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CONTINUED COVERAGE: Interush was ALREADY declared illegal in China in 2012, fined in Taiwan in 2010!

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Emblem of Hong Kong
Emblem of Hong Kong
(Photo credit: Wikipedia)
Further research on Interush's asian ventures hit a bit of a snag as Interush apparently used multiple transliterations and thus, multiple names, which made research more difficult. However, once the proper search terms are found, all the evidence of crime started showing up on Baidu, Bing, and Google searches.

The keys are their Chinese names... one used  英达锐  (pronounced In-da-zuey) and another is 英特USH  (prnounced In-te-ush). Sometimes, the product, that "IRIS suite" is called "讯联网" which is just "comm net". 
Once these terms are located, following 4 news items popped up.

Don't Let the Comm Net Scam Catch You!  (12-DEC-2012)
http://www.jjxw.cn/2012/1212/74770.shtml

Summary: a grandma in the Jiaojiang region of China, who never touched computer before, much less take a trip, was enticed by a saleswoman to get a visa to Hong Kong to attend a 3-day class and invested thousands of RMB into this "comm net" with promises of being a net millionaire. This turned out to be illegal pyramid selling under prosecution around China. However, the money, being paid outside of mainland, is impossible to get back.

Comm Net Scam Investigation; IPO Lie Scammed Tens of Thousands  (20-AUG-2012)
http://finance.sina.com.cn/chanjing/gsnews/20120820/100512895571.shtml

Summary: Comm Net scam is an illegal pyramid selling scheme that relies on recruitment speech that claims that this will be the big chance to score Internet riches after Google, Amazon, and Baidu. Many recruiters posted ads around Southern China around Guanzhou (aka Canton). Scheme was already outlawed in Nanning, Jenzhou, and Inner Mongolia. "Subscribe" and become stock owners, then when company IPO members will earn lots of money. It is illegal, and it is against the law. Police do what they can, but due diligence is up to the citizens. Report any potential wrongdoing.



And a bit of news from just a few days ago:

Family Helped Pierce Scam Disguise (07-NOV-2013)
http://news.hexun.com/2013-11-07/159446234.html

Summary: grandpa was suddenly contacted by an old friend from high school, and the friend suddenly started talking about this company based in US, but has branch in Hong Kong, and need 50000 members in China. Members who join early can get a share of company stock, and will earn MILLIONS after IPO. Grandpa was impressed. After mentioning it to family, daughter did some internet research, and found it was declared illegal. They invited this "old friend" to visit, and she brought two more persuaders and tag teamed grandpa. Daughter showed them the article and threatened to call police if they don't leave. They basically dared her, she did call, then they left, claiming they need to get some lunch. Police came and told grandpa it's illegal pyramid selling. Grandpa was not totally convinced, thinking that it's just a small investment. Daughter had to start a family meeting where they went over every bit of report about how this "comm net" is illegal in various newspapers around China, that grandpa changed his mind... it's a scam.

and finally, blast from the past... in ENGLISH, no less.

Online Multi-level Sales Firm Fined $700000 NTD (~ $23500 USD)  (28-JAN-2010)
http://www.chinapost.com.tw/taiwan/business/2010/01/28/242599/Online-multi-level.htm
TAIPEI, Taiwan -- The Cabinet-level Fair Trade Commission (FTC) yesterday resolved to impose a fine of NT$700,000 on Interush, a firm engaged in multi-level sales of online services and ads, for violating the Fair Trade Act by deducting software use setting fee of NT$900 from payment to be returned to those members seeking to end contracts with the firm and by soliciting underage members, according to FTC officials.


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Are Latinos Defending Herbalife Making Sense?

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Rafael Fantauzzi is head of NPRC (National Puerto Rico Coalition) and recently he penned a piece for Fox Business Latino, where he basically claimed that Herbalife is merely misunderstood. You can read his piece here, as I may have misunderstood his message, but I doubt it:

http://latino.foxnews.com/latino/opinion/2013/11/04/herbalife-successful-business-model-for-latinos-or-predatory-pyramid-scheme/

Is he making any sense? My answer to that is absolutely not.

His primary praise for Herbalife is heavy involvement of the Latino community. To quote him:
Herbalife has succeeded at something that quite a few companies, and the Federal government for that manner, have failed, and that is to achieve real Hispanic inclusion. Hispanics make up at least 60 percent of Herbalife’s direct selling workforce – better known as distributors.
Okay, what's the next thing Fantauzzi said however, is a bit more controversial:
The big problem I see is that the critics of Herbalife and multi-level marketing companies are confusing business ventures with a welfare program. They assume that everyone must have equal outcomes, not just equal opportunity.
He then went on claiming that Herbalife rewards hard work, and he can't denounce a company that is the embodiment of American dream.

Does his points actually make sense though? I say no. Let me explain why.




Does the part about "heavy involvement of the Latino community" make any sense? No.

That part is simple to explain the lack of logic... If someone said "XXX is scamming the Latino community", your reply is "Really? Let me check it out."

After all, scamming the Latino community is "heavy involvement", is it not? "Heavy involvement" doesn't have to be positive.

Clearly, this is dependent on later points. So is this next point making sense?

The problem is instead of conducting his own investigation using all resources, Fantauzzi basically went and asked XXX "Are you scamming the Latino community?"  And they said, "of course not!"

Can they be TRUSTED THOUGH? Let's keep that in mind... Next point:

Does MLM / Herbalife actually REWARD people for the hard work they do, as Herbalife alleged, and Fantauzzi accepted?

Does that even make any sense when Herbalife itself states that 73% of all its distributors did NOT join to earn any profit?
The majority (73%) primarily join us to receive a wholesale price on products they and their families enjoy
cited from http://www.herbalife.com/Content/en-US/pdf/business-opportunity/statement-of-average-gross-compensation-usen.pdf  
Another question that need to be asked here is... what exactly is Herbalife rewarding the affiliates / distributors for?

According to Herbalife itself, it is rewarding distributors for THEIR OWN PURCHASE of Herbalife products and purchase by their downline distributors.
As you order products, you accumulate credit for the
amount of Volume Points that are applicable to the products
ordered. These accumulated Volume Points become your
sales production and are used for purposes of qualifications
and benefits.
Volume is credited to you in various ways depending on who
purchased the volume, their status and discount, your own
status as a Distributor and other factors of the Herbalife Sales
& Marketing Plan. 
cited from http://factsaboutherbalife.com/wp-content/uploads/2012/12/Marketing-Plan-and-Business-Rules-2012.pdf 

Please note that it says very clearly: "as you order products". Distributors are being rewarded for THEIR OWN PURCHASE of Herbalife products, as well as purchases made by their downlines (and NOT necessarily actual customers).

Furthermore, Herbalife announced in July 2013 that they are going to rename the lowest rank distributors as "customers".

Why would a company do that if it already has customers?

To summarize:

FACT: Herbalife is rewarding distributors for ordering stuff, not for SELLING stuff.
FACT: Herbalife is renaming lowest rank distributor (i.e. those who didn't sell anything) as "customers"
FACT: Herbalife admits that most of its distributors do NOT earn money (and did not intend to)

Add all these together, and what do you have?

LOGIC: Herbalife does NOT reward distributors for hard work (but for stuff ordered) because it really has no customers, and is actively creating customers through renaming.

The ENTIRE Fantauzzi editorial is a completely baseless rant NOT based on facts, but merely his PERCEPTION of Herbalife, after being lead on a PR Tour by Herbalife, of his own admission. 

Who is leading the Latino community, and who's letting down the Latino community? That is for you to decide.


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BREAKING NEWS: WCM777 settles with US State of Massachusetts for Securities Violations

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PattrickPretty.com spotted this news first. 

WCM and WCM777 have accepted an consent order with US State of Massachusetts Securities Division, that it will refund any and all residents of Massachusetts, which is believed to number about 160, almost all exclusively in the state's Brazilian community. Apparently the state has been aware of of WCM777 since at least September 2013, and backtracked violations since March 2013.

Without admitting guilt, WCM777/WCM agrees to stop marketing their illegal securities in MA, and offer to refund all participants their money. Company has 15 days to submit a report that it has contacted all participants, with proof, that it has refunded, or attempted to do so.

Actual press release by State of Massachusesetts can be read here:

http://www.sec.state.ma.us/sct/current/sctworldcapital/world-capital-markets-consent-order.pdf


Why Do Investors or Participants NOT Use Google Enough?

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Google 貼牌冰箱(Google Refrigerator)
Google 貼牌冰箱(Google Refrigerator) (Photo credit: Aray Chen)
One of the most powerful tools against fraud is Google.

Every bit of the evidence, example, illustrations, etc. presented here  of possible or alleged fraud came from simple Google research, that anybody could have done for themselves.

I freely admit that I have the advantage of being a polyglot... that is, I read multiple languages, including Chinese, Spanish, and of course, English. However, there's always Google Translate. You just have to know not to rely on them.

Fraudsters generally have a history of failures or sanctions by the law. And those histories are now online to be searched, if not by Google, then by some official records search facility offered by the government.

And very often, you just have to connect the dots.

In a case that spanned across the US, Janamjot Singh Sohdi, ran a ponzi scheme called Elite Financial Services from 2005 to 2011. He told people he can manage their money to pay handsome returns, but what he really did is to pay return to early joiners with money from the late joiners. He was finally caught in Fresno California, but not before stealing 2.4 million dollars.

Yet the warning signs had been there.

  • He went by multiple names, such as Jimmy Singh, or Jimmy Sohdi
  • His investment broker license was revoked in 2005
  • He was permanently disbarred from New York Stock Exchange in 2006
  • He was issued a "cease and desist" in California 2009 as any sort of investment advisor

Why do people not use Google? Are they afraid of what they will find? 


What about WCM777? Warning signs that been there all along.




In the case of the WCM777 possible Ponzi scheme (and for sure, illegal unregistered securities), finding history of perpetrators is a bit more complicated due to dozens of companies established by the perpetrators as shell game and obfuscation, and the Chinese language barrier, but it is still traceable.

What are the initial warning signs?

  • Multiple names: Ming Xu, Xu Ming, Phil Ming Xu, Phillip Ming Xu, Phillip Rockefeller Ming Xu, Phil Xu, Dr. Phil Ming Xu... 
  • Business model that made no sense... Who *pays* for cloud service when Amazon, Google, Microsoft, Dropbox, Box, and more give storage and service for FREE?  Why would any one get a Kingdom Card, which is a shopper loyalty card that can be used... where? No idea! 
  • You "buy units" and they'll give you return? Yet they say it's NOT an investment, but "social capital"? 
That's enough to make WCM777 a suspect Ponzi scheme. But what about Google? 


We know WCM777 headed by "Tiger" Zhi Liu, and is part of WCM.

Searching for Tiger Zhi Liu on Linked In revealed his link to "Vantone"

It's also interesting that WCM refers to itself as Wangtong Investment Bank, which is homonym to Vantone. Yet if you check for Vantone you'll find it's a penny stock (its symbol is OTCBB:VNTI, literally worth 1 penny per share, and missed reports for several periods).

Why would a company have a completely different name from English to Chinese? It's even more suspicious when "US WangTong" is the Chinese tradename of "MassMutual" financial group. That clearly indicates some sort of fraud.

Searching for "WangTong" in Chinese brought up the Vantone pyramid selling fraud in China, where it was described that the company sold crap in China for vastly inflated prices, with the bait that those who bought the crap can buy virtual stock options into the company, which will make them tons of money if the company do an IPO. The company was closed by Chinese authorities in 2012. And Tiger Zhi Liu is the US side of that fraud, with Ming Xu's help.

Searching for Ming Xu's name proved to be problematic as it often brought up the far more famous Ming Xu, the real rich guy. However, combining keywords, such as Ming Xu's Chinese name, plus Vantone's Chinese name, brought up the Olympic fraud article, dated 2007.

A further search found a "confession" possibly by Ming Xu himself, where he denied any responsibility but admits involvement.

Searching the various "institutes" shows that Ming Xu's "Dr." is possibly bogus, as its issued by a school he's the dean of and probably founded.

The hints are out there. You just need to find them. If you don't, when someone do the work for you, you can at least verify their work, instead of ignoring them.


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Why Experts Do NOT Add Credibility To A Company

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O RLY
O RLY (Photo credit: Wikipedia)
One of the most often heard excuses thrown at the MLM Skeptic is "so and so is involved. So and so is an expert and thus Acme XYZ can't possibly be a scam".

And two of the most favorite experts used for pseudo-legitimacy are lawyers (esp. MLM lawyers), and accountants, esp. auditors.

Frankly, many lawyers are so blind or so suave their testimony is completely worthless.

While I hate to bring up an old issue, it is worth pointing out that Gerald "Gerry" Nehra of Nehra and Waak, one of the more prominent MLM lawfirms, had a reputation of pointing at ponzi schemes and said "not Ponzi". He did so first with Ad Surf Daily (and testified in court to that effect), then did the same with Zeek Rewards (his and Waak's name were on the final Zeek creditor's list). Their involvement was touted highly by participants of both schemes as "proof" that the "business" can't POSSIBLY be illegal. Yet both were shut down as scams.

(And it's noted that another person who told people that both ASD and Zeek are not Ponzis... Keith Laggos, MLM consultant)

Just because lawyers said something legal doesn't make it legal.

But what about accountants?


Frankly, accountants are even LESS useful to validate a business, as the books are often "cooked".

Yet it's interesting how some accounting firm's name are waved around as badges of legitimacy. One of the most popular is Ernst & Young's "Young Entrepreneur" award, where even being named as a "finalist" is some sort of "proof" that the company can't possibly be a scam. The folks who believe this somehow believe that in order to be nominated, the company had to have been audited from head to tail by E&Y, when no such thing ever took place.

An accountant's job is not to tell you that a company is solvent, or legal, or such. An accountant's job to to help the client crunch the numbers, using the proper accounting rules and methods.

And auditor may detect some fraud, sometimes, but often that is NOT their job to find accounting fraud. The audit is to reveal any accounting MISTAKES, not deliberate fraud.

In fact, read this article by Tracy Coenen, fraud investigator and CPA, that explains why audit are NOT supposed to find accounting fraud.

http://www.sequenceinc.com/fraudfiles/2013/06/escaping-detection-why-auditors-do-not-find-fraud/
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BREAKING NEWS: WCM777 now ILLEGAL in Colombia, promoters may face arrest

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Noticieas Uno (News One) of Colombia has reported (first spotted by Oz at BehindMLM) that the Superintendency of Companies in Colombia, has outlawed WCM777 as a pyramid scheme. Promoters face arrest, and two top promoters in Colombia have been identified by name. Webpages and internet activities promoting WCM777 are being taken down with assistance of Internet ISPs.  Assets are being frozen to prevent the money leaving the country. News One have also noticed the Massachusetts shutdown order.

Here's the video report in Spanish.


And original link:
http://noticiasunolaredindependiente.com/2013/11/16/noticias/intervencion-piramide/

When full text becomes available it will be translated and linked. For now, enjoy with Google auto-translate.

BREAKING NEWS: Peruvian Legislator Warns Public About WCM777

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Given that Peru is in South America, it's no surprise that WCM777 would have reached there as well. And now that Colombia has declared WCM777 illegal, it is no surprise that Peruvian legislator has warned the public about the danger of WCM777.

Peruvian legislator Jaime Delgado has issued a public statement that warned all against WCM777, a foreign company doing illegal pyramid-selling business... just like TelexFree that came from Brazil. Their pitch basically is give them up to $2000 USD, and you can realize profit of up to 300% in a few months.

You can read the original article here in Spanish

http://peru21.pe/impresa/alertan-polemico-negocio-2158106

UPDATED 21-NOV-2013  It is now stated that Jaime Delgado has asked the Peruvian Superintendency of Securities, Peruvian Superintendency of Banking and Insurance, as well as Peruvian Attorney General, to look into this scam.

http://www.connuestroperu.com/consumidor/20/40008-advierten-sobre-negocio-piramidal-de-empresa-wcm777

There are various Twitter accounts, Facebook pages, and even a few domains registered in Peru. In fact, one of the biggest pushers of WCM777 pyramid scheme (according to Colombian government) is a pastor David Lozano, of "Ministerio La Luz". This is him on his ministry website, at the bottom, touting WCM777:




And here's a much better picture supplied by himself:


There is only one problem... This is a Photoshop (tm) job. Notice the slight "halo" around his head? This is a background that usually appears in lawyer photos. Mr. Lozano is composited onto the picture. In fact, if you zoom in, you'll see that the book spine says "PRETRIAL SUPPLEMENT", which only belongs to lawyer's libraries.

Just to illustrate the point, here's a completely unrelated lawyer in front of similar books:


I have pictures of Lozano meeting with Tiger Liu and Ming Xu, but really, two pictures are enough.

As explained before, people flying the banner of religion but are really scamming is nothing new. When one even fake one's photo to the public, it kinda makes you wonder just how real is the PERSON in the picture...

And the business they're involved with.

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More Hilarious Woo Endorsements: Having a Chiropractor as your "Chief Science Officer"

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Folks, I have no problem with you buying woo, as long as you UNDERSTAND it's woo, that any claims to benefit are merely CLAIMs, for worse, UNPROVEN claims. 

However, the marketers of woo should at least pick REPUTABLE and SCIENTIFIC people to be their advisors, to look legitimate. 

Previously, MLM Skeptic have pointed out some other woo products (a patch that claims to affect accupressure points through 'wireless communication', sea 'scum' dried and packed into pills as ULTIMATE nutrition, and a product that's based on assuming that the seller's hypothetical position paper about stem cells is true) MLM Skeptic now must add another item to the list of woo: a Chiropractor selling brain supplements as co-founder and "chief science officer". 

First, before the "haterz" (a term I borrow from my, well.. haterz)  jump all over me, I have nothing against chiropractors... other than they shouldn't pretend to know stuff they know nothing about... same as anyone else. There are special chiropractors, such as Ted Carrick, who may have invented something called Chiropractic Neurology. On the other hand, there are also chiropractors who want to be family M.D. can't get the degree, but want the job any way. 

So what's wrong with this guy? Let's start with the premise: brain supplement. I.e. nutritional supplement that helps your brain, with 14 important ingredients! What are they? They ain't telling. 

The company is called Brain Abundance, where they claimed the following:
In fact, thanks to our Co-founder Dr. Pejman Behrouzi, along with our team of top experts in the fields of neuroscience, nutrition, medical science, and product formulation Brain Fuel PLUS is the most complete supplement for your brain ever created!
On a different page Dr. Pejman Behrouzi is listed as "chief science officer" along with head of the company. 

Notice the word "neuromusculoskeletal"? That's codeword for "chiropractor". 

In fact, if you Google for his name, which is VERY unique and thus impossible to mess up, you'll see the SAME portrait:


I am finding NO published papers, NO specialty (other than chiropractic), and no media coverage of him doing ANYTHING more than just a "regular chiropractor" at his "Family Wellness Clinic" in Encinitas, CA

I've checked normal curriculum of doctor of chiropractics and frankly, if neurology is covered at all, it's as an introductory course of basic medical science, much like "human skeletal system 101". I am NOT finding ANY evidence of Dr. Behrouzi having received additional training in neurology and nutrition, or have conducted experiments, studies, or published any papers in those areas (checking PubMed revealed 18 papers by Behrouzhi, but none of them are Behrouzhi P, like our guy here.)

Thus, I find the claim in the corporate profile that Behrouzi to be "one of the most well respected authorities on the importance of brain health" to be, well... bull****. 

Maybe I can claim to be "one of the most well respected authorities on the important issue of scam busting", eh? 

Kinda makes you wonder what sort of pill this "Brain Fuel PLUS" really is... Or who would write this sort of **** and expect people to believe it. 


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BREAKING NEWS: WCM777 admits being an ILLEGAL US business, may be involved in insulting Muslims?

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Following message appeared on WCM777's Hong Kong website
...However, because the sale of securities failed to fully comply with laws and regulations in United States, our operations in the U.S. will be on hold until further notice...
This is a full out admission... almost a full week after the sanctions by US State of Massachusetts had been made public (despite the notice back in September)  that WCM777 is illegal fraud; telling people it's NOT securities when it surely is securities.

Frankly, WCM777 had admitted such back when it closed its US branch in Southern California, as previously reported, almost two MONTHS ago.

And it's also interesting that they left in September... At the same time they'd been investigated by Massachusetts.

Why leave when you don't even know the results? The obvious conclusion is WCM777 *knew* they're illegal, even before they saw the settlement with state of Massachusetts.

Shouldn't WCM777 have halted US operations back in September, instead of now? Did they just admit that they operated illegally for another 2 months? 

But there is even MORE bizarre behavior... Such as claiming to have "founded" a TV station ALREADY founded years ago... and one involved in a MAJOR religious controversy!


On Nov 19th, Ming Xu tweeted:
The problem is "The Way TV" was ALREADY founded years ago by a Christian organization called Media For Christ as a satellite TV Channel.


Media for Christ and The Way TV was involved in international controversy a year ago when it was somehow drawn into the controversial anti-Islam film "The Innocence of Muslims". Media for Christ owner Joseph Nassralla Abdelmasih, claimed that the film's producer, introduced as "Sam Bassile", a Coptic Christian from Egypt, same as Nassralla, wanted to make a movie, tentatively titled "Desert Warrior". Nassralla claimed he was kind to Bassile and let him used the facilities, and was completely betrayed.

EDIT: In the photo above, the gentleman on the left has been tentatively identified as Joseph Nassralla himself. Feel free to Google Joseph Nassralla photos for yourself and make up your own mind.

Bassile's real name is Nakoula Basseley Nakoula. The film's actors were paid by Media for Christ charity checks, and film permit pointing to Media for Christ's address. When the film was apparently redubbed and released with completely different plot due to heavy editing and brand-new dialog with the sole purpose of insulting Muslims, including Prophet Mohammed, there was a HUGE outcry around the world, with several terrorist acts and massive bloody protests committed against Western facilities in the Middle East and other Islamic territories. Nassralla claimed complete innocence, that he was duped like all the actors, and soon in 2012 after the controversy closed the TV channel and the charity.

Many believe that Nassralla is the real mastermind and "Bassille" is merely a fall guy.

Why would Ming Xu pick such an INFAMOUS name for his Christian TV Channel when he already operates "Manna TV" is uncertain. But it's clear that if Ming Xu wanted controversy, he will get it.

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BREAKING NEWS: What is TelexFree US Doing In Bed With ex-FHTM Joseph "Joe" Isaacs?

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Logo of the United States Federal Communicatio...
Logo of the United States Federal Communications Commission, used on their website and some publications since the early 2000s. (Photo credit: Wikipedia)
Recently some TelexFree fanatics, desperate to find ANY shred of legitimacy for that suspect Ponzi scheme, found that TelexFree US (not Brazil, mind you, where it's actually called Yimpactus, and has NO license to operate telecom in Brazil) has gained preliminary FCC Approval in the US (ITC2142013082200236;) as of September 2013.

For timeline, TelexFree Brazil was shut down in June 2013 by court injunction, and has been in a limbo since. Its lawyers launched appeal after appeal to no avail, while telling affiliates that they should register with TelexFree US and get paid by TelexFree US.

It is also interesting to note the timeframe... late July is when Gerald "I see no Ponzi" Nehra said TelexFree is legal in the US, at a TelexFree event in Newport Beach, California. Presumably, that's when they started applying for the FCC license, not that there's any proof that TelexFree actually OWNS any "telecom facilities", as specified in the FCC license it had obtained. They went through "streamlined" FCC approval process where the public was given a few weeks to comment, and voila: "authority granted".

Can you BUY any TelexFree service and use it? Good question. I haven't found ANYONE that claimed to done so that is believable.

What's surprising the the other name that appeared on TelexFree's FCC license... Joe "I love then hate FHTM" Isaacs.



English: Fortune Hi-Tech Marketing, Inc. (FHTM...
English: Fortune Hi-Tech Marketing, Inc. (FHTM) Logo (Photo credit: Wikipedia)
Joe Isaacs has a long history in MLM, though he apparently made some money with FHTM, i.e. Fortune High Tech Marketing. He created an online hub called Fortune Social and tried to create a FHTM affiliate community, as well as sell them online sales tools. Apparently FHTM objected and served him a cease and desist notice. Thus started a long battle where Joe Isaacs became the "whistleblower" against the "abuses" of FHTM. He even self-published a book called Scapegoat. When FHTM was finally closed by FTC as a pyramid scheme in early 2013, he tried to portrayed himself as a hero who helped along FHTM's demise.   As this is not about FHTM, you are welcome to Google "FHTM + Joe Isaacs" and you'll find PLENTY of material on these times (much of them written by Joe Isaacs himself under various aliases)

What's interesting is Joe Isaacs apparently opened a consulting business called ISG Telecom Consultants in Florida, the same address he had previously used by Fortune Social and such, where he helps anybody with enough money to become a telecom company. You just need to know what papers to file with whom, basically, which is what a consultant does. And he has helped several telecom companies get off the ground...

And one of them is TelexFree... the suspect scam in Brazil, that doesn't really exist in the US (or UK), as proven before when their offices are... well, virtual.

Is this irony? Fate? Or God playing a cruel joke on everybody?

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Woo Most Bizarre: Fake "Device" Sold by Now Transvestite Singer Fugitive

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It is quite often that the MLM Skeptic encountered woo, but this one is far more bizarre than most. In fact, this may be the most bizarre woo that I have ever encountered (even including "cans of air certified to do nothing" and "fuel additive that violates laws of thermodynamics")

This woo is called QXCI, but it is also known as EPFX, or even SCIO. What the letters stand for is not important (it'll be listed at the end).

It roughly looks like this (laptop not included):

QXCI (everything except the laptop), picture courtesy of
http://www.badscience.net/2008/08/bill-nelson-wins-the-internet/
The important part is they are just random jumble of buzzwords. It's a machine that claims to be woo for all seasons... it is  (I am quoting from a website pushing such)
"... is an incredibly acurate (sic) biofeedback stress reduction system, combining the best of biofeedback, stress reduction, Rife machines, homeopathic medicine, bioresonance, electro-acupuncture, computer technology and quantum physics”.
And the operating principle of this device is based on...
"the following modalities: naturopathy, homeopathy, acupuncture, chiropractic, energetic medicine, psychology, aromatherapy, reflexology, colour therapy, Neuro- Linguistic Programming, biofeedback and Rife Resonator. It also incorporates knowledge of metaphysical subjects to bring a unique synergistic perspective to natural healing."
In other words, this is every quack woo lover naturopath dream machine!

But you'd never guess who invented this... and what happened to him...




The device was apparently invented by a "Bill Nelson". A former math teacher in Colorado, Nelson claimed to have invented this device (apparently out of nowhere) that will diagnose and eradicate disease (of every sort, from allergies to cancer, according to Seattle Times) with radio waves. He claimed to have 8 doctorates, according to his own resume, but they come from unaccredited buy-a-worthless-degree mail-order diploma mills. He also claimed to have worked at NASA during Apollo 13 and was a backup gymnast for the 1968 Olympics, except there was no record of him at either place.

He created the machine and registered it in 1989 with the FDA as stress-relieving tool / biofeedback. By law, he's not allowed to claim any more than that, but he did so any way.  However, he also claimed to have been nominated for a Noble Prize (yes, that's how he had spelled it)

In 1992, FDA caught up with him, ordering him to stop giving bogus promises, and issued a recall of the machines. Nelson is not deterred, and continued to make bogus claims.

Nelson fled the US for Hungary in 1996 when FDA brought 9 cases of felony fraud against him. Leaving behind two ex-wives and two kids, who apparently knew of his little "condition" which we will explain later.

Bill Nelson now operates his outfit, called Eclosion KFT, from Budapest, Hungary. And for a few years, he actually got FDA registration for his machine when in 1997 the new laws made for "streamlined" approval of new devices. However, when his ruse was discovered,  his device has been BANNED by the US FDA along with a long list of bogus devices all over the world.

Yet with hefty commission promised to adopters, he has signed up a network of alternative medicine providers, chiropractors, even a a few physicians, into buying these devices to look high-tech and charge higher prices, and two of these people managed to get these devices into a real US hospital, without disclosing they were commissioned "dealers" of such devices.

Suckers patients pay $40-150 an hour to be hooked up to a machine that does NOTHING. And several patients are KNOWN to have died, having trusted this woo instead of REAL medicine, according to the Seattle Times report above.  And this machine costs the "treaters" (naturopathic "doctors", chiropractors, spa owners, and "alternative" medicine providers) up to 12000 dollars, and the costs keep going up. The "latest" version as of 2007 costs 20000 USD.

At least one engineer have examined the source code of the machine and found it to be "apparently generating results randomly". It's no more than a TV prop, sold as the real McCoy.

And apparently this is being sold to Africa as real treatment for something... Anything.

Let's just say that even some chiropractors found this bogosity to be WTF. Oregon Board of Chiropractic Examiners banned the device to be used by ANY chiropractors in the state.

But you haven't heard much about Bill Nelson yet...

Mr. Nelson apparently has an ego the size of Manhattan. He has apparently made several movies featuring himself, narrated by himself, where he's the hero fighting against the FDA and evil agents (implied to be working for "Big Pharma") but you won't ever guess what's his stage persona...

This is what William "Bill" Nelson used to look like:

William "Bill" Nelson, via http://rationalwiki.org/wiki/File:William_Nelson.jpg
You'd have NEVER guess that this is also him:


Yep, our Dr. Nelson is also known in Hungary as Desire Dubonet, as of 2002, and is LGBT spokesperson and transvestite. It was rumored that when he emigrated to Hungary he wrote on his paper that he's hermaphrodite... that despite his male appearance he also has ovaries inside. No idea if that's true or not. However, his current Hungarian wife has apparently accepted his feminine side which looks like this:


If you check on Youtube, you'll see that Ms. Dubonet has several 'music video's with not too bad production values.

And apparently s/he is STILL making those darn devices for sale, which has been revealed all around the world as fraud, even in Hong Kong (link in Chinese) and Canada CBC Interview

Thanks to Richard Harriman of Consumer Watch for the tip on this story.

QXCI = quantum Xrroid Consciousness Interface
EPFX = Electro Physiological Feedback Xrroid
SCIO = Scientific Consciousness Interface Operation

I told you it's gibberish.
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MLM Mythbusting: No, Network Marketing is NOT Among the Best Paid Careers

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SUCCESS (magazine)
Did Success magazine ever said that network marketing is among the best paid careers of the world?
(Photo credit: Wikipedia)
Recently I ran into someone claiming that "network marketing is the best paid profession in the world". Yes, that's the exact quote.

I find that quote... idiotic, as it lit off all my skeptic sense alarms. :)

First, that makes no sense, as UN doesn't keep stats on best paid professions, yet UN is like the only agency that could have tallied "in the world" stats.

Second, no such quote can be found on Google. What Google said, is that some websites claimed that Success Magazine wrote once that "Network marketing is among the the best paid professions in the world."

Well, that's busted already, but how true is that "revised" quote? Is network marketing among the best paid professions in the world? Did Success Magazine ever published this quote?

I CANNOT find such a quote on the Success magazine website. I tried using search for "network marketing best paid" and got a bunch of articles, NONE of which contained the sentence that is even CLOSE to "network marketing is among the best paid professions in the world." I tried searching just for "best paid" (in quotes) and got NOTHING. It is likely that the quote did NOT come from Success magazine.

(To the doubters... find me the article. Magazine scan will do, or PDF reprint, or such official statements, and I'll clearly issue an update.)

But where did the quote come from?



I kept searching on Google, and found another website where they claimed that Bureau of Labor Statistics published something that shows network marketer is like #3 on the list of all professions. Here's a screenshot:


Except there is no such statistics published. Here's a link to BLS website so you can see for yourself:


In fact, not any sort of marketing (except marketing manager) is among the top 20.

Apparently someone decided to random replace two of the medical careers with affiliate marketing, and network marketing to make a FAKE ARTICLE to prove their point.

Some sheeple never thought to question the crap sandwich they've been fed, and started regurgitating the same crap.

And now you got crap over everything. Even a well-known magazine got involved.

And you wonder why people avoid MLM like the plague... it's because of this sort of sheeple behavior (and the willingness of some uplines to bent the truth to get a few more recruits)

Stay tuned as we'll check in the near future... Is the statement "MLM has produced more millionaires than any other industry" fact or myth?
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HAPPY THANKSGIVING, and a message from MLM Skeptic

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Today is Thanksgiving Day in the US, where we are supposed to give thanks to the world and each other about having made it another year.

So here's best wishes to you, the reader, with a bit of help from a South Park meme... (look up "Craig")

"If I could get some real customers
instead of just friends and family needing
favors... I would be so happy." 
If you are in MLM, may you find real customers (who are NOT affiliates like yourself) and make a profit the way it's meant to be made.

If you are a victim of scams, may you find relief soon... and the wisdom to not fall for a reload scam or any other types of scams.

If you're neither, you get the generic "Happy Holidays" wishes. :D


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BREAKING NEWS: Payza funds in US frozen by Department of Homeland Security

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U.S. Department of Homeland Security Official ...
U.S. Department of Homeland Security Official Signature Websafe Colors (Photo credit: Wikipedia)
According to Ultralight Financial Services (ultralightfs.com), aka Obopay's homepage, funds that originally belonged to Payza (i.e. MH Pillars, who bought out AlertPay earlier) was frozen by Department of Homeland Security.

Those who play in HYIP or suspect Ponzi scheme circles should be familiar with Payza, because Payza doesn't have the restrictions of Paypal (no HYIP, no get rich quick schemes, etc.). With closing of Liberty Reserve earlier (and guilty plea by one of the co-owners not long ago) Payza had inherited the "Dark Paypal" moniker from Liberty Reserve.

Several suspect Ponzi schemes (they call themselves "income systems" or "rev share systems" or such) are definitely using Payza. Though some European firms prefer the Russian version.

However, Payza does not have license to transmit money in the US, so it has an exchange agreement with Obopay (i.e. Ultralight Financial Services) which has such license.

And now Payza US funds are frozen. Not seized, mind you, merely frozen. ALL OF IT, millions of dollars.

This apparently was noticed days ago, when Payza started notifying their US customers that they cannot get through to Obopay to pay people in the US, and they will have to start legal action against Obopay.

Then suddenly the notice on Obopay's home website appeared... Assets frozen.

It's suddenly very clear that Obopay was under a gag order... They are NOT to reveal what's going on with Payza's account... Until they are allowed to say so... and it's clear that DHS now has a full record of who got / sent how much Payza money via Obopay to / from whom.

While no reason was given by Obopay, one can easily surmise the reason had everything to do with money laundering... the same reason Liberty Reserve was shut down.

And speculations are running wild.



It is clear that Department of Homeland Security, Federal Reserve Bank, FBI Financial Task Force, US Secret Service, and SEC Enforcement Branch, (together known as FinCEN) have eyes on the "virtual currency" and "money exchangers" for some time. The case against Liberty Reserve in Costa Rica wasn't built overnight. They had people in Costa Rica telling the local authorities who to grab and all that.

Add that to closing of Silk Road, and it's a severe blow to the "dark economy" and "dark market" that relied on "no questions" money transfers, something smugglers and traffickers and other criminals love, but authorities hate. 

With no more Liberty Reserve, Payza is simply the next in line, along with a Russian equivalent. (STP is based on Canada) for people who want to move money across borders quickly. That would include ordinary people... AND criminals. 

Are money exchangers doomed? Not at all. They simply need to 1) keep better records, and 2) stop dealing with shady people... just like regular banks. 

So in a sense, yes, they are. 

And people who play with Ponzi schemes (such as HYIPs and more) are doomed. You know who you are... 

Those still thinking of playing with fire (i.e. huckster schemes) may want to read this PDF, obtained by Wired Magazine on how US authorities are reacting to the Dark Economy.

http://www.scribd.com/doc/184579094/Virtual-Currency-Response-LettersFederal-Agencies-Respond-to-Homeland-Security-Committee-Questions-on-Digital-Currencies


Thanks for Oz at BehindMLM for first report.
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MLM Mythbusting: No, MLM Did NOT Create the most millionaires of any modern industry

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Recently, I can across yet ANOTHER MLM wild claim  from a MLM supporter

He claimed that "MLM has produced more millionaires than any other industry".

I asked him does he have any proof, and he never got back to me.

Time to call in the MLM Mythbusters!  Is the claim "MLM has produced more millionaires than any other industry" true or false?

The story is quite fascinating, as it demonstrates some of the worst aspects of MLM... blind repetition of claims with no verification.

First, there is NO PROOF of this claim in ANY popular fact-checking sources, or any reputable news source.

The sole source that can be verified was that it was ALLEGEDLY stated by "Les Brown", pretty famous motivational speaker. It was cited by multiple MLM fan sources, but nobody can give a specific date, time, or speech that he allegedly said that, nor was his source of that claim given.

A secondary source is Paul Zane Pilzer, an economist who likes to play entrepreneur and encourage the wellness industry, which jibes with a lot of MLM pushing "nutritional supplements". Pilzer claimed that the wellness industry, and network marketing will be the two largest growth markets in the US in the coming decades. However, he didn't say it already produced millionaires.

THERE IS NO PROOF that MLM / Network Marketing has produced the most millionaires in modern times (say, since MLM got started with Amway in late 1970's) other than ONE man's word, with no evidence and no source.

But it's repeated by all the MLM fan sites, with NO fact-checking.

So which industry did produce the millionaires, if not network marketing?


According to a study conducted by Fidelity Investments (I know, bias!)  in 2012...
Of those who are self-made millionaires, the study revealed their top sources of assets included investments/capital appreciation, compensation and employee stock options/profit-sharing. Those who were born wealthy were more likely to cite inheritance, entrepreneurship and real estate investment appreciation as an asset source. -- Business News Daily 
No mention of network marketing there. When you think about it, this makes sense. Most people who got rich are from stock splits when a tech giant goes IPO.

Can we extrapolate from billionaires? According to Forbes, here's a breakdown of the billionaires in the US:


No network marketing here either! Unless you insist Forbes classified the companies wrong.

According to a UK study, engineering degree is what produces the most millionaires, followed closely by MBA and finance degrees

The consensus among the three is "tech". THAT industry is what will produce the most millionaires (and billionaires) in the past few decades AND the coming decades.

Where does that leave you? A load of bull****.

Now for the fun part... WHERE did this lie come from? Turns out this is merely a mutated version of an old Amway lie.

On Amquix website, they explained that this was originally stated as "Amway Produces More Millionaires than any other types of business".

Best guesstimates is Amway may have produced a few thousand millionaires (it's probably closer to 1000)

Given that there are THREE AND A HALF MILLION millionaires in the US, according to the authors of "Millionaire Next Door"...

Amway's nowhere near the top. it'd be near the bottom of the list.  And even if you expand that to the entire MLM industry it STILL can't be true, unless you play games and try to count separate types of medical career as separate while counting network marketing as one glob.

VERDICT: BUSTED

P.S. Allegedly the DSA ex-president Neil Offen once said "...But don't believe anyone telling you that most new millionaires are coming out of network marketing. That's an absurdity" This quote cannot be verified.


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Network Marketing? Or Cargo Cult Marketing?

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Ever heard of Cargo Cults? No? It's a cult (alternative religion) that evolved during WW2 in Malenesia (little Pacific Islands) where the natives evolved a religion based on airplanes dropping huge amounts of cargo out of the sky and if they pray and march and wear the right uniforms and build "runways" or "fake airplanes" the great plane will come and give them more cargo. And yes, they're still around.

Cargo Cult of the Pacific, via http://www.rusticaobsessa.com/?p=257
Those of us who know a little history would realize that those were WW2 supply missions where transport planes drop supplies for our troops that probably went off course for one reason or another.

Cargo cults existed for 50 years and no great planes have appeared since WW2. Yet it persists. Why? Because they *wanted* to believe, even though it doesn't work and hadn't worked for 50 years. They keep doing the same thing.

Richard Feynman coined the term "Cargo Cult Science", where people are doing apparently scientific research, studies, theories, etc. trying to explain some problems and propose solutions, except they have tried for decades, and nothing has worked. He was referring to criminal science (how to reform criminals) and pseudo-science such as ESP. Things have NOT improved for those fields. It's gotten WORSE.

Network Marketing is the same way. It is really "cargo cult marketing" because in most cases most network marketers only know how to indoctrinate as many people as possible and hope they make you rich. All the junior reps are recruited through "edification" of the top reps, and was given the message: monkey see, monkey do. (i.e. you can be me if you do what I do) even though there is no proof that doing what they did is the key to success.

Only a few PROFESSIONALS realize the truth and try to do it the right way. VAST MAJORITY of people are doing it wrong, and they are either ignorant... or simply don't care. They see their own success as "proof" of their own brilliance, not realizing they are simply lucky... or good at OTHER things... such as recruiting or cult indoctrination.

And that's exactly what a cargo cult does. They do what their "ancestors" did even though there is no proof and no reason it would work.

But there's more... the CULT aspects.


Network Marketing had ALWAYS been plagued by MANY deep-seated problems, two of the most problematic was lack of profit by the affiliates, and cult-ish behavior.

Study of most network marketing companies' income disclosure statement shows that well over 90% of all participants make less than US Median Personal Income on commissions paid by the company. While there can be some "retail profit", there is no proof of such, and network marketing does NOT require proof of retail, merely the INTENT of such. And that's before we counted any expenses.

I have yet to see ONE company that can prove it has profited MOST of its participants... except true direct selling companies (not multi-level). Indeed, such income disclosure statements seem to suggest that vast majority of participants LOSE money in network marketing, not earn it. And this has been the case since the advent of Amway, up to today's big-name MLMs such as Vemma, Herbalife, and so on.

Then there's the cult-ish behavior, leading to a new term called "cult sales". Amway had been long accused of cultish behavior when a lot of local Amway Support Organizations turned into cult of personality, that use cult tactics to keep members keep buying products they don't use, sales aid they don't need, and so on and so forth. It took Amway a decade to rid itself of that image, and even then it's often resurrected in investigative reports.

Yet modern MLMs such as Vemma and Herbalife often have VERY similar tactics. One such cult was documented in Israel operating on Herbalife, while there were many reports of cult-ish behavior by Vemma members, leaving their family and partner behind in their chase of success and so on.

Yet you see new MLMs started every day, using the same tactics: same multi-level comp plan (with minor variations, like matrix, unilevel, jump over, X-up, blah blah blah), using the same cult language (avoid the dream stealer, you just don't understand us, this will revolutionize _____...).

Then there's this story about Mary Kay's indoctrination. Apparently Mary Kay *hates* woman wearing pants, so all the top reps only wears dresses or skirts. And they try to indoctrinate all the junior reps to NEVER show up at MK meetings wearing pants (heh?) 

The truth is Network Marketing have been doing the same thing for 40 years and it hadn't worked as well as they expected.

The Franchise system, which started at about the same time as Network Marketing, with big names like McDonalds, Burger King, KFC... etc., with its MUCH HIGHER barrier of entry (as most franchises cost much more than Network Marketing) is 33 times LARGER than network marketing, according to one MLM veteran.

Instead of improving the system, they have improved the cult indoctrination.

That's why it's more "cargo cult marketing" instead of "network marketing".

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Kevin Trudeau Will Face Jail for Lying on TV... AND Stiffing the Court of Penalties

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English: This is my personal photo that I took...
Kevin Trudeau
 (Photo credit: Wikipedia)
Kevin Trudeau is a master salesman. Unfortunately, his early exposure to MLM seem to have lead him down a dark path, and he became a scammer instead. And now he's really going to pay the price... in jail. Following is a short history of Kevin Trudeau.

----------

Kevin Trudeau apparently was a real go-getter even when he was young. He was voted "most likely to succeed" by his high school graduating class. However, he refused to go to college. He claimed he went to an Amway meeting at 15 and have wanted to be financially free ever since. He claim to have started a mail order company before he was 18. However, after high school he tried selling cars for a while, found it boring, then went on the seminar circuit, peddling one thing after another, like "super memory!" around the nation. Apparently that was not challenging or lucrative enough, as he went into fraud.

Apparently around 1990 he impersonated a doctor when meeting with bank officials to open accounts, then wrote 80000 worth of bad checks. He apparently also fraudulently obtained 11 credit cards (identify theft) and spent them. For the first crime he spent maybe a month in jail as the judge gave him a soft sentence for first time offender. A year later, when he got caught for the credit card fraud, he spent almost two years in a Federal prison.

When interviewed by Washington Post in 2005, Trudeau blamed "math error" and "overzealous bank officials" for his rap sheet. For the fraudulent credit cards, he said he was unfairly penalized for paying late one time his AMEX card which resulting in him not being able to get any card, and he had no choice but to apply with fake social security numbers.

He just cannot admit that he did anything wrong. Such narcissistic behavior is indicative of sociopathic personalities.

The prison stay did not stop his criminal behavior at all. It only make him even MORE determined to make his money... through any means possible. He also met up with a guy named Jules Leib (to whom he gave a Tony Robbins self-help book while in prison), and when they got out, they teamed up to make money... through MLM.



After his stint in a Federal prison Trudeau joined a MLM called "Nutrition For Life" in early 1990's. He also made a bunch of infomercials with Leib and played them on late night TV, selling stuff like baldness treatments (hair transplant at home?!), 60 second cure for any addiction using quantum mechanics (?!), and so on. They may also be cross-selling people to join as their downlines in Nutrition For Life as well as their other products.

The former head of Nutrition for Life, David Bertrand, remembers Trudeau quite well. Kevin Trudeau apparently TRIPLED sales... because Trudeau will go above and beyond what's legally permitted, repeatedly, making promises he can't keep. He's like the guy who tells those "fish stories"... And the fish got bigger and bigger. Bertrand recalled once that Trudeau promised free trips to prospective new members, and since there was no trips, people started complaining, and Bertrand had to charter a cruise ship for a weekend (that's thousands of people) to quell the complaints.

In 1996 State of Illinois sued Trudeau and Leib for operating a pyramid scheme using Nutrition for Life as cover. Trudeau and Leib split up, but not after settling with 7 different states and paid fines and promise to reform their sales tactics.  Later a class action suit against Nutrition for Life all but ended the company.

Trudeau's troubles are just starting though. In 1998, Federal Trade Commission, who oversees advertising (and thus, false advertising), went after Trudeau for bogus promises in those infomercials. Trudeau promised to pay 500000 in fines and stop making bogus promises. Unfortunately, Trudeau had problems keeping his mouth shut. By this time, he seem to have came to the conclusion that the government is somehow persecuting him.

In 2003, FTC went after Trudeau again, after learning that he really went too far into woo territory. Trudeau was pitching something "coral calcium" and claimed it not only cured cancer, he had a "guest" who claimed that people who had a ton of calcium in their diet are so healthy they can sire kids in their 70's. FTC got Trudeau fined an unprecedented TWO MILLION dollars (part of which was by confiscating his 180000 Mercedes and a couple mansions) as well as a TOTAL BAN of Trudeau making any more infomercials about products.

But that wouldn't stop Trudeau, who then decided to f*** FTC by writing books instead. As books are protected by Freedom of Speech, FTC technically has no oversight over it.

Trudeau published his first book, in 2005, "Natural Cures They Don't Want You To Know". It is best known for having included NO NATURAL CURES, despite the title. When questioned, Trudeau claimed that it's due to FTC threats. He then went on making various infomercials promoting the book itself and its contents. He also claimed that FDA and FTC, along with some unnamed "big pharma", are out to silence him. The book contained various references to Trudeau's website or newsletter which costs extra subscription for more content, at several times the cost of the book. Health professionals found the book to be at best, speculative, and at worst, outright fraudulent.

Trudeau also tried proactive litigation, trying to sue FTC for a press release about the 2004 settlement against him. The suit was dismissed. Trudeau also sued New York Consumer Protection Board when it sent letter to TV stations urging them to stop showing Trudeau's infomercials as they were misleading.

Trudeau followed up with several books, including another "cures" book, a "weight loss" book, and a "debt cure" book. It is this weight loss book that got him back into sight of FTC in 2007.

In 2007, FTC hauled Trudeau back to court after noticing that the weight loss book was very different from what Trudeau promised in the matching infomercial. While FTC had no jurisdiction over the book, it certainly has jurisdiction over what Trudeau had said that's untrue, over the airwaves. Trudeau claimed in the infomercial that his weight loss plan is easy, can be done at home, and participants can eat anything they want. The reality is the plan is a 500 calorie per day EXTREME diet, involving an injection that is only available through a doctor's prescription, and lifelong calorie restrictions. Basically, Trudeau lied on TV. Two months after the FTC lawsuit, Trudeau was pronounced guilty of contempt of his 2004 consent order. Trudeau was ordered to pay a record 5 million dollar fine (estimated profit from the bogus weight loss book) and banned from many ANY infomercials for 3 years.

A year later (2008), the judge upped his fine to 37 million dollars when it was discovered that Trudeau had only reported the book sales, not the sales associated with the infomercials themselves.

Trudeau appealed the ruling in 2009, but the 37 million fine was eventually reaffirmed in 2011.

Around 2011 or 2012 Kevin Trudeau also emerged as a spokesperson for "Global Information Network", which claims to have members of all the conspiracy organizations such as "Bilderberg Group", "Illuminati", "Freemason", "Trilateral Commission", and so on, and they are going to help everybody who join (by paying them big bucks) with some exclusive business deals. Incorporated offshore, there is little information about GIN other than its shady nature and impossible-to-verify claims.

In Early 2013, Trudeau filed Chapter 7 bankruptcy to avoid paying his 37 million dollar fine. Trudeau had basically been very uncooperative to government attempting to collect on that huge 37 million fine he owed. He continued his extravagant lifestyle of Brioni suits, silk monogrammed shirts, perfectly matching ties and hankies, Italian shoes, and mansions even though he's supposed to be living on a bare minimum necessities, with all other income going to the fines.

In June 2013, the court had finally had enough. It ordered him to appear before the court for criminal contempt. In November, a Federal jury convicted him of criminal contempt in merely 45 minutes, and he'll be jailed immediately until sentencing which is scheduled for February 2014.  His lawyer allegedly tried to argue to the jury that a TV advertisement can represent only an opinion that is outright false. It obviously did not work.

At least for now, Trudeau is silent, but not by choice.

--------

The following sources were used to compile the aforementioned short bio of Kevin Trudeau

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/22/AR2005102201272.html
http://en.wikipedia.org/wiki/Kevin_Trudeau
https://www.truthinadvertising.org/jury-convicts-trudeau-contempt-misleading-infomercials/
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Paul Orberson dead at 57, best known for his pyramid scheme FHTM

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English: Paul Orberson speaking at a convention.
English: Paul Orberson speaking at a convention. (Photo credit: Wikipedia)
Paul Orberson, controversial head of Fortune High Tech Marketing (FHTM), is dead at age of 57 from his kidney cancer, diagnosed in 2003, as reported by the Kentuckian.

Orberson start out humbly and went to college on a baseball scholarship, before eventually returning to his hometown as a high school basketball coach. During that time, he started doing Excel Communications that sell long distance phone service through MLM. He claimed that after doing Excel for 4 years he made a million dollars and retired to Florida in 1996. but boredom drove him to start a new company in 2001... Fortune High Tech Marketing. He signed up a couple famous companies such as Cingular (now AT&T Wireless) and GE Security in order to offer their products, and 12 people paid $299 to join. A month later, sales force grew to 1200 (each of whom paid $299). From there the company grew very quickly across the US, Canada, and UK.

In 2003, Orberson was diagnosed with kidney cancer but apparently forced it into remission.

Over the years, FHTM was charged by several states such as Texas, Montana, and North Carolina as pyramid schemes, and settled with each with fines and promises to reform certain practices.

English: Fortune Hi-Tech Marketing, Inc. (FHTM...
English: Fortune Hi-Tech Marketing, Inc. (FHTM) Logo (Photo credit: Wikipedia)
That came to an abrupt end in January 2013 when the Federal Trade Commission, along with multiple states, including his home state of Kentucky, brought suit and killed the company as a pyramid scheme. Later audits revealed that while Orberson and his top lieutenants shared over 40 million in profits average ANNUAL commission of a typical FHTM affiliate is about 1000 dollars (not counting expenses).



The Federal case against FHTM is still pending where FHTM reps are still in settlement talks with the FTC lawyers. Next court report is due on December 10th, 2013. Is it not known at this time if Orberson's death will affect the settlement talk.

Orberson was rather fondly remembered in Kentucky, being a generous man who donated to various causes in the state. He is survived by wife and 2 sons.

http://www.kentucky.com/2013/12/05/2971591/paul-orberson-ex-coach-who-made.html

Orberson was well known for blaming everybody else for FHTM's problems. When interviewed for various problems in Texas in previous years, he blamed "overzealous reps". Various "misunderstanding" by officials was also implied but not stated. You can find such news reports online.

The class action lawsuit against FHTM is still pending.

FHTM also brought us "Joe Isaacs", whose adventures can fill a book... and there was such as book... written by Joe Isaacs. A former FHTM affiliate, he created some Internet tools and forums for FHTM affiliates, only to see FHTM squash it with trademark infringement suit, which he lost, and he transformed himself into a self-proclaimed anti-FHTM crusader and tried to claim credit to FHTM's demise. Last time we heard about Joe Isaacs, he just helped suspect ponzi scheme TelexFree obtain a telecom license in the US.


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Is Robert "Rich Dad" Kiyosaki in a Faustian Bargain with Network Marketing?

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Robert Kiyosaki Flipping Off the Haters
Robert Kiyosaki Flipping Off the Haters
(Photo credit: i am real estate photographer)
Before 2000, NOBODY knew who Robert T. Kiyosaki is, other than a few seminar attendees, desperate for some advice to get rich.

Then in 2000, the book "Rich Dad Poor Dad" was published by Warner Business Books, and that thing just TOOK OFF like a rocket, resulting in a series of books that are just one rehash after another, filled with "pithy" sayings that may or may not apply, anecdotes that were presented as "these are the true stories of my two fathers"... but later admitted to be a myth, a fiction.

But what is the real secret behind the success of Robert T. Kiyosaki and his book "Rich Dad Poor Dad"?

A implicit bargain with an industry desperate for legitimacy... the "network marketing" industry.

Is it a Faustian bargain?  Does Kiyosaki care, or he just view everybody who asks as "haters"? As he can't make a mistake?


Who made Kiyosaki the man he is today? It's not "Rich Dad". It's all the MLMers desperate to believe that they are making a valid choice for income.
“...Rich Dad, Poor Dad was originally self-published in 1997. As Kiyosaki worked the seminar circuit, he sold enough books to get the attention of Warner Business Books, a major publisher with better distribution.”  -- Slate Magazine, 2002
In other words, Kiyosaki's seminars pushed the books to income opportunity seekers who’s looking ot get rich by attending such seminars. And it took him THREE YEARS. (Current edition was first published in 2000)  By then, network marketing have been around for TWO DECADES (Amway started in late 1970's). And they are STILL barely accepted in society.

Most of those income opportunity seekers are looking for income opportunities, not merely advice, and like all such "sagely advice", most people will read the parts they *want* to read and ignore the rest, esp. when the reasoning behind the advice was not fully understood.

With crap advice like "go big or go broke", and "own the system" Kiyosaki told the hesitant to jump in with both feet, instead of analyzing the strengths and weaknesses of each model of business, such as traditional retail, work, consulting, franchising, direct sales, network marketing, and so on, it's just "you can't win if you don't play".

Kiyosaki basically peddled that book hard enough and found a willing audience for his crap advice to reach critical mass and gone viral. And things that gone viral is just bandwagon fallacy. I have read most of Kiyosaki's books, and found them to contain merely generic advice that doesn't stand up to close scrutiny.

Yet you will see many network marketers almost worshiping Kiyosaki as God, pay thousands for his seminars, and walked away full of dreams and empty wallets. Practically all network marketing companies that are recruit-heavy (i.e. suspect pyramid selling schemes) would include Kiyosaki in their reading lists.

You know who else peddled books containing bogus advice? Kevin Trudeau, who just went to jail for criminal contempt of court, promising things to Federal court, then breaking that promise.

But back to Kiyosaki... and MLM. His latest books, Business for 21st Century, is an all-out endorsement for network marketing. Though he had made plenty of videos before, claiming that people in network marketing, belongs in the B quadrant, i.e. business owners. instead of E (employee) or S (self-employed).

Is that really true though? The idea of a "business owner" is if you have the right leadership in place, you can walk away and the business will continue to run itself, and make you money, according to Kiyosaki's own Cashflow Quadrant book. Like, say, if you own a grocery store or gas station and hired workers there to run the business.

Is network marketing such a business, the answer is NO, not if you are following the Amway safeguard rules!

Number one on Amway Safeguard rules is known as the "10 retail customer rule"... i.e. you need to sell to ten different retail customers every month. Not your downline, YOU. If you don't sell to ten customers yourself, you should not qualify for any commission.

There's also the "qualification"... That you need to make X amount of sales before you qualify for all that commission from your downline. Most companies fudge / ignore the Omnitrition ruling that requires the sales to be true retail (i.e. to ultimate consumer that is NOT a part of the comp plan), but that's a secondary issue... in that you can "fake" the sales by buying the stuff and dump it in a garage somewhere.

So it's clear you cannot step back and let the "business" run itself. While you can generate significant income relying on other people's labor, you cannot go full hands-off.

NM is clearly NOT the "B" he was talking about.

Which means Kiyosaki had been giving crap advice for a whole decade now. And he's just about to hit 15 year anniversay of bad advice... by riding the coat tails of an industry that has had legitimacy problems from the very beginning (getting sued by FTC and was only allowed to live by instituting some major reforms).

Quid pro quo. You scratch my back, and I'll scratch yours.

In my opinion, it's a Faustian bargain... for both sides.

And neither side will ever admit their "mistake". They'll simply chalk up any criticism to "haters".
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Just what *are* your odds in Herbalife? (With bonus Kiyosaki debunking)

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Apparently some Herbalife distributors were spreading this on Facebook

(following picture courtesy of SaltyDroid)


Notice the graph says "Rich Kid Smart Kid?" We'll get back to that.

Let's assume that the odds are accurate... for the Herbalife portion... But there's something SERIOUSLY not mentioned in the odds... That the odds are NOT evenly distributed, like you'd been lead to assume.

That's right... Some people have far better odds in Herbalife than the average distributor.

The relatives of those already in "President's Club" have much better odds. It's an insider's game, not "equal opportunity" like you'd been lead to believe.




Ever heard of John Tartol? If you are in Herbalife, you should. He's one of those top reps in "Chairman's Club", and have been in Herbalife for 30+ years. He's even on Herbalife's board of directors.

Care to guess how many of his relatives are nearly as high as he is. i.e. President's Team, and so on?

TWELVE of them.

His son Zack
His sister Mary
Her son Jake
and many many more.

The conclusion is simple...

a)  If you're related to one of those EXISTING Herbalife millionaire, you've got it made.

b) the rest of you... are probably wondering why didn't you succeed like the "winners"

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Oh, the Kiyosaki bit... Let's just say "Rich Kid Smart Kid" is a Kiyosaki retread of what Sir Ken Robinson had been saying since 1980's. And here's proof... Sir Ken Robison's book... publication date of 1982, where he explained that the school needs to teach the arts to foster creativity, instead of churn out workers for the industrial era.




Got that?  Now... about becoming a millionaire... let's do some fact-checking...

First, how many milionaires are there in the US?

Answer: 2.88 million Americans have 1 million or more total net worth. That's 1 in 106.  (Source:Investopedia)  Science Channel has it at 1 in 115, but close enough.

So that graph that claimed your chance of becoming a millionaire is 1 in 1.2 million?

BULLS***!

Now let's fact-check the lottery odds... Really, winning the lottery odds is 1 in 12 million? Where did Kiyosaki get this number? It makes no sense. Are we assuming a SINGLE play? if so, how is that comparable to joining Herbalife, which will take YEARS to achieve that milestone?

Second, what's the odds of winning MegaMillions (in the US) with a single ticket? 1 in 176 million though minimum 15 million is guaranteed.  So if you have 15 winners of the MegaMillion jackpot, each would share 1 million, but the "odds" to have picked the number is still 1 in 176 million...

However, those are not the only games running. Each state often have their own "scratchers" type lottery in addition to the big lotto games, as well as alternate lotto games that can produce 1 million dollar jackpots with odds better than Mega Millions. VegasClicks documented an old Texas Lotto scratcher that has the odds of about 1.03 million to 1 to win 1 million dollars.

Whatever the odds are for winning a million bucks by playing ONE ticket, it's nowhere near 12 million to 1.

That just goes to show you how much **** was Kiyosaki peddling, doesn't it?

Not that he ever learns from his mistakes. He just explains them away.

Coming soon: How Kiyosaki screwed the Learning Annex, and claimed he was robbed but he's smart to not lose much.

Article inspired by by Saltydroid's article "Godfather of Herbalife"

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