dealings, in exchange for Nunez paying another guy. Luiz Trinidade, also involved with Five Star. As far as Trinidade knows, the Five Star properties are vacant.

Imagine Joel Nunez's surprise when he went to inspect properties he thought was his... and find Rodrigues and family living on two of those properties. And now Rodrigues is upset because he claimed that he had given the properties to Filho as INVESTMENT, and was not supposed to be transferred or sold.

Filho ended up paying 200K to Nunez, basically buying the two houses Rodrigues and family lived in and gave it back to Rodrigues, which is probably well below market price.

All that was documented here. And now the money gets thoroughly muddled, as the properties are now involved in no less than TWO ponzi schemes... TelexFree, and DFRF.

But wait, there's ANOTHER link between the two alleged Ponzi schemers...

SEC is seeking contempt charges against Rodrigues, because he apparently transferred two of his exotic cars (a Lambo and a Fisker, together should be worth 200K) to his attorney... AFTER his assets were ordered frozen. Both Rodrigues and attorney claimed this was done to settle retainer fees. SEC, however, see it as attempt to hide assets, as the attorney put down the value of the Lambo at 30K when it's valued at well over 120K, for registering the title. The other car was written down as value for 20K when it's believed to be worth 80K.

And the Lambo was previously owned by none other than Daniel Rojo Filho. However, it is not known how did the Lambo ended up in Rodrigues' possession after Filho owned it.

While there's no DIRECT documented connections between Rodrigues and Filho other than documented above, it seems rather obvious that there is probably more than meets the eye.

And for the sake of the victims in both TelexFree and DFRF, let's hope the authorities get to the bottom of this ASAP.

↧

Is it just series of bad judgment, or "once a thief, always a thief"?

April 17, 2016, 9:34 pm

≫ Next: Scam Tactics: Indignantly imply everybody else is wrong i.e. Nerium Proponent's Comment Dissected

≪ Previous: Scam Absurdities: Birds of a Feather Flock Together, or the Rodrigues and Filho financial links

Given that how many of the Ponzi pimps have been around for years, it's quite surprising that people aren't using Google enough and pick up their history.

One of the most vocal supporters of OneCoin was Thomas E. McMurrain. This is him pitching his "Welcome to OneCoin AlphaTeam"

Thomas E. McMurrain, pitching his OneCoin Alpha Team

The guy really needs better green-screening. The sun is clearly coming from the RIGHT in the photo background, but his face is lighted from the LEFT. But who said that these folks are exactly detail oriented?

But if you bothered searching his name for a bit (never mind his self-PR like "7th Disruption", a book he "wrote" to promote OneCoin) you'll find some rather... disturbing details, like how he kept picking losers... Such as... Solavei

Tom McMurrain touring country w/ Solavei in 2012
Solavei went belly up in 2015

For those who didn't keep up, Solavei closed its doors in late 2015. Which is apparently when Tommy here picked up the OneCoin banner. He apparently posted on Facebook when Vemma was closed by FTC "come join us in OneCoin", much like ambulance chasers.

So what was Tommy doing before 2015? Well, we need to count, but there's FlexKom... a scheme that went nowhere except Turkey and pushed by Ponzi-pimp Ian Driscoll, formerly of BannerBroker.

Just a few months later, it apparently did not pay Tanju Colak a Turkish ex-footballer and local celebrity, whom joined FlexKom a while back. Mr. Colak sued and FlexKom lost. A possible class action lawsuit was still undetermined as of 2014, and I can't search in Turkish to find an update, but it is said to possibly involve 40000 FlexKom members in Turkey. The business also seem to have gone quiet at the end of 2014. Definitely NOT another winner, something that sells itself, as Mr. McMurrain claimed, if it can't even sell itself on their home continent.

So what else did Mr. McMurrain involve himself in? No less than one of the widest spread Ponzi schemes in US history: ZeekRewards.

Tommy here registered a "join Zeek and make me $$$" domain in March 2012. For the record, Zeek Rewards was shut down in August 2012 by Secret Service, SEC, and other Federal agencies. Again, Tommy can't seem to pick a winner.

So what was Tommy doing even before this? TVI Express... an international pyramid scheme.

Here's proof that Tom McMurrain was a participant in TVI Express pyramid scheme:

Tom McMurrain was indeed a member of TVI Express, a international pyramid scheme

Tommy here even wrote spam-articles to promote TVI Express.

Spam article ending, confirms article was indeed by our Tommy boy here
where he touted his status as a reformed ex-con, but is he really reformed?

TVI Express disintegrated in 2012-2012 when Indian policed put out a wanted notice for its head Tarun Trikha, for defrauding thousands in India. Tarun Trikha was finally arrested in 2013 when he tried to transit through New Delhi. At least report, more than a dozen countries on all continents except Antarctica have issued warnings or made arrests regarding the global pyramid scheme TVI Express.

But wait, now you ask, Tommy here touted that he was an ex-con... What was he ex-con of?

Now here's the shocker... He operated a ponzi scheme from 1997 to 2000.

The TL;DR version: he opened a quick loan place in 1997 where he charges 22-25% monthly interest on people who can't get money otherwise... by signing over their car as collateral. You'd think that's a sure win business, but no, he still manage to lose money at this... but with the claim of high earnings and a boiler room company setup solely for soliciting investors, he managed gather up about 9 MILLION dollars from 80 investors over 3 years. Instead of using the money only for the loan place, he spent the money on his other companies, as well as made loans WITHOUT collateral to friends, AND spent about 700K on himself, and lost another 600K in day trading. The indictment stated that McMurrain even claimed to have cancer and somehow beat it. When he was discovered (when the scam can no longer to hidden), he fled to Panama and hid there for years and had to be arrested and extradited back to the US. He plead guilty to mail fraud and wire fraud in 2005,

But his time in Panama (2000-2004) was apparently adventurous as well. Tom McMurrain, according to Panamanian press, managed to run ANOTHER scam down there, through a company called "San Cristobal Land Development", where they promised investors the money is going toward teak (wood) and noni (fruit) plantations and yield tremendous returns, but the returns never came. When local media reported their investigation, these "fine folks" sued the paper, and got their lawsuit thrown out. Soon after that McMurrain was arrested and taken back to the States in handcuffs.

You know the rest.

To summarize Tom McMurrain's... achievements

1997-2000 Emergency One Loan, collateral high interest loan to desperate people that's really a $9 million dollar ponzi scheme, escaped to Panama when the scheme collapsed

2000-2004 San Cristobal Land Development in Panama, a suppsed teak and noni plantation investment opportunity, tried to silence local media reporting about it with criminal libel suits, arrested and extradited to the US at FBI orders to face charges for his Emergency One ponzi scheme

2005-2010? Spent time in jail

2010-2012? "Gold member" in TVI Express pyramid scheme, actively recruited until it went bust

2012-2012 Participated in ZeekRewards ponzi scheme, registered domain name and website for it

2012-2015 Solavei rep, toured country in promotion until Solavei went kaput in 2015.

2014-???? Promoter of FlexKom, a suspect scheme (Report from UK, Report from Turkey)

2015-???? Promoter of Onecoin, suspected Ponzi scheme out of Bulgaria

So, either Tom McMurrain is the most inept and unlucky business person in existence... being participants or instigators of at least SEVEN scams or failed ventures since 1997...

Is it a coincidence that his book is called "The 7th Disruption"?

Or did he chose these "opportunities" intentionally?

Now he plies his trade in some sort of Forex Trading... and OneCoin, which was already called a scam by multiple cybercurrency experts.

Can you trust Tommy's judgement... or intentions?

Tread carefully.

↧

Scam Tactics: Indignantly imply everybody else is wrong i.e. Nerium Proponent's Comment Dissected

April 21, 2016, 3:29 am

≫ Next: How to be an online marketing idiot: arbitrary DMCA takedown notices and SLAPP

≪ Previous: Is it just series of bad judgment, or "once a thief, always a thief"?

English: There are no symbols that represent s...

skepticism, skeptical inquiry, critical thinking,
critical inquiry, and truth-seeking. (Photo credit: Wikipedia)

When you see a random claim, do you simply accept it as is, or do you adopt the Reagan doctrine: "Trust, but verify"? A skeptic uses the latter.

Indeed, scam tactics often simply deny everything, randomly make some claims, and claimed to be outraged at the lack of facts presented.

Recently I came across this comment by a Nerium proponent. I am going to number the claims (i.e. sentences that appear to be factual, not merely an opinion), and let's verify each one.

Get your facts correct please. Nerium sold at Sears was counterfeit. (1) You will no longer find it there. (2)
The extract itself, NAE-8 is patented. (3) Look it up. Do a tiny bit of research on Jeff Olson (4) (you’ll kick yourself for your ignorance).
The before & afters are from its distributors. (5) One bad apple doesn’t spoil the bunch & that apple was taken care of (6) – & others warned.
Most importantly, results from the night treatment are published in the peer-reviewed literature. (7) Try looking up the Journal of Aging, Science, Jr of Clinical & Investigative Dermatology, etc…… (8)
The patented extract is the first superantioxidant on the planet. Look it up. (9)
Please don’t confuse searching with research! Try it, you might just learn something new!

Claim 1: Was Nerium sold at Sears counterfeit?

As we have not seen this listed ANYWHERE (search for Nerium + Sears just brings up similar night creams) we'll have to say "unverifiable", as we have nothing to show either true, or false.

UNSUPPORTED CLAIM, BUSTED

Claim 2: Is Nerium sold at Sears?

Nope, nothing there.

TRUE (but inconsequential, how often have you seen MLM products in retail? Never!)

Claim 3: Is NAE-8 patented?

Nope, NAE-8 is a registered trademark, not a patent. Nerium appears to hold at least two patents on how to extract oleander and aloe, but NAE-8 is not "patented", just trademarked as "non-medicated skin care preparation ingredient" under cosmetics.

BUSTED!

Claim 4: Is there anything surprising on Jeff Olson?

Searching for Jeff Olson shows that he used to ran People's Network, a Self-Improvement TV Channel, that got bought by Prepaid Legal in 1997ish, and he became Prepaid Legal's CEO in 1999. In 2001 PL was hit by Wyoming Attorney General with charges of illegal income claims, then SEC also hit Prepaid Legal for misclaiming expenses as assets (i.e. inflating its financial situation). PL was sued hundreds of times in Missouri, won a few, lost more, decided to settle the remaining 400+ cases. Then things were quite until 2009, when both FTC and SEC subpoenaed some documents for fact-finding missions. In 2011 PL was bought out and reorganized, and Olson left (or was forced out) and started Nerium.

Nothing too surprising, or worthy of emulation, IMHO. Got lucky and got acquired, had to wield whip on sales force to keep them in line, and got forced out during corporate shuffle.

HALF-TRUE

Claim 5: Are the before and after photos from distributors?

Some were, but many were on OFFICIAL Nerium videos and flyers. This may be referring to Ray Liotta's lawsuit against Nerium, where some Nerium promoters claimed Ray Liotta used Nerium (he didn't) and showed before and after photos with massive improvement in skin.

HALF-TRUE

Claim 6: Are the "bad apples" (rogue promoters) "taken care of"?

No proof that they were. Unsupported claim.

UNSUPPORTED CLAIM, BUSTED!

Claim 7: Were results of Nerium night treatment published in peer-reviewed literature?

Searching for "Nerium" in PUBMED shows one result, which is a cell level test of the main ingredient in Nerium cream, NAE-8.

Searching the Nerium website, under "Clinical Trials", shows NO list of clinical trials, only vague mentions of "studies spanning a five-year period". As Nerium was founded in 2011 (and it's not even their 5 year anniversary yet!) this statement seem to be... so vague that it's worthless.

Searching through MULTIPLE Nerium documents did not clarify the situation. Under "safety research" PDF, again, only vague mentions of "more than 10 years of scientific research and clinical testing by scientists and medical professionals for Nerium SkinCare, Inc" and "when tested in multiple studies over a 3-year period as a topical product". No actual study results were available.

It wasn't until you get the profile on Bloomberg and the article on DSN that the real story came to light... Nerium Biotech was established back in 2006, to make cancer drug and HIV-drug. The cancer drug, Anvirzel, was not effective and FDA had to warn the company (before it became Nerium Biotech) to stop making bogus claims. Memorial Sloan Kettering Cancer Center's entry on Oleandrin (generic name for Anvirzel) is "no proven effect in human body". DSN then claimed that the scientists then 'stumbled upon the remarkable anti-aging properties", which lead to them contacting Jeff Olson and partnering for a new company... Nerium Skincare for the cosmetic side (as opposed to the Biotech/Pharmaceutical side), and Nerium International, which is the MLM marketing arm.

It is interesting though, that DSN article claimed that:

White flower of an oleander (Nerium oleander)

it's poisonous

(Photo credit: Wikipedia)
The Nerium Biotech team presented Olson with a stack of peer-reviewed studies on the extract’s effects on the skin. Impressed but also aware of how critical it is for direct selling companies to defend their claims about their products’ performance, he demanded that they verify the findings with third-party clinical trials: “I knew that we needed to prove that this company was the real deal. One of the mantras that I’ve adopted is to ‘Go Slow to Go Fast.’ I wanted to ensure that we built a company that was worthy of this product." Once the results came in, Olson was convinced.

So basically Jeff Olson claimed that not only he saw peer-reviewed studies done by Nerium Biotech, the studies were then repeated by "third-party clinical trials" at his order, and he was convinced.

Yet no such trials were listed or available for review on Nerium's website, or listed in PUBMED.

What's even MORE interesting is, in a 2014 CBS/KPIX investigation report, Olson could only produce a SINGLE study by a San Francisco plastic surgeon, who only tested the product on 34 healthy patients. The plastic surgeon admitted that 34 people study is not enough to prove safety in the general population. Olson promised to produce a scientist, then cancelled. Olson then promised to provide more proof, then Nerium lawyers stepped in and claimed that any proof can only be disclosed after signing a NDA, which means it CANNOT be disclosed by the TV station.

So were Nerium's night treatment clinical trial results published in peer-reviewed literature? No evidence that it were. If it were published, it's so secret it may as well not exist.

BUSTED!

Claim 8: Were studies about nerium published in "(sic) Journal of Aging, Science, Jr of Clinical & Investigative Dermatology?

Searching for "Journal of Aging Science" yielded only a facebook page, which lead to "Omiconline.org". Search there shows NO article under keyword "nerium".

Searching for "Journal of clinical and investigative dermatology" lead to "avensonline.org". Search there shows NO article under keyword "nerium".

BUSTED!

Claim 9: Was patented extract (NAE-8) the first superantioxidant on the planet?

NAE-8 was registered as a trademark in 2011. Search of the term "superantioxidant" shows that it was used in New York Times back in 2007 to describe mangosteen, acai, and such "superfruits". Thus, NAE-8 cannot be the "first superantioxidant".

BUSTED!

So out of NINE claims... Four were outright false, 2 were unsupported claim (unverifiable), 2 were half-true, and only 1 was completely true, and it had nothing to do with Nerium's reputation.

Not a good record there, Nerium proponent.

As a parting gift... MD Anderson Cancer Center in Texas had to put up a webpage, setting the record clear, that they had NOTHING to do with Nerium, it wasn't developed there, they know nothing about it, and wants NOTHING to do with it.

Imagine what kind of debunking it had to do before they put up a page like this...

↧

How to be an online marketing idiot: arbitrary DMCA takedown notices and SLAPP

May 5, 2016, 2:10 pm

≫ Next: Scam Tactics: False citing of legislation or certification authority

≪ Previous: Scam Tactics: Indignantly imply everybody else is wrong i.e. Nerium Proponent's Comment Dissected

English: Very poor sketch of a desired icon for DMCA takedown notices on articles, emphasizing Wikimedia's submission... created for conversation at Commons:Village pump#DMCA takedown templates and material. (Photo credit: Wikipedia)

It seems some people have NO concept of copyright, and think that issue random threats to sue is somehow a valid tactic in "reputation management". Such idiots should never be allowed to do marketing online, but this is a democracy, with freedom to do all sorts of things, including making a total fool of oneself.

Recently, Techdirt, a tech news website, highlighted a particular idiotic DMCA takedown notice. The story basically goes like this. in 2015, Techdirt writer Tim Cushing put together a list of "stupid DMCA takedown requests" because, well, they are stupid, like DMCA takedown notice to Google... about images cached on Bing (which belongs to Microsoft, not Google), or DMCA takedown on news coverage about one's crimes by self-publishing a book about it, and so on and so forth.

One of these... online marketing idiots, instead of acknowledging mea culpa, doubled down and issued a DMCA request to Techdirt claiming their copyright were violated because Techdirt used a couple of the images offered by the company, called Andromedical, as example, complete with Andromedical's prominent watermark. Oh, and the same copy apparently posted random comments online claiming Techdirt is owned by some company nobody ever heard of, is a patent troll, claiming various bogus misdeeds by the writer, and more. It's a basic slander campaign... all because they can't admit they were idiots.

The idea that TechDirt, a news website, can be liable for copyright violation for "covering" Andromedical (whose product is a penis pump, named... AndroPenis (tm), really imaginative, guy) as a news item is simply hilarious. It's even MORE hilarious that Andromedical's complaint also claimed that Techdirt is a "counterfeiting operation" and the violation is being reported "to INTERPOL".

The bottom line is actually quite clear: "we don't like what you say about us, STFU!"

But the world doesn't work like that. There are exceptions to copyright called "fair use", and using the company logo and publicly available photos provided as promotional material by the company to illustrate the company, and in no way asserts being the company, is obviously fair use. If you put info out in the public, you can't control what people do with it, be it positive or negative.

Yet some scams and suspect schemes are quite fond of using these bogus copyright and/or trademark claims as well as threat to sue or outright lawsuits in hopes of silencing critics as a part of their "reputation management" strategy.

MLMSkeptic has personal experience with such a bogus copyright claim during the coverage of ZeekRewards ponzi scheme. In July 2012, only months before SEC and Secret Service moved in, MLMSkeptic had a long list of inconsistencies, questions, and bogus information and suspicious behavior by ZeekRewards that indicated it was a ponzi scheme. The evidence is so long, it can no longer be ignored. Instead of dealing with their corrupt scheme, they instead attempted to silence yours truly by filing a DMCA takedown notice to the article host: Hubpages.

"We are writing you today and requesting your assistance. It has come to our attention that your website Hubpages.com is broadcasting and delivering content that is both copyrighted and, [sic] Trademark Protected. In addition, the content constitutes a tortuous [sic] interference with us and our 1.2 million independent advertising reps around the world." -- introduction from the takedown letter

The hilarious part is Zeek Rewards Trademark is NOT owned by Rex Venture Group, owner of Zeek Rewards. And I've never claimed I am Zeek, or even related to Zeek in any way. I'm merely critiquing it, and there's ONE instance where their logo was used... a tiny one-inch logo shrunk down to show what I am talking about.

The takedown notice is an obvious attempt to silence criticism levelled against a suspect ponzi scheme and asking many inconvenient questions they don't want answered. In legal terms, this is known as SLAPP: strategic lawsuit against public participation. Even though they don't expect to win, merely by threatening to sue, they can often silence the critic, who don't have a warchest bankrolled by thousands, perhaps millions of victims.

This particular instance went badly for the scheme. My article went back online after only a week of outage, after I removed the logo (which I should not have to) and my host understood the situation and the other party (who never really provided his bonafides) did not respond. Two weeks after that, SEC and Secret Service stepped in and shut down Zeek, and the rest is history.

There are many instances of rather ridiculous threats of companies attempting to use DMCA or outright threats to sue in attempt to "manage" online reputations. WorldVentures attempted to manage a blogger's review and got a severe backlash. Tracy Coenen eventually prevailed against Medifast at the cost of 200K spent on lawsuits after several years. Leonard Caldwell sued Jason "Salty Droid" Jones many times.

On the other hand, such threats don't always go down so easily for the critics, as LazyManAndMoney was forced into a settlement with LifeVantage as LZAM doesn't have the kind of warchest as deep as a company with sales in the millions. Free speech is not free.

So what's the point of all this? Justice wins... most of the time. Nothing stops you from being an idiot online, pretending to wield a club, hoping to beat down criticism. But like Emperor's new clothes, the truth is out there for people to see.

And if your company is resorting to such tactics, it may be time to bail out, as you don't know what ELSE the company is really trying to hide. (See: Cockroach theory)

↧

Scam Tactics: False citing of legislation or certification authority

May 13, 2016, 8:45 am

≫ Next: Scam Spotting: too-good job offer, fake website, and Bitcoins

≪ Previous: How to be an online marketing idiot: arbitrary DMCA takedown notices and SLAPP

Scams, in order to claim false legitimacy, will cite laws, regulations, and licenses to sound official, when they are grossly exaggerating the truth, or are outright lying.

Below we will discuss four example of such outrageous fraudulent behavior, and how you can see through such deception with just Google and some sense of skepticism.

Gemcoin, USFIA, and AB129

USFIA was an alleged 32 million ponzi scheme shut down by SEC on September 29, 2015, having been previously chased out of China in 2014 by Chinese authorities. Two of the perps were arrested in Thailand in 2014 through China's Operation Foxhunt extradition program and extradited with other perps back to China, only to see the scheme restart in the US under the same US leader Steve Chen.

When it was running at full steam their marketing material claimed that Gemcoin, their supposed altcoin was the first cryptocurrency authorized by California bill AB129.

Gemcoin believers repeating claims that Gemcoin was first cryptocurrency authorized by
California bill AB129 (2014). It was complete bull****, of course. Every bit of Steve Chen's assets
had been counted and it came out to only 20 or so million. "50 billion"? Hilarious.

The problem is AB129 said no such thing. The full text of AB129 is easily Google-able.It is only a single sentence. It simply says that from here on California's restriction (that all transactions must be done with US dollars) is rescinded. Gemcoin was not mentioned or referenced.

Yet the Gemcoin believers did not question the claim. They simply accepted the extraordinary claim as true. And they put in money for something "backed by amber".

There was no amber or amber mine. And now their money is lost or tied up in an international ponzi scheme. At least report, the receiver that took over the company can only locate about 20 million of the 32+ million believed to be involved. A big amount was sent overseas to China and Singapore.

But at least USFIA scam referenced a real law. The next scammer simply made up an agency that doesn't exist.

OptionsRider claiming registration with "SEC NZ" where there is no such agency

OptionsRider is supposedly an investment company based in New Zealand, however, there are several company names mentioned, including BancDeOptions, Binary Options Concierge, and so on. However, on their website, they claimed to be authorized by New Zealand Security and Exchange Commission:

The Company is authorized and regulated by the New Zealand Securities and Exchange Commission to offer certain Investment and Ancillary Services and Activities under the Provision of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and Other Related Matters Law of 2007, Law 144(I)/2007, as subsequently amended or replaced from time to time (“the Law”), with FSP license number 207/13.

There is no such agency as "New Zealand Securities and Exchange Commission".

In New Zealand, securities are regulated by "Financial Markets Authority" or FMA.

No such law referenced exists in New Zealand either, and FSP license numbers are 7 digits long, no slashes.

Further research revealed that this verbiage was copied from Rodeler Investment of Cyprus, where they do have a Securities and Exchange Commission, and such a law in 2007, and the same FSP license number (with slash).

In other words, OptionsRider is not a legitimate investment company, is not regulated by New Zealand authorities, and does not even know which New Zealand regulator has oversight over them, but instead, just randomly copied some other company from another continent, changed some verbiage, didn't realize the verbiage referenced the wrong agency, and hope readers don't ask questions.

And if you don't ask questions how would you know where you money REALLY went?

OneCoin and "Electronic Commerce Act of Bulgaria"

OneCoin is a suspect Ponzi scheme and a reboot of a previously failed "BigCoin" scheme that claims to be a cryptocurrency. It claims that

Onecoin follows strictly the regulations of the Electronic Commerce Act of the state of Bulgaria.

But has anyone actually read the law? It's pretty dry reading, but it's about how a company is responsible for keeping the data safe, and not share it with people who's not supposed to have them, and that sort of minutiae. It says nothing about cryptocurrency, currency market, and that sort of things.

Basically you're looking at a repeat of the Gemcoin and AB129... Claiming that the law legitimizes the scheme when it does no such thing.

Conclusion

If a company cites a law or certification, do you ever bother to look it up? Or do you simply accept it as if it is fact?

If they are not telling you the whole truth on this one thing... what ELSE may they not be telling you?

Or is that merely negativity to be avoided?

It's your wallet and your money.

↧

Scam Spotting: too-good job offer, fake website, and Bitcoins

May 14, 2016, 12:14 am

≫ Next: BREAKING NEWS: WCM777 smashed AGAIN in China, is Phil Ming Xu in custody?

≪ Previous: Scam Tactics: False citing of legislation or certification authority

A redditor recently posted on /r/scams about a too-good-to-be-true job offer:

Hi all, I was hoping you could help me figure if this job offer is a scam. So I received an email saying that I had applied for customer service representative at another company, that was an agency they work with (note I did apply to this), and that they believe me to be better suited for a better job. The HR rep who contacted me said she's confident I stand a chance, and so she wants to forward my application to the hiring manager. The company is currently based on switzerland, and they are opening an office in my area (Toronto Canada) on May 30th. All she requested was that I fill out the employment application. There was nothing weird about the application, it asked for my usual contact info and two work references. No sin number or anything private, or that they couldn't get off my resume. The reason I'm weirded out is because the pay is substantial (for reference it's +20/hr and i'm still in school) and they mentioned the company works with bitcoin. The company name is Trimension Capital Holding. Does anybody have any experience that they'd be willing to share on if this is a scam or not?

This already has a couple red flags

Based in Switzerland, but opening an office in Toronto
Over $20 per hour for someone not yet out of school
Encouraged to apply even if not certain qualified (to do what, exactly?)
It involves "Bitcoins"

But let's track this down all the way. If you search for "Trimension Capital" on Google, you will get back a Trimension Capital GmbH at Baarerstrasse 135, 6301 Zug, Switzerland. So far, it matches.

My first link took me to moneyhouse.ch profile fo the company, and we larned that company was founded in 2012 as "Pinewood Capital GmbH", changed name to "Trimension Capital GmbH" in 2013, and changed to "Trimension Capital Holding GmbH" in 2014. It's headed by Thomas Bieri. Under "contact" it shows website as trimension-capital.com

MoneyHouse.ch says the website should be trimension-capital.com

Next couple links goes to trimensioncapital.com NO DASH!!!!!!!

Something is very fishy here. Let's check DNS at WHO.IS

The one with the dash says...

Domain Name: TRIMENSION-CAPITAL.COM
Registry Domain ID: 1784370897_DOMAIN_COM-VRSN
Registrar WHOIS Server: whois.1api.net
Registrar URL: http://www.1api.net
Updated Date: 2013-10-16T09:54:53Z
Creation Date: 2013-03-05T13:17:31Z
Registrar Registration Expiration Date: 2017-03-05T13:17:31Z
Registrar: 1API GmbH
Registrar IANA ID: 1387
Registrar Abuse Contact Email: @1api.net
Registrar Abuse Contact Phone: +49.68416984x200
Reseller: Timewarp IT Consulting GmbH http://netmonic.com
Domain Status: ok - http://www.icann.org/epp#OK
Registry Registrant ID:
Registrant Name: Thomas Bieri
Registrant Organization: Trimension Capital GmbH
Registrant Street: Baarerstrasse 135
Registrant City: Zug
Registrant State/Province: Switzerland
Registrant Postal Code: 6301
Registrant Country: CH
Registrant Phone: +41.417660800
Registrant Phone Ext:
Registrant Fax:
Registrant Fax Ext:
Registrant Email: @trimension-capital.com

Everything matches, headed by Thomas Bieri, right address, right country.

Okay, how about the one without the dash?

Domain Name: TRIMENSIONCAPITAL.COM
Registry Domain ID: 2022941624_DOMAIN_COM-VRSN
Registrar WHOIS Server: whois.publicdomainregistry.com
Registrar URL: www.publicdomainregistry.com
Updated Date: 2016-04-20T15:33:24Z
Creation Date: 2016-04-20T15:33:22Z
Registrar Registration Expiration Date: 2017-04-20T15:33:22Z
Registrar: PDR Ltd. d/b/a PublicDomainRegistry.com
Registrar IANA ID: 303
Domain Status: clientTransferProhibited https://icann.org/epp#clientTransferProhibited
Registry Registrant ID:
Registrant Name: Domain Admin
Registrant Organization: Privacy Protection Service INC d/b/a PrivacyProtect.org
Registrant Street: C/O ID#10760, PO Box 16 Note - Visit PrivacyProtect.org to contact the domain owner/operator Note - Visit PrivacyProtect.org to contact the domain owner/operator

WTF?! This domain was registered LESS THAN A MONTH AGO! (APR-20-2016) and it's got hidden registration. Why?

Let's check the websites.

http://trimension-capital.com/ got me a DNS not resolved.

http://www.trimension-capital.com/ got me a "default webpage", no content setup yet.

http://trimensioncapital.com did get me a webpage... a pretty slick one, in fact. But why would a company based in Switzerland use NEW YORK skyline as a backdrop? The MetLife and Empire State Buildings, plus other New York landmarks are easily recognizable.

A company based in Switzerland, using NEW YORK skyline as backdrop?

Quick googling of the initial verbiage shows that it was cribbed from a different financial service website.

This is the clone... Note the ungrammatical Holding' (no S)

This is the original, which has no errors. The one with the error is obviously the copy

Ah, but you say, why can't the Trimension be the original? Because Trimension made a mistake when doing that "signature" verbiage. It's nonsensical.

Furthermore, Trimension went on to clone someone else's website for a different section, and that left us with a non-sensical sentence. They are proud of keeping a client for only three years?

Proud of keeping a client for merely 3 years?

Yet the non-sensical sentence makes a lot more sense, when you realized it was copied from yet ANOTHER website... and the original sentence said 20 years.

Now 20 years makes much more sense.

But the real smoking gun is when they got too clever... This was supposed to be Trimension's top echelon...

Trimension's supposed top echelon

So why is the first photo a mirror flipped version of William E. Ford?

Wikipedia on William E. Ford

In fact, the entire "staff" here seem to be cloned from General Atlantic, and flipped.

"Dirk Kaufer" is actually Thomas Murphy

"Ralph Adenauer" is actually Martin Escobari

"Curt Arnold" is actually Joern Nikolay

And so on and so forth. Everybody at General Atlantic got cloned, image flipped, and renamed with new positions. Why image flip? Google Image search doesn't work on mirrored images. It will report the two pictures do not match if one is mirror of the other. I've seen this tactic before.

So the job offer cannot be real, as the company may be real, but the offer is obviously fake, issued by the clone.

↧

BREAKING NEWS: WCM777 smashed AGAIN in China, is Phil Ming Xu in custody?

May 17, 2016, 11:26 am

≫ Next: Another article of how WCM got smashed in China (AGAIN), translated

≪ Previous: Scam Spotting: too-good job offer, fake website, and Bitcoins

PatrickPretty.com spotted a news in ShanghaiDaily that a Mr. Xu of "World Capital Market" was arrested by Chinese police for pyramid scheme in China. It appears that Phil Ming Xu of WCM777 has moved back to China and restarted his scam which collapsed in 2014 in the US. Below is a bilingual version of the news, with English version provided by me.

http://www.legaldaily.com.cn/index/content/2016-05/15/content_6626584.htm?node=20908

会员遍布28省涉案金额数亿

Members spread across 28 provinces, amount into hundreds of millions

“万通奇迹”涉嫌非法吸存被查

Wantong Miracle suspected of illegal securities, being investigated

发布时间：2016-05-15 20:42 星期日来源：法制日报——法制网

Posted: May 15 2016 Sunday 20:42 Source: LegalDaily.com,cn

法制网记者李想 Reporting for LegalDaily Xiang Li

2015年5月27日，广东省肇庆市鼎湖区居民周华（化名）走进当地经侦大队报案。情绪激动的周华告诉警方，自己听信他人投资了万通奇迹社交资本云计算平台。孰料，不仅没有收到一分钱分红，连2.6万元本金也“打了水漂”。

On May 27, 2015, Ms. Zhou Hua (pseudonym) who resided in Guandong, reported to the local Police Economic Crime Detachment to report that she had been defrauded. The frustrated Ms. Zhou told police that she trusted others and invested in "Wantong Miracle Social Capital Cloud Computing Platform", and not only did not get any promised profit, the 26000 investment is "gone with the wind".

警方顺藤摸瓜，一个披着投资原始股权理财、电子商务等新概念外衣的特大非法吸收公众存款犯罪团伙浮出水面。据调查，此案涉及万通卡会员5800余人，分布于全国28省，涉案金额达数亿元人民币。

Police followed the leads, and revealed this humongous illegal securities crime syndicate that used various new concepts such as "protoshare money management", "e-commerce" to disguise itself. Based on investigation, this crime involved over 5800 Wantong Card members, spread across 28 different provinces (in China), involving hundreds of millions in RMB.

精心包装欺骗群众

A exquisite facade to deceive the masses

据警方介绍，2014年1月，周华听信犯罪嫌疑人梁某、陈某的话，投资购买两份“万通奇迹”WCM705套装，价值1999美元，按照“万通奇迹”公布的人民币和美元6.5:1的汇率，折合人民币13000元，对应1999个电子积分。对方向周华承诺，她可以获取每天16美元的分红，可累计100次分红。

According to police, in January 2014, Ms. Zhou believed suspects Mr. Liang and Mr. Chen, and purchased two of the Wantong Miracle "WCM705" suite at cost of $1999 each. Based on the then published rate of 6.5 RMB to 1 dollar that's about 13000 RMB. This would give the investor 1999 "points". According to the then promises, she can get 16 USD every day as profit share, and can do it 100 times.

《法制日报》记者登录网页搜索“万通奇迹”，发现有不少人在网上询问投资“万通奇迹”是否靠谱。那么，“万通奇迹”到底是怎样的一家公司呢？

Legal Daily reporter searched the Internet about "Wantong Miracle", and found there were many people asking online is Wantong Miracle" legal. So what sort of company is Wantong Miracle?

5月6日，在深圳市第二看守所，记者见到了在押犯罪嫌疑人徐某。据徐某称，大学毕业后他曾在媒体做过编辑，后来转行到金融领域工作。

May 6th (2016), in Shenzhen 2nd detention center, reporter met the suspect Mr. Xu, who had been arrested. Mr. Xu claimed, after graduating from university he worked as producer in media, then transferred to finance.

据肇庆市公安局经侦支队副大队长张朝晖介绍，2013年5月，“万通奇迹”系列融资产品由某投资银行控股集团董事长徐某等人策划成立。徐某等人宣称，“万通奇迹”进行的是社交资本革命，利用互联网云服务、云计算和全球零售折扣系统，为全球客户提供资本放大。

According to Zhang Zhaohui, deputy chief, economic investigation detachment, Zhaoqing Public Security, Wantong Miracle's various products was introduced to China in May 2013, by a Mr. Xu (supposedly some "investment bank holding group CEO") and others. Xu, et al, claimed that "Wantong Miracle" is a social capital revolution, using Internet, cloud computing, and world retail discount system, to provide "capital magnification" to global customers.

巧立名目变本加厉

Fancy names, upgraded crimes

2013年年底，因“万通奇迹”系列套装承诺的分红电子积分数额急速增加，会员申请提现增速快，徐某等人为防止资金倒流，先后限制提现金额、拖延提现期限、推出“重购许可证”等方式，限制、拖延会员提现。

By the end of 2013, Wantong miracle, due to sales of all these suites previously, is bleeding cash profusely. Xu, in attempting to prevent the money from leaving the system, added various restrictions such as limiting withdrawal amounts, delayed cashout terms, introduced "repurchase permits" and other methods to limit and delay members from cashing out.

2014年3月，徐某等人以“万通奇迹”系列套装已由Global Unity财团接手，现有“万通奇迹”系列套装项目进行修改为借口，推出百人网股权置换（即电子积分兑换百人网原始股权）、国度交易所（会员之间相互买卖电子积分，即老会员可以将电子积分通过交易所平台出售给新会员后，由新会员直接汇款给老会员，变相达到提现的目的），用以消耗会员的电子积分，达到拖延会员提现时间和赚取电子积分交易手续费的目的。2014年7月，徐某等人再以引进新财团香港爱城集团有限公司，需新旧服务器转接、数据整合为借口，暂停会员提现。

In March 2014, Xu, et al, claimed that "Wantong Miracle" suites had been taken over by "Global Unity" group, and all the Wantong Suites E-Points are to be converted to "HundredNet protoshares". A trading platform is also introduced (so older members can "sell off" their points to new members, thus allowing them to cash out) in order to use up the accumulated E-Points, both to delay the members from cashing and to charge "trading fees". In July 2014, Xu, et al, again used the excuse of adding an investor group from Hong Kong AiChen ("Love City"), and need to switch servers, to suspend payouts.

2015年1月，徐某等人纠集其父徐某某、表兄汤某等人在深圳成立万怡通公司，以所谓国度金融控股集团有限公司接受原万通卡会员为名，要求原万通会员按照原账户电子积分数额X20%X6.3元，汇款至万怡通公司账户内进行爱币激活，用于将原电子积分转换为爱币，激活后相关激活款项按照原会员账户电子积分数额X20%X6元标准退还会员（每电子积分赚取0.3元激活费用），将原万通会员转换为国度会员。

In January 2015, Xu, at al, recruited Xu's father (Mr. Xu Sr.) and a cousin (Mr. Tong) to open WangYiTong in Shenzhen, China. They claimed that a "Kingdom Financial Holding Group" is willing to accept the old Wantong Point, and solicited Wantong members for additional funds "activation fee" to the rate of E-Points * 0.20 * 6.3, and the Wantong members can join the Kingdom system and get the new LoveCoins, and Kingdom will refund E-Points * 0.20 * 6. Basically the company earned 0.3 RMB per E-point to "convert" Wantong members over to Kingdom members and switch from Wantong E-Points to LoveCoins.

2015年7月至今，徐某等人合谋先后成立国度金控投资（深圳）有限公司、百人网络科技（深圳）有限公司、爱加倍化传播（深圳）有限公司等十多家无实际经营公司，通过互联网网站、微博、微信、QT语音房间、音频讲课、召开新闻发布会等多种方式宣称，国度金控集团将推出“IPL板”业务（即自行发行公司股份、认购、挂牌交易），推动该14家子公司将于3个月至24个月内挂牌上市，变本加厉、继续欺骗社会公众购买上述公司原始股权，以达到非法吸收公众存款的目的。

From July 2015 until now, Xu, et. al, established Kingdom Financial Holding, HundredNet Technology, Love Multiplies Broadcast, and a dozen other shell companies with no actual operations. They then used websites, Weibo (Chinese Twitter), SMS/WeChat, QT voice chat room, Podcasts, Press Releases, and other methods to advertise that Kingdom Financial Holding will soon go IPO, and claimed all 14 companies will IPO in the next 3 to 24 months, to deceive the public into purchasing "protoshare" securities of these shell companies.

非法吸存难逃法网

Illegal Securities Cannot Escape Justice

记者从深圳市公安局了解到，“万通奇迹”及其涉案公司不属于银行业金融机构，不具备吸收公众存款业务资质，不具备发行股票、债券业务资质，不具备开展支付结算业务资质，其推出的所谓“爱币”不属于真正意义上的货币。

The reporter at Shenzhen Public Security was able to learn that Wantong Miracle and other companies is not a financial firm or a bank, and has no license to sell securities and take in investments, not shares, not bonds, and even their "AiBi (LoveCoin)" is not a true currency.

经查， 2015年5月至9月，万怡通公司账户汇款备注为“激活金币” “激活万通卡” “购买爱币“的汇款金额1.2亿余元，赚取激活费用900余万元，按照20%激活款估算，涉案金额达数亿元人民币。

Based on investigations, from May to September 2015, Wanyitong companies received hundreds of millions of RMB to "convert" Wantong E-Points into Kingdom Points or the LoveCoins, and earned 9 million in fees. Assuming 20% conversion, the scam involved HUNDREDS of millions of RMB.

记者从肇庆市公安局经侦支队了解到，万怡通公司在收取和退还激活款过程中，涉案资金并无用于实际经营且有转移动向。而且，涉案资金余额远远无法支撑该团伙对外宣传的回报所需资金数量。

Reporter has learned from the economic investigation detachment that the funds received by Wanyitong supposedly for activation was not used in operation, and in fact, is in the process of being moved elsewhere. Furthermore, the amount of money involved is in no way sufficient to pay out the return advertised.

张朝晖说，徐某等人利用实际零出资的万怡通公司，许诺固定分红，以补偿万通卡会员现金净损失的理由，在不具备发行股票发行资质的前提下，通过微信、网站等方式，向不特定人员承诺给予不属于真正意义上的货币（爱币）补偿和虚拟股份奖励的方式给付回报的运作模式及行为，涉嫌非法吸收公众存款罪。

Zhang said that Xu, et all promised fixed profit share with the shell company Wanyitong, claimed to be "reimbursing Wantong members", promised all sorts of returns to be paid in invalid currency (LoveCoins) and protoshares, through Internet, and is being suspected of selling illegal securities.

像“万通奇迹”这样，以投资网络虚拟货币为名进行非法集资犯罪，成为当前涉众型经济犯罪的一个新特点。面对形形色色的网络虚拟货币和高额提成诱惑，百姓该如何甄别，练就“火眼金睛”呢？

The new economic crime such as Wantong Miracle seem to highlight an aspect that it entices people to invest in a cryptocurrecy but in reality is illegal securities. How can people see through the facade in the age of various cryptocurrencies and promised huge profits?

张朝晖说，每个人心里都应该树立自我防范意识，牢记“天上不会掉馅饼”，特别是要注意互联网金融存在鱼龙混杂的现象；如果看到涉及高息承诺和原始股权的项目，要特别留心多加警惕。高收益往往伴随着高风险，不规范的经济活动蕴藏着巨大风险；如果老百姓确实有投资意愿，要尽量找一些性价比高而规范的理财产品，特别是要注意其是否有资质，避免落入陷阱。

Zhang said everybody should have a sense of self-preservation. "There is no free lunch". There are a lot of supposed Internet finance that are totally bogus. If you see protoshares and high profit promises, be skeptical. High profit means high risk, and irregular economic activities entails HUGE risk. If you want to invest, find something that can be trusted and is regulated so that you don't get scammed.

----------

Feel free to compare this with the English version from Shanghai Daily

It appears that Xu is indeed in custody. Whether it's *the* Phil Ming Xu, we don't know yet, but it's hard to imagine it can be any one else, as Phil Ming Xu was previously supposedly a producer in Voice of China radio, and later moved to finance as he got to know some stocks and bonds people.

What's surprising is the same scheme was already smashed once in China back in 2012, when it was called Vantone instead of Wantong. Then was smashed again in the US in 2014, and it was reported in the Chinese media as well (link in Chinese) The scheme splinter was smashed in Taiwan in 2015 (link in Chinese) with 15 people charged.

This seems to suggest that perhaps Phil Ming Xu's link with the Shenyang Vantone scam was deeper than he claimed. He claimed before that he was deceived by the guy in Shenyang into helping him get listed in the US. But if he kept on using the name, then went back to China and STILL kept using the name, it can only be a deliberate choice. But that is speculation.

What is clear is these scammers will keep on scamming until they are stopped.

↧

Another article of how WCM got smashed in China (AGAIN), translated

May 18, 2016, 8:44 am

≫ Next: Bad Argument: MLM Strawman Arguments Labelled as Mythbusting

≪ Previous: BREAKING NEWS: WCM777 smashed AGAIN in China, is Phil Ming Xu in custody?

Previously #MLMskeptic translated the article from LegalDaily.com.cn about how WCM got smashed. This time we're translating a different article of the same event, with additional details.

http://tech.ifeng.com/a/20160514/41608055_0.shtml

海归硕士开空壳公司以“虚拟货币”连环套诈骗数亿

Master Degree Open Shell Companies, "Cryptocurrency" Scammed Hundreds of Millions

2016年05月14日 08:17 14-MAY-2016 08:17来源：澎湃新闻作者：邢丙银 Source: Pengpai News Author: Xing Bing

2015年5月，广东肇庆市公安局鼎湖分局经侦大队接群众谢某报案称：其听信嫌疑人梁某花之言，以26000元的价格购买了万通奇迹社交资本云计算平台（以下简称“万通奇迹”）套装产品。开通万通卡成为会员后申请提现，原本每天可分红32美元，但至今未收到分红款项，本金也无法退回。

In May 2015, Zhaoqing City, Dinghu Branch, Economic Investigation Unit (EIU from now on), in Guangdong province received report from citizen Xie, who claimed that he was fooled into believe a Ms. Liang and purchased several Wantong Miracle (WM from now on) Suites for 26000 RMB, received the WM card, and was supposed to receive daily profit of 32 USD, but so far received nothing, and there's no sign of his original investment.

经广东省公安厅经侦总队组织广州、深圳、肇庆三市警方同时开展行动，一起未经有关部门批准，假借投资原始股权理财、电子商务等新概念，以承诺还本付息来吸引公众投资的特大非法吸收公众存款案由此揭开。

With economic investigation unit of three cities: Guangzhou, Shenzhen, and Zhaoqing cooperating, they revealed a huge illegal securities crime, that never was approved or licensed by authorities, and uses buzzwords such as protoshare investment product, e-commerce, and so on, with promises of huge profits.

近日，深圳市公安局经侦支队向澎湃新闻透露，这起案件涉及全国28个省147个县市区5800多名投资人，涉案金额数亿元。目前该案在进一步侦办中。

Recently, Shenzhen EIU told Penpai News that this scam has victims in 28 provinces, 147 jurisdictions, and over 5800 victims, with amount of scam in the hundreds of millions of RMB. Investigation is ongoing.

办案民警介绍，2013年5月，万通奇迹系列融资产品由所谓某投资银行控股集团董事长徐某、CEO刘某及执行董事徐某忠、“金融学家”孙某等人策划成立。
Police investigator said in May 2013, WM series of securities was established by Mr. Xu, president of some investment bank holding group, a Mr. Liu, CEO, an executive director Mr. Xu something Zhong, and a "financial scholar" Mr. Sun

轻信万通奇迹投资收益高被套牢
Belief in WM Investment Profit, Ensnared in Trap

湖南长沙的陈女士是万通奇迹的投资者之一。2013年9月，好友陈某芬告知她称，有一个叫万通的公司发布了万通奇迹系列产品，投资收益高，让她了解一下。

Ms. Chen of Changsha, Hunan province, was an investment in WM. In September 2013, a friend Chen (something) Fang told her that this Wantong (WT from now on) company released a series of WM products, promised huge profits if invested. Asked her to look into it.

随后，陈女士在网上查询了有关万通公司老总徐某的资料。“网上的徐某是天使投资人，作为投资银行的董事，曾帮助7家中国公司在国外上市。”

Later, Ms. Chen searched the boss of Wantong, a Mr. Xu online. "Xu, online, is an angel investor, CEO of an investment bank, helped 7 Chinese companies get listed in foreign exchanges."

陈女士信以为真，加入了一个万通奇迹的QQ群，看到有消息称万通公司将于2013年11月在深圳举行招商会，禁不住诱惑的她从长沙赶到深圳参会。

Ms. Chen believed all these to be true, and joined a WM related QQ Chat group, and learned of a recruiting meeting held by Wantong in Shenzhen coming in November 2013. Unable to resist, she went to Shenzhen to attend the meeting.

据其回忆，当天有几百人参会，万通公司的执行董事周某口若悬河，描绘了一番美好前景，并回答了参会人员的提问。

Based on memory, there were hundreds of people there. Wantong's executive direct, Mr. Zhou, promised the sun and the moon, described a bright future, and answered all of the questions from the attendants.

“投资13000元，每天收益近100元，收益挺高。”会后不久，陈女士即出资39000元买了三套万通奇迹WCM705（每份1999美元）产品。

"If I invest 13000, I can profit 100 per day, that's very high profit." Not long after the meet, Ms. Chen bought in with 39000 RMB and bought three of the WM suite called "WCM705", at $1999 USD each.

陈女士介绍，万通奇迹系列套餐有5种投资金额，分别为399美元、799美元、1999美元、1599美元和1999美元，金额不同每日分红也不同。如购买一套1999美元产品，每日可分红16个电子币，相当于16美元。

Ms. Chen explained that WM suite has 5 amounts: $399, $799, $999, $1599, and $1999. Daily profit is dependent on the amount invested. For the $1999 suite, daily share is 16 E-points, worth 16 USD.

购买万通奇迹产品后，陈女士还在万通公司网站注册成为会员，登陆后可浏览个人资料及账户上的电子币。最初她还能正常提现，不料没几日，提现就出了问题。

After the purchase of these suites, Ms. Chen registered in WM website, and can view her account and accumulated e-points, and even cash out at the beginning, but soon, cashing out became a problem.

“先是被拖延，后来干脆就不能提现了，2014年4月，连网站都打不开了。”陈女士遂询问好友陈某芬的上线王某波，但对方也没说出个所以然来。

"First it was delays, then later all cashing out was stopped. By April 2014, the entire website is gone." Ms. Chen asked her friend's upline, a Mr. Wang (something) Po, but he had no explanation.

2015年5月，陈女士获悉徐某在深圳新开了万怡通国际投资发展（深圳）有限公司（下称“万怡通公司”），而且还将在一五星级酒店召开投资宣传会，她又赶了过去。

In May 2015, Ms. Chen hard that Mr. Xu has established a new company in Shenzhen called WanYiTong (WYT from now on), and will do a promo event at a 5-star hotel. She went to check it out.

“他和参会的人谈怎样经营公司，以及如何挽回以前投资的损失。”陈女士说，此后，徐某就在微信群发布公告称：原万通奇迹会员，如果将原损失金额的1%汇入新成立的万怡通公司银行账号，就可成为新会员，还可把原来亏损的电子币激活转为“爱币”。

"He talked with the attendants about how to operate the company, how to recover the previous investment losses." Ms. Chen said, later, Mr. Xu announced via WeChat group that all original WM members can get a headstart in the WYT company by wiring 1% of the previously lost amount to WYT, become new WYT member, and converted the original e-Points into "AiBi" (LoveCoins).

为什么愿意激活“爱币”？陈女士说，一方面是想挽回损失，另一方面是因为徐某明确表示新成立的公司上市后，“爱币”可转为公司的原始股权。于是，她将390元汇了出去，换来了虚拟的“爱币”。

Why was she willing to believe in LoveCoins? Ms. Chen said, part of it is hoping to recover her losses, and part of it is Mr. Xu expressed clearly that when the new company IPO, the LoveCoins can be converted into company protoshares. Thus, she wired the company another $390 RMB, and got back a bunch of virtual currency "LoveCoins".

百般抵赖，拖延投资者提现
One excuse after another, delay investors from cashing out

办案民警介绍，2013年5月，万通奇迹系列融资产品由所谓某投资银行控股集团董事长徐某、CEO刘某及执行董事徐某忠、“金融学家”孙某等人策划成立。

Police investigator explained that WM was launched in May 2013 by a Mr. Xu, so-called some investment bank holding group President, Mr. Liu CEO, Executive Director Mr. Xu something Zhong, and "financial scholar" Mr. Sun.

徐某是江苏丹阳人，1972年出生，1992年至1996年就读于北京某高校，1999年至2001年在美国南加州大学读硕士。此后他在投资银行行业工作过，2012年投资万通公司。

Mr. Xu is from Danyang, in Jiangsu province, and born in 1972. In 1992-1996 he studied at a university in Beijing, and in 1999-2001 got a masters at USC. Later he worked at investment banking industry, and went into WT in 2012.

万通奇迹最初以北京为中心，号称可利用互联网云服务、云计算和全球零售折扣系统为客户提供资本增值，还承诺会员购买系列套装后，可注册成为万通卡会员，往后每日可获得分红，最高分红次数为100次。其中电子钱包分红16电子币可申请提现，购物钱包分红16电子币可用于网上购物。

WM started expansion centered on Beijing, claiming to be using Internet cloud services, cloud computing, and work retail discount system to provide clients with "capital appreciation". WM promised that once members purchases the various system suites, registered as WT Card member, then every day they will be able to profit share, up to 100 times. The profit share comes in two forms: the 16 E-points share can be cashed out, while 16 points of wallet shares can be used for online purchases.

办案民警称，2013年6月，全国各地大量购买万通奇迹系列套装资金汇入徐某等人控制的北京公司及境外公司账户内，原本承诺的分红电子币数额急速增加，会员申请提现增速快。当年底，徐某等人为防止资金倒流，通过限制提现金额、拖延提现期限等方式，限制、拖延会员提现。

Investigator claimed that in June 2013, a huge number of purchases of the various suites got capital flowing into the Beijing company operated by Xu, et al, and its foreign accounts, and the promised profit share started to accumulate rapidly, and the cash out requests rose quickly as well. By the end of the year, Xu, et all, trying to prevent the cash drain, started implementing cash out limits, increase the cash out delay, and basically limit and delay any sort of member withdrawal.

2014年7月，徐某还以引进新财团需转接新旧服务器、整合数据等为借口，暂停会员提现。同年10月份，徐某又以需处理境外事务和会员申报损失为借口，继续拖延会员提现。

In July 2014, Xu, using the excuse that he had to integrate system with a new financial group, stopped withdrawals altogether. In October same year, Xu further claimed that he need to take care of business abroad and there were a lot of losses by members, and continued to prevent withdrawals.

“实际上当时徐某正被公安机关查处，2014年8月，他在未返还投资人的投资款的情况下，停止出售万通奇迹系列套装产品，并关闭了万通公司的网站。”办案民警说。

"The truth is Xu is being investigated by Chinese Public Security. In August 2014, without returning any of the investor's capital, he stopped selling the WM products, and closed the website." Investigator said.

成立十余家空壳公司，诱骗公众投资
Established a dozen empty shell companies, continue to scam public into investing

万通公司这根线断掉之后，徐某利用万通奇迹平台和人员渠道，另起炉灶，继续从事非法吸收公众存款的活动。

After Wantong (WT) died, Xu used the Wantong Miracle (WM) platform and people to restart the scheme under a different name, continue to sell illegal securities.

这起案件有另外两个不得不提的人物，分别是徐某的父亲徐某俊和徐某的表兄汤某祥。

This case has two other character that must be mentioned... Xu's father Xu (unknown) Jun, and Xu's cousin, Tang (unknown) Xiang

办案民警介绍，2015年5月，徐某纠集徐某俊、汤某祥等人成立万怡通公司、国度金融控股投资（深圳）有限公司、百人网络科技（深圳）有限公司等十余家公司。其中汤某祥为万怡通公司的法人代表，徐某俊为国度金控等余下十余家公司的法人代表。为撇清关系，由徐某担任这些公司的顾问，事实上徐某为幕后操控者。

Investigator explained, in May 2015, Xu organized Xu (Sr.) and Tang to established WanYiTong (WYT from now on), Kingdom Financial Holding Investment, HundredNet Tech, and a dozen other companies. WYT is supposedly owned by Tang, while Kingdom Financial is supposedly held by Xu Sr., and Xu was supposedly their consultant. In reality Xu controlled all of these entities.

上述公司成立后，徐某即在微信群及原万通奇迹平台发布信息，表示为弥补原万通奇迹投资者的损失，原万通卡会员只要缴纳损失额1%的费用，即可注册成为国度金控的会员，原损失被激活成为“爱币”。“爱币”不可提现，但可购买公司的原始股权。

After establishing these companies, Xu released news in the original WM platform, and the QQ / WeChat groups that he has a way to help make up the losses suffered by all the WM investors. All WT Card members just pay 1% of the amount they lost, and they will become Kingdom's members, and the originally loss will be converted into "AiBi" (LoveCoin). LoveCoin cannot be cashed out, but can be used to purchase the company's protoshares.

徐某供称，他用三个手机号分别注册了三个不同的微信号，目的就是为了建立多个微信群，“安抚”过去投资万通奇迹受损的群众。

Xu confessed that he used three separate phones to register 3 separate WeChat accounts, to create multiple WeChat groups, in order to "appease"the crowd that suffered losses under WM.

事实上，国度金控、百人网等十余家公司均是空壳运转，其中，万怡通公司和百人网公司的认缴注册资本虽都是10000万元，但实缴均是0元。办案民警说，这些公司不过是徐某欺骗投资者的幌子，他们仅靠投资者的钱款来弥补公司运营成本。

In reality, Kingdom, HundredNet, and the dozen companies are all empty shells. WYT and HundredNet registered claiming they have 100 million RMB in capital in shares, but it actually had no capital at all. Investigator said, these companies are merely a guise Xu used to cheat all the investors. Company has no funds other than those deposited by investors.

“他们通过互联网、微博、微信、召开新闻发布会等方式宣称国度金控将推出‘IPL板’业务（即自行发行公司股份、认购、挂牌交易），推动这十余家子公司于3-24个月内挂牌上市，以此欺骗社会公众购买上述公司原始股权，达到非法吸收公众存款的目的。”办案民警说。

"They used Internet, Weibo, WeChat, news conference, and other methods to claim that Kingdom will soon go IPO (issue its own shares, get listed in stock exchanges), in order to push the dozen or so subsidiaries to go IPO in the next 3-24 months, thus defrauding the public into purchases the "protoshares" of these companies, and thus, selling illegal securities." Investigators explained.

主犯用多个虚假头衔欺骗投资者

Primary Suspect Used Various Fake Titles to Deceive Investors

在两年多的时间内，徐某等人非法吸收公众存款案涉及全国28个省的5800多名投资人。为何会有这么多投资者上当？

In the two or so years, Xu, et all managed to illegally solicit investment from over 5800 people in 28 different provinces. Why were so many investors scammed?

“徐某很会包装自己，也会宣传自己，容易让群众上当受骗。”办案民警介绍，万通公司官网显示，徐某有“中国企业海外发展中心理事长”、“世界华商联合会副秘书长”等多个头衔，但实际上这些头衔均是假的。

"Xu is very good in presenting himself, and promoting himself, as to trick the masses" Investigator explained. On the WT website, Xu claimed to be "Director, China Overseas Development Center", "Deputy Secretary, World Federation of Chinese Entrepreneurs", and a litany of long-winded titles. In fact, all these titles are bogus.

办案民警还说，每次召开招商会，徐某都选择在五星级酒店举办，办公地点均设在深圳繁华地段的高档写字楼，这些给投资者一种“高大上”的假象，诱骗投资者上当。

Police investigator said, whenever Xu conducts an investment promo, he chose to do it at a 5-star hotel. Their office was in a prime commercial section of Shenzhen, in a prime office building. Which gave the investors a false impression of prestige to further deceive them.

据汤某祥供称，万通公司关停后，新成立的国度金控公司一方面将原万通卡老会员，通过电子币激活的形式转换成新公司的会员，另一方面通过百人网络等渠道举办论坛、推荐会，还采用老会员带新会员的方式，线下发展会员。

According to Tang (Xu's cousin), once WT closed, Kingdom tried to convert the old WT members over using the E-Coin activation ruse, while also used the HundredNet and online forums to promote and entice others to join, with incentive to existing members to bring in new members as downlines.

“我介绍两个姐姐投资万通奇迹，而后她们又介绍其他亲友投资。”陈女士说，若介绍一名新人购买1999美元的万通奇迹产品，会有304美元的奖励，因为奖励高，会员都比较乐意介绍新人投资。

"I introduced two sisters to invest in WM, and they recruited additional friends and family to invest." Ms. Chen said. There is a $304 USD commission for introducing someone who buy the $1999 suite, so there were a lot of people who are willing to introduce new investors into the network.

办案民警还介绍，新成立的国度金控在全国65市发展65名“国度市长”，如“国度广州市长”、“国度成都市长”等，这些“市长”负责管理协调当地会员工作，如帮助那些不会使用网络的老年投资者向万怡通公司账号汇款，代他人激活“爱币”等。当然这些“市长”都会获得相应的奖励。

Investigator explained further, that the Kingdom company also created "Kingdom Mayors" in 65 cities around the country, such as "Kingdom Guangzhou Mayor", "Kingdom Chengdu Mayor" and so on who are responsible to control local members, such as helping old investors who don't know the Internet to register online, to wire money to WYT's account, to help others "activate" the LoveCoins. Obviously such "mayors" are appropriately compensated.

警方认为，徐某等人利用实际零出资的万怡通公司，许诺固定分红，以补偿万通卡会员现金净损失为由，在不具备发行股票发行资质的前提下，通过微信、网站等方式，向不特定人员承诺给予不属于真正意义上的货币（“爱币”）补偿和虚拟股份奖励，这一运作模式及行为涉嫌非法吸收公众存款罪

Police believe that Xu, et al, used a zero-fund WYT company, "promised fixed profit share, using the claim that they are compensating members of Wantong Card their net losses, having no qualifications or capital to be issuing stocks or securities, using WeChat, Websites, and soon, promised to the public they will be compensated by virtual shares (protoshares) and virtual coins (LoveCoin). This operation is suspected of illegally soliciting deposit from the public (selling illegal securities).

--------

With all these details, it's IMPOSSIBLE to imagine this can be anyone other than Phil Ming Xu of WCM777. The only question is whether he's in custody in China or not, and how will Chinese justice deal with him.

↧

Bad Argument: MLM Strawman Arguments Labelled as Mythbusting

May 20, 2016, 11:22 am

≫ Next: Scam Psychology: Luck Blindness, or why lucky people see it as skill, not luck

≪ Previous: Another article of how WCM got smashed in China (AGAIN), translated

A lot of so-called MLM "coaches" write articles to drum up business and recruit downlines, and they have to deal with, what they perceive as "undue criticism" of MLM. However, what they often ended up doing is defeat strawman arguments.

Recently I came across a certain article titled "6 Biggest Myths about MLM -- A Must Read" by Nathan Sloan posted on Network Marketing HQ dot co dot uk. (Interesting, the URL says 7, so he seem to have lost one in the edit), and it served as a prime example of how MLMers argue... broad insinuations, strawman, this guy used them all.

His myth #1: Pyramid structures are bad

Pyramid SCHEMES are bad. Pyramid structure or pyramid-shaped organizations are not necessarily bad. If a MLMer, even a noob, can't explain the difference between a pyramid structure and a pyramid SCHEME, s/he is uneducated in the MLM fundamentals and his/her upline should be ashamed.

However, instead of explaining this fundamental difference, Mr. Sloan instead pointed out that pyramid structures surrounds us. Basically, he failed to identify the real problem, and instead, went to equivocation fallacy instead. Indeed, this is a common "MLM defense" tactic, present a strawman equivocation with "safe" structures.

Verdict: strawman myth

Solution: Mr. Sloan should concentrate on differentiating pyramid SCHEME vs. pyramid organization. Pyramid scheme is fraud. Pyramid organization is just a shape.

His myth #2: MLM is a Scam

Is MLM a scam? Sloan's explanation is that pyramid schemes are illegal, MLM is not. However, instead of explaining the difference between MLM and pyramid scheme, he simply quoted an OUTDATED definition he copied from "Ultimate Guide to Network Marketing" without attribution. And yes, I have this book on my bookshelf. That's how I recognized it. It was published more than 10 years ago (2005).

For the record, MLM in its current form was created in 1979 when Amway settled with American Federal Trade Commission to institute several reforms (today known as the "Amway Safeguard Rules") in order to keep on operating. The short of it is, the difference between MLM and pyramid scheme is MLM NEVER pays on recruitment (but there are ways to disguise the payment). This is what Sloan failed to address.

However, Sloan then went on to knock down another strawman. He claimed that any one who said MLM is a scam are lying to cover up their laziness and failure. This is in clear contrast of several pyramid schemes that presented themselves as MLM that were shut down. FHTM (shut down 2013) and Vemma (shut down 2015) are just some recent examples. By ignoring a prime example where a scam MLM did operate, Sloan is guilty of lying by omission AND a strawman, not to mention victim-blaming.

Verdict: strawman fallacy, lying by omission (or ignorance), plagiarism, unsupported argument (did not explain difference between pyramid scheme and MLM)

Solution: Sloan should acknowledge that many MLMs are done fraudulently, and attempt to explain the real LEGAL differences why MLM is not a pyramid scheme. Simply quoting a definition is not defense without explaining how that applies to your defense.

His myth #3: People are just in it for themselves

He claimed that people introducing products to you are indeed trying to make money from you, but then any salespeople do that, so that's not a valid point of criticism. While what he explained is true, it is, again, guilty of omission.

There are TWO general types of MLMers... sellers, and recruiters. A seller genuinely wants to sell you a product first, have you joined his/her sales team second (if ever). A recruiter, on the other hand, is all about adding people (i.e. you) to his/her team, and have them on a monthly autoship (subscription) no matter if they can sell or not. CNBC pointed this out before:

That has sparked a growing debate over whether Herbalife and other multi-level marketing companies, are essentially pyramid schemes. That's when distributors make more money recruiting other sellers, rather than selling the products themselves, with profits flowing to the very top at the expense of those at the bottom.

How do you know the MLMer that approach you is really interested in selling you the product (to improve your life in a certain way)... or to add you to his/her team? You don't at first. You need prolonged exposure. Yet it is a COMMON attitude that you cannot succeed in MLM without recruiting though most of the time they use the term "team building".

Also keep in mind that if they sell product to you, they made ONE sale. If they signed you up on autoship as distributor, they make money off you UNTIL YOU QUIT. And if you went on to recruit like they recruited you, they make even MORE. Thus, the entire system is designed to create RECRUITERS, not sellers. Once they got enough income (their recruits / downlines do all the heavy lifting) they can be more genuinely selling, but that just means they are in the MINORITY.

So why is Sloam asking people to presume that MLMer you meet is a seller when chances of him or her being a recruiter is much greater?

Verdict: lying by omission (or genuine ignorance)

Solution: Instead of asking people to PRESUME anybody that want to sell you something is out to help you, he should be talking about how to spot the leaders who genuinely want to sell and lead, rather than just add to his or her downline pool.

His myth #4: it doesn't work due to market saturation

One of the criticisms about MLM if you keep touting replication, i.e. you find X people and they each find X people sooner or later you run out of people on this planet and have to go find some aliens. So why does Sloan say this is a myth? His explanation is that you don't *have* to recruit... According to Sloan, "you can build a highly success (sic) MLM business by just building a customer base without ever recruiting anyone".

To which I ask... WHICH MLM would that be? Most MLMs give you bigger discounts if you keep recruiting and your "team" (downlines) reach a certain size ("matching legs", any one?) and/or made certain amount of "sales" (i.e. subscriptions).

Basically, Sloan here pointed out an exception in the argument... WITHOUT pointing out how often does this exception happen. Apparently, if the exception happens, oh, 1 in 1000, it somehow negates the general truth of the argument.

Furthermore, as we pointed out in the previous myth, the system is DESIGNED to create recruiters, not sellers.

Then he had to just throw in an insult at "critics" using the "they just don't understand" trope.

Verdict: misrepresenting proportionality, ad hominem / stereotype

Solution: Sloan should have pointed out how to build such an organization that focused on MARKETING the products (i.e. how he claimed it can happen) rather than the typical recruiter-focused way most MLMs are run, and how to avoid such temptations.

His myth #5: There are ethics and relationship costs?

Sloan seem to need an editor, as the subtitle is ungrammatical. Any way, he basically said that ethical and relational costs of MLM can be avoided if people are just honest and upfront about what they are presenting. Many noob MLMers are taught by unscrupulous uplines to invite old friends for a catchup, only to be lumped into a sales pitch meeting.

This part I absolutely agree, but he seems to have not caught on to behavioral economics, esp. Dan Ariely's study about social norm vs. financial norm. The two does not mix in general, and it's that mixing making everything awkward. MLM, which relies on relationships, is all for the mixing. That is the FUNDAMENTAL NATURE of MLM, and simply being upfront doesn't solve the issue, it only made the whole thing most honest. The cost is still there, only it was NOT compounded by lying.

Verdict: Mostly true, can be better presented

Solution: Sloan should read up on Dan Ariely and other Behavioral Economics developments on relationships and try to incorporate them into this specific topic.

His myth #6: Only The People At the Top Ever Make Money

Sloan here tried to explain away that in most industries or even skill learning only a few will ever reach the top.

The problem is his analogy is faulty.

While it's true that only a tiny percentage of workers will ever reach the top, the difference is most people in MLM will actually LOSE money, due to the monthly autoship. Whereas most people who work at a job actually earn money.

Which rendered the rest of his analogies (martial arts dojo, gym membership) null and void.

Then he went on to repeat the factoid that 90% of all business fail. It's NOT TRUE. It's been fact-checked by Washington Post. It's crap.

Verdict: bad analogy, bad evidence.

Solution: Pick a proper analogy or avoid this line of reasoning altogether. And do better fact-checking. Repeating a myth, even one repeated by famous politicians, does not make it true.

Conclusion

Out of six myths, Sloan only managed to bust one properly, and even then there's somewhat incomplete information.

Overall grade: F

It can be improved though. Don't make the mistakes he did.

Original is at http://www.networkmarketinghq.co.uk/education/7-biggest-myths-mlm-must-read/

↧

Scam Psychology: Luck Blindness, or why lucky people see it as skill, not luck

May 22, 2016, 6:19 am

≫ Next: Scam Psychology: "You have to try it to understand it" fallacy

≪ Previous: Bad Argument: MLM Strawman Arguments Labelled as Mythbusting

Success is dependent on many different factors, but it can usually be summarized as

...be at the right place, at the right time, with the right training to spot the opportunity, and have enough resources to call upon to take advantage of the opportunity.

It should be readily obvious that rich people have a better chance at success because they started out with better starting positions. Donald Trump was practically born with a silver spoon (his father was a real estate tycoon). Conversely, poor people can't succeed if they don't find the right connections to make their talent known, no matter how hard working they are.

Outliers (book) (Photo credit: Wikipedia)

In the book "Outliers", Malcolm Gladwell reported that a good portion of professional hockey players found success due to their birthmonth, not solely via their talent. Why? If they were born in January, an arbitrary line used by the youth hockey leagues to divide up the years, they would enjoy physical advantage over the other kids who were born later in the year (generally speaking, of course) but still in the same league. And this physical advantage would lead to success, which would lead to them developing a taste for hockey, and eventually, into a pro career. Of course they trained hard, and they got some physical skills, but luck of having been born in month of January played a part in their success... They may not be aware of it, but that doesn't mean it didn't affect them.

Yet when you ask successful people how did they succeed, they will rarely if EVER mention luck. And in fact, some get downright offended if you try to bring up the role of luck in their success. This known as the "luck blindness" cognitive bias.

A few years ago Cornell economist Robert Frank wrote an opinion column for New York Times about luck and fairness, and for that he was invited on the air by Fox Business host Stuart Varney to talk about it. Varney opened the show by introducing Frank, then immediately jumped down Frank's throat: "Do you know how insulting that was, when I read that? I came to America with nothing 35 year sago. I've made something of myself, I think through hard work, talent, and risk-taking, and you're going to write in the New York Times that this is luck." As you can imagine, it didn't go well for the rest of the interview.

Many people can look past their luck blindness though. Warren Buffet readily admits that he had won the 'genetic lottery' to have been born in the US to a loving family. And in a way, "gratefulness" (thanking God and the universe) is a way to acknowledge luck played a role.

How Luck Blindness Can Mislead You

Scammers know luck blindness is a button they can push to make you behave, along with sunk cost fallacy, hindsight bias, IKEA effect, and so on. By making you believe you are on your way to success, scammers will continue to take money from you, and you'll be happy doing so, because you believe you have learned skills, when it was either luck, or "arranged" success.

Humans are rational beings, and want the world to fit laws, even if laws had to be non-sensical (such as superstition). Luck blindness exists because luck cannot be explained, so most simply ignore it. It does not fit into the narrative of hard work and talent.

Yet the world is full of stories about luck. Bill Gate's Microsoft got the nod to create DOS for the IBM PC because his competitor didn't like the deal IBM offered. Bruce Willis, a nobody in the movie business (known only for his role in Moonlighting TV series) was picked to star in Diehard after practically EVERY major Hollywood star turned it down. Were Bill Gates and Bruce Willis lucky? Not just that though. Were they at the right place, right time, with the right resources? Of course they are. Luck is one of the factors.

Yet when you tell this incontrovertible truth to someone's face, such as Stuart Varney earlier, many of them didn't hear the truth, but rather, they hard something else, that they were just "lucky", a "fluke", and they were actually failures, because admitting luck had a role in one's success is a serious blow to one's self image.

How does this apply to MLM? If you look at each MLM's income disclosure statement, it is clear that 90+% of participants failed to earn any significant amount of money (maybe $1000 a year for US participants). Yet every year MLMs hold giant conventions in large stadiums and parade those who succeeded in front of the minions who did not with a clear message "you too can be like them" despite the odds are less than 1 in 100 to make a living wage.

(Take NuSkin as an example, 2014 income disclosure says roughly 1% of all "active" distributors earn 30K or more a year)

If you ask those who, say, make 100K or more, will they attribute their success to luck... or hard work? It'd clearly the latter. People who enjoy success (or want success) see no role for luck in their success. They think American is a meritocracy, even though luck clearly played a role.

Indeed, this often played into survivorship bias, in that only people who succeeded will write memoirs and how-to books and teach classes, and since you can't teach luck, the impression they give in their classes and memoirs and books will be "just do what I did", since even they don't know how much did luck affect their success.

How Luck Blindness Can HURT YOU

Luck blindness is often used backwards in MLM and pyramid schemes, in that "there is no luck, there is only hard work."

If you did not succeed in MLM, according to some coaches, it was not bad luck, it is because you did not work hard enough. In fact, somebody came up with a bogus "gym analogy", basically claiming that joining a MLM does not guarantee success, just as joining a gym does not guarantee fitness. It makes sense, until all the analogy start to fall apart once you look a little closer. Some "coaches" even go as far as claiming that all the negative perceptions about MLM were spread by lazy people who decided MLM is too much work, even though there clearly are scam MLMs such as FHTM (shut down 2012 by FTC) and Vemma (shut down 2015 by FTC) in just past few years, not to mention various pyramid schemes that claimed to be multi-level.

When you think about it, it's really victim blaming and no-true-Scotsman.

A: Hard work + MLM = Success!
B: But I worked hard at this MLM and failed.
A: Obviously you didn't work hard enough!

Remember that in MLMs (and some pyramid schemes) the "successes" was paraded to "inspire" the minions to keep going. So the minions, losing money, are taught that this is a part of "working hard" (while making your upline $$$), that this "failure" is supposed to be temporary (it isn't), and they stay in... until their wallet is empty, and then they are shamed for their lack of luck, because luck has no place in the success narrative.

So not only you fail, you fail with a sense of shame... so you are less likely to complain, because you were taught that it cannot be the system.

Why not? What if you were PROGRAMMED to fail? What if you need connections to succeed? Did you know that high-flyers in various MLMs often have insider connections?

How does luck fit into YOUR success narrative?

http://nymag.com/scienceofus/2016/05/why-americans-ignore-the-role-of-luck-in-everything.html

↧

Scam Psychology: "You have to try it to understand it" fallacy

May 31, 2016, 12:19 pm

≫ Next: Mythbusting: The Trump University is based on (some) bogus research

≪ Previous: Scam Psychology: Luck Blindness, or why lucky people see it as skill, not luck

One of the most popular fallacies trotted out by scammers and scammed sheeple is "you have to try it to understand it". It has a cousin known as "you're not in it (so shut up)" argument.

Basically, the claim that any criticism levelled at the scheme is premature because the critics have not tried the scheme. The implication is once the critic have tried the scheme s/he will change his/her mind. It basically takes this form

A: Acme XYZ is a scam because of ____, _____, and _____.

B: But you don't know Acme XYZ. How could you when you're not a member? Join us.

The reply sounds very sensical, until you realize one thing: It never addressed your point: "Acme XYZ is a scam". It is completely irrelevant. It is a red herring. It neither disproves your premise, nor does it prove a counter premise.

The argument is non-sensical, and here's a very appropriate reply quip for such idiocy:

"So you have to eat shit to know not to eat it, huh?"

(Thanks to justicealwayslate on Facebook)

There are plenty of other quips, like "oh, so cops have to be criminals first to arrest criminals, huh?" or "do I have to shoot myself to know it's a bad idea?" or "Do morticians have to die to be a mortician?" But you get the idea. It's ridiculous.

The fallacy stems from "error in perspective". Basically, the proponent of the fallacy believe the other people (i.e. the critics) are wrong, except in reality, they are wrong. The proponents have an error in perspective they do not even realize or perhaps they do realize but not see the importance. And they believe a trial run is enough to change critic's mind.

Real life doesn't work that way. Evidence is evidence whether it was personally experienced or not. In fact, personal experience makes evidence LESS reliable due to illusory superiority bias, motivated thinking, IKEA effect, ownership bias, sunk cost fallacy, and much more.

The entire counter argument can be used as proof that the speaker has NO effective counterargument and instead tries to appeal to emotion instead.

So next time you run into "you have to try it to understand it" fallacy, you know the perfect comeback.

↧

Mythbusting: The Trump University is based on (some) bogus research

June 10, 2016, 2:27 pm

≫ Next: Cognitive Bias: Choice Supportive Bias (aka Post-hoc Rationalization)

≪ Previous: Scam Psychology: "You have to try it to understand it" fallacy

Trump University was in the news a lot, and it seems it may be the only thing that really got Trump riled up, as it's something he can't deny or denigrate... since it's his own. So instead, he denigrated everybody else... including the judge, which lead to furious denunciation by Republican leadership, who are put between the rock and the hard place of "supporting" their presumptive nominee WHILE wondering WTF happened that lead to this guy winning. The furor was so loud even Trump himself furiously backpedaled, claiming his comments were "misconstrued".

But we know EXACTLY what you mean, Mr. Trump.

In digging through some info about the Trump University, I came across its sales playbook dug up by Politico a while back. And it has some interesting information in it. Basically, they don't talk to the media, they don't let the lecturers over promise (any such incidents are reported to main office), and they will use psychological pressure to push you into buying their more expensive courses...

Including a bogus urban myth, such as "most persuasive words... from Yale University"

On page 99 of the document, you can find this:

Trump University Playbook, as posted by Politico.com, see URL on top

The important part says:

The most persuasive words in the English language according to a study by the Psychology Department of Yale University are: You, New, Money, Easy, Discovery, Free, Results, Health, Save, Proven, Guarantee, and Love

Except there was no such study. This is an urban legend.

The first version of this list had only ten words: You, Easy, Money, Save, Love, New, Discovery, Results, Proven, and Guarantee, and it dates back to 1963 in a column by "Bennett Cerf", who's legendary for coming up with apocryphal stories that there's more than a dozen mentions of him on Snopes.com, an urban legend (and debunking) website. He however, attributed the list to "big advertising agency". And there are signs that the list may have predated even that (as far back as 1961!) quoting a nonexistent "Marketing Magazine".

The version used by Trump University is from 1970 and first appeared in a column by L. M. Boyd and attributed to Yale university.

Except there was no such study. There was no sign of there ever was such a study at Yale. There was a "Yale Communication and Attitude Change Project" in the 1950's and 1960's, and Robert P. Abelson was a participant. If there was such a study at Yale, he'd know about it, and there wasn't.

Benjamin Zimmer and linguist and lexicographer, dug all this up in a week, through judicious research. The conclusion is simple... There was no such study. The list is bogus. It was made up.

Makes you wonder what else is bogus about the Trump University, doesn't it?

↧

Cognitive Bias: Choice Supportive Bias (aka Post-hoc Rationalization)

June 12, 2016, 12:13 pm

≫ Next: Commentary: How "Ultimate Guide to Network Marketing" illustrates what's wrong with Network Marketing

≪ Previous: Mythbusting: The Trump University is based on (some) bogus research

Previously we have often talked about cognitive dissoance, which is basically when a person is faced with two sets of "truths", and they conflict, therefore one set of which must be false.

For example, let's say the person has joined a suspect scheme, and is withdrawing money bi-weekly, but not yet achieved breakeven. Then he's exposed to a source that explained that the scheme is a scam with trustworthy sources.

So, how does one resolve this conflict between two sets of facts... a) the scheme works, I am getting paid and b) the scheme is a scam ?

One way the conflict can be resolved is through "choice supportive bias", also known as post-hoc rationalization. As the person is already in the scheme, the person is likely to choose to continue in the scheme and therefore decide that the trustworthy sources (that explain the scheme is a scam) are NOT acceptable.

Basically, the person wants the answer to be "scheme is fine" and thus chose that outcome, and came up with reasons to discount the trustworthy sources post-hoc (after the fact). Normal logic is check all the sources, then arrive at the conclusion. This is the reverse... The person know the conclusion s/he wants, then come up with the reasons later. It's motivated thinking.

As you can probably guess, motivated thinking means more often than not the person will reach the WRONG conclusion, since the conclusion was NOT deduced from logic, but emotion.

Let's look at some examples...

ZeekRewards is a ponzi scheme that had been shut down in 2012 by SEC and Secret Service as a 700-850 million ponzi scheme with a million plus victims. The winners want to believe that the good times will continue forever, and the losers want to believe they will become winners. It is a textbook case of Choice Supportive Bias.

On August 4th, Gregory Caldwell, the "Acting" CEO of Zeek Rewards announced to the world in a press release:

All our critics (are) self-appointed with no standing in the professional community (and are) behaving unprofessionally by acting on false information.

Less than two weeks later, on August 17th, Zeek Rewards was shut down by SEC and Secret Service.

There really are only two conclusions you can reach about Mr. Caldwell... 1) He honestly believed he's heading a real profitable company or 2) He knew he was lying.

Let's assume he believed it, but the fact is two weeks later SEC closed his company. So he was WRONG. The critics knew exactly what they were criticizing, the information were not false.

Thus, choice supporting bias.

But let's look at the victims. Here's a reporter local to Lexington, NC, home of Zeek Rewards, wrote on his personal blog after Zeek went crashing down.

When the NC AG first confirmed that Zeek was being investigated for fraud, many Zeekers welcomed this because surely the office would find Zeek to be legitimate. When the SEC stepped in and closed the doors, charging that it was a Ponzi and a pyramid, and that Burks allegedly skimmed millions for his personal use, the yammering began: the SEC is corrupt, the BBB is corrupt, your mother is corrupt, this is another instance of too much government intrusion and it's another government conspiracy to keep you from being wealthy, that Social Security and Medicare are Ponzi schemes and why not investigate them (SS is not, see here), ad nauseum. The Zeekers' arrogance is both amusing and disturbing.

Zeeker / Zeekhead, whatever name you give to the Zeek followers, they are just... completely blind to the truth. In their mind, Zeek can do no wrong, thus it must be EVERYBODY ELSE that is wrong, and they came up with various reasons (post-hoc rationalization) like government intrusion, a few "rogues" that ruined it for everybody else, some "bloggers" badmouthing the company, a few critics who don't know the truth like their CEO said...

sign on Zeek's front window circa late 2012
"We forgive you, please restructure
and save our dreams!"

Have you seen this sign posted in front of Zeek office not long after Zeek was closed?

The victim here cannot believe s/he was scammed by a 700-850 million ponzi scheme, but instead, chose to believe that Zeek was... just suffering some temporary setback, and just need to be restructured to continue running.

It's clearly post-hoc rationalization, because the truth ("I've been scammed") is just not acceptable. Better make up a reason and deny reality.

But the rationalizations about Zeek gets downright delusional, including claims that Paul Burks, head of Zeek Rewards, was cheated by his attorney. This narrative was floated by Kettner and Craddock and this was a screenshot of their website (red underline are mine)

Screenshot of Craddock and Kettner's website hoping to raise funds
from Zeek affiliates to "defend Zeek against SEC"

They have no evidence. This is the narrative they want to present to further their own conclusion and benefit themselves (monetary-wise). The honest truth based on case files available to the public indicates that both the prosecution and defense agreed to SEAL the case files, which means PLENTY of evidence had been filed with the court, and defense had reviewed them and consider them so damaging they should not be revealed to the public. You can see details here.

In attempting to float their own narrative, the two, David Kettner and Robert Craddock, basically chose to turn a blind eye to the truth. It is worth noting that they have powerful reasons to do so. David Kettner, along with his wife Mary, are net winners in Zeek, and according to the Zeek Receiver cleared almost a million dollars in 18 months. Mary Kettner was indignant, claimed because she paid 50% income tax she is entitled to keep the rest on social media.

As for Mr. Robert Craddock... He's a Zeek Consultant, working with Zeek Acting CEO Caldwell that got my detailed analysis of Zeek Scam webpage taken offline for a week... three weeks before SEC moved in. After SEC shut down the scam he and Kettner were the head of "Zeek is legal and give me money so I can defend it and restart it" movement. He even started a website "InternetClowns" where he denigrated critics of Zeek. Then suddenly he went silent. Later it was revealed that Craddock had scammed the Federal government by claiming nonexistent damages for a gulf oil spill and will be spending 6 months in jail.

Basically, they *want* the truth to be a certain way, so they went looking for evidence. It should be the other way around. Find evidence, THEN reach conclusion.

There are many other examples, but you get the idea.

Basically, you can't *wish* for a conclusion, but you must evaluate the evidence and logic to reach your conclusion, else the conclusion you arrive at may not be the proper one.

↧

Commentary: How "Ultimate Guide to Network Marketing" illustrates what's wrong with Network Marketing

June 16, 2016, 9:30 pm

≫ Next: How to be a cranky troll: Guide to IGNORE all useful feedback

≪ Previous: Cognitive Bias: Choice Supportive Bias (aka Post-hoc Rationalization)

I often browse used bookstores, and one day I came across "Ultimate Guide to Network Marketing" edited by Dr. Paul Rubino. As the MLM Skeptic, I read it with a skeptical mind... Overall, I am rather... disappointed. While several of the authors out of 37 did dispense practical advice, such as how to utilize modern tech like autoresponder and such, while others laid out do's and don'ts on what to say in a sales speech, ZERO discussed what's legal and what's not legal.

"Pyramid scheme" was NEVER discussed, other than as an resistance to be overcome, as doubt in a prospect that must be quashed, and so on.

Product-based pyramid scheme was never mentioned.

In fact, the entire book is devoid of definitions other than odd backronyms like WOO = window of opportunity. There is no glossary, just an index.

Consider the implication: how would the network marketing noob know what's legal and what's not if it was NOT discussed in a so-called "Ultimate Guide to Network Marketing"? How "ultimate" can this guide be if legal stuff was not discussed at all?

Furthermore, many of the chapters were about belief / faith. Belief in oneself, belief in product, belief in company, belief in team... Belief involves TRUST. What happened to due diligence? Common sense? What makes the company, product, or team members WORTHY of trust?

This is basically a collection of "business porn"... written by network marketing "leaders" who claimed success through effort even though they can't prove that their success was a result of their effort. Anything they wrote are results of survivorship bias and self-serving bias, but people starting in network marketing believe these to be words of wisdom, and indeed, many of the 37 articles advocate "just ape what I do" or "create system that can be easily aped"

In fact, one article is about how to CREATE business porn... awards, recognitions, newsletters, mailing lists, podcasts, Youtube videos, and so on, as marketing vehicles.

Would you really consider "monkey see, monkey do" to be wisdom? The entire book is thin on actual practical advice. Most are motivational talk and how to customize such for your particular market (i.e. your prospects). Again, it's business porn, and it does NOT help.

Just as porn is not sex but sexual fiction designed to titillate, business porn is NOT business advice, but sales pitch designed to motivate. Porn is fine in moderate doses, but porn addiction is serious problem. Similarly, business porn is fine in moderate doses, but business porn addiction will simply depress you as you constantly choose to compare yourself to leaders, trying to ape them, without understanding WHAT made them successful (often, it's just luck) and what price did they pay (which is NOT depicted).

The book basically is all about trust, and duplication, with a few bits of sales techniques and marketing vehicles covered, but has ZERO advice on what to look for, how to spot good from bad, and how to spot legal from illegal.

The implication is very troubling: if this is the sort of book written by top network marketing professionals, network marketing is about faith and recruiting, not about sales and earning trust.

In case you want to check out the table of contents, I've excerpted the table of contents, with chapter number, chapter title, and author, along with a TL;DR summary. If you look hard enough you can find this book as a PDF, but I'm not linking to it. I have my hard copy.

1 Carpe WOO! Brian Biro

TL;DR -- WOO = Window of Opportunity

2 Bring the Right Attitude to Your Network Marketing Experience John Terhune

TL;DR -- motivate yourself

3 Nine Things More Important Than Capital for Achieving Network Marketing Success Jim Rohn

TL;DR -- Time, Desperation, Determination, Courage, Ambition, Faith, Ingenuity, Heart and Soul, and Personality (all motivational stuff)

4 Creating a Winning Strategy for Your Network Marketing Business Cliff Walker

TL;DR -- do half of SWOT analysis... without weakness and threat, i.e. identify Life Priorities, Purpose, Vision, Core Values, Core Skills, Marketplace, System, Key Interfaces, and Key Resources. All positive, no negative.

5 The Power of a Great System Mark Stevens

TL;DR -- 5 steps: establish goals, commit to goals, make prospect list, get busy, celebrate accomplishments. Half motivation, half system.

6 Behave Your Way to a Six-Figure Income Captain Dave Klaybor

TL;DR -- clone yourself in the pattern of your leader, motivation.

7 VITAL Signs of a Healthy Business Glenn and Marian Head

TL;DR -- V=Visualize I = Intent T=Training A= Action L=Live , half motivation, half system.

8 The Most Critical Skill Every Network Marketing Professional Must Possess Steve Siebold

TL;DR -- be mentally tough, control your thoughts, feelings, and attitudes. Mostly motivation.

9 Belief: Why It’s So Vital, How to Build It, Who’s Responsible Art Burleigh

TL;DR -- believe in yourself, your company, your industry, your products/services, etc. through awards, recognitions, and attitudes. Believing is key to success. Motivation.

10 The Stages to Achieving Freedom Well Earned Dan Conlon

TL;DR -- described a personal growth / business growth plan, half motivation, half practical advice.

11 You Are Only a Couple of Sentences Away from Terrific Success in Your Network Marketing \
Career Tom “Big Al” Schreiter 86

TL;DR -- you can only be successful if you TEACH your downline the sales skills... motivation is crap without skills. Practical

12 A Sense of Urgency Charles E. “Tremendous” Jones

TL;DR -- seven laws of "leadership" (mostly about motivation), plus discipline and loyalty. Mostly motivation

13 The Art of Persuasion Nido Qubein

TL;DR -- positive, prospect, prepare, perform, percept, probe, personalize, please, prove, persist. Pretty practical stuff about sales.

14 Why Won’t They Listen to Me? Kim Klaver

TL;DR -- a good list of do's and don'ts in the network marketing sales/recruitment speech. Good practical advice.

15 Finding Passion in Your Business Kathy Coover

TL;DR -- build a belief system and then try to instill the same in your recruits. Motivation and "leadership"

16 Finding Your North Star Shannon Anima

TL;DR -- list a bunch of "values" (service, integrity, respect, joy, love, etc.) people treasure, then figure how they fit into your own daily plan and overall marketing strategy

17 Values-Based Selling Linda Avery

TL;DR -- figure out what value are you providing to the prospect, and sell them that

18 Recognition: The Driving Force Brad Hager

TL;DR -- recognize people for their "achievements" and you'll get them hooked, because you make them believe in the system... and themselves (and you).

19 The Magic of Network Marketing: Building Real Residual Income Barry Friedman

TL;DR -- if you generate a "business" that pays 2500 a month without work, it's as if you have 1 million dollars in the bank earning 3% interest!

20 Creating a Steady Stream of Prospects Randy Gage

TL;DR -- direct or indirect approach? Most noobs only know the indirect approach.

21 Creating a Simple Yet Effective Method of Operation Art Jonak

TL;DR -- leverage tools and create a replicable system (DVD, internet, whatever) to showcase your operations.

22 Sponsoring a “No” Beatty Carmichael

TL;DR -- have a script when the prospect says no

23 Leadership in an All-Volunteer Army Greg Arnold

TL;DR -- leadership and motivation

24 Free, Fun, and Creative Ways to Find an Endless Flow of Hot New Prospects for Your Business Nick Hetcher

TL;DR -- where to prospect that you may not thought of

25 Prospecting and Creating High Visibility to Attract Business Builders Dr. Tony Alessandra

TL;DR -- some practical tips in spotting prospects where you didn't notice before

26 Octopus Networking: Stretch Your Tentacles and Inspire Others to Help Romanus Wolter

TL;DR -- marketing in multiple directions

27 Heating Up Your Cold Market Amy Posner

TL;DR -- spend money on advertising and such

28 The 7 Best (and Most Profitable) Internet Prospecting Tools Chris Zavadowski

TL;DR -- banner ads, autoresponder, youtube, podcast, and more...

29 The Internet Can Replace Your Warm Market Max Steingart

TL;DR -- "how to troll for recruits online"

30 Building Your Network Marketing Business with Trade Shows, Booths, and Fairs Dr. Don and
Mary Lou Vollmer

TL;DR -- practical tips in planning, location, display, and follow-up.

31 Party Your Way to the Top of Network Marketing! Jan Ruhe

TL;DR -- home party every week, half selling, half recruiting

32 How to Use Direct Mail to Promote Your Network Marketing Program Larry Chiappone

TL;DR -- post cards

33 Proper Follow-Up: The Hidden Gold Mine Jeff Mack

TL;DR -- referrals and branding

34 Visionary Leadership Mike Melia

TL;DR -- lead with a vision

35 Posture, Process, and Perspective Create Profits Scotty Kufus

TL;DR -- posture to win, process to work hard, perspective puts a good spin on things

36 What Are You Afraid Of? Overcoming Challenges,Obstacles, and Fear Ray Gebauer

TL;DR -- reframe your problems

37 The Importance of High Self-Esteem to Your Network Marketing Success Dr. Joe Rubino

TL;DR -- ignore the problems, reframe them as non-problems

↧

Related articles

Related articles

Related articles

Related articles

Related articles

Related articles

Related articles

Related articles

Related articles

Gemcoin, USFIA, and AB129

OptionsRider claiming registration with "SEC NZ" where there is no such agency

OneCoin and "Electronic Commerce Act of Bulgaria"

Conclusion

Related articles

Related articles

Related articles

海归硕士开空壳公司 以“虚拟货币”连环套诈骗数亿

Related articles

His myth #1: Pyramid structures are bad

His myth #2: MLM is a Scam

His myth #3: People are just in it for themselves

His myth #4: it doesn't work due to market saturation

His myth #5: There are ethics and relationship costs?

His myth #6: Only The People At the Top Ever Make Money

Conclusion

Related articles

How Luck Blindness Can Mislead You

How Luck Blindness Can HURT YOU

Related articles

Related articles

Related articles

Related articles

Related articles

海归硕士开空壳公司以“虚拟货币”连环套诈骗数亿