MLM History – Scams & Warnings

News Archives: 4th Quarter 2001
(October, November, December)

GOING PLATINUM PYRAMID SCHEME = GOING TO JAIL!
30 Dec 2001 – The SEC “busted” Going Platinum for securities violations this summer – jail now soon if this hyped Internet access and marketing company doesn’t cough up some books and information!
The securities at issue appear to be part of a Ponzi or pyramid scheme, under which members of certain programs offered on (the Going Platinum Web site) are led to expect exorbitant returns on an initial investment of $25,” said the SEC. Going Platinum and owner Alan Catalan have refused to produce the subpoeaneed documents, despite being given three extensions of time to do so since Sept.  This usually means the owner gets to sit in jail for contempt of court!
 
INTERNATIONAL WEALTH CONNECTION INNOCENT PYRAMID SCHEME
26 DEC 2001 –  Were innocents.   They did not know their matrix program was a pyramid scheme target!  They have changed the plan!   Their allied company Galaxy pushed the action to convert this to a fast moving legal plan.
 
TREK ALLIANCE ABOUT DONE IN WISCONSIN?
26 Dec 2001 – Strong rumor is the Trek Alliance case in Wisconsin is close to closing.  In July Wisconsin had no sense of humor about “misrepresented income, management positions were available, an investment was needed to become a distributor, their water filters weren’t approved in the state and other little things like this!   MMMM  — Great Shades of the pyramid scheme Equinox!   BAD SHADES!  The state named corporate officers Harry Flag, Rich Von, Morgan Hill… and you guessed it!   The new trend in law enforcement two distributors, Hoseph Delisle and Travis Just.   Ouch!  Let’s see how the hammer drops on this front loading pyramid scheme!
 
USANA TERMINATING DISTRIBUTORS!
17 Dec 2001 – What I once considered one of the top companies has now gone to lowest in my opinion.  The body count is at 4 distributors “machine gunned” out of thier livelyhood.  I really hate to be made a fool… but, that company suckered me in!  I am waiting for the phone to ring again with another sad story!  This seems to be the trend in companies with sagging sales and over all revenue drops.  See the current price of their stock and look at the income trends.  Read the article below on older companies and terminations dated 27 November!

SINGAPORE RESTRICTS MLM
17 Dec 2001 – Singpore is restricting the scope of MLM by modifying their 1973 law to stop pyramid schemes.  The new law goes into effect Jan. 2002 and indicates that only products may be sold.  There are further restrictions on “Front End” loading and value of sales.  Singapore has been hit by a rash of Pyramid schemes in the last year that collapsed leaving people broke.
 
GREAT HUMOR IN DISTRIBUTOR CONTRACT
15 Dec 2001 – Great laugh!  Dynamic Essentials says in their distributor contract you can’t join thier company if you belong to Usana.  We have seen all kinds of kinky distributor contracts ( oh, most companies call them “Terms of Agreement” so they don’t scare you away with the word “contract”) but this one takes the cake!  It turns out  Dallin Larsen who used to run Usana is now running DE.  He has a non-compete agreement with Usanka (your editor’s new nickname for Usana) , so to prevent lawsuits they are now the only MLM company on the market who will not let people join thier company!  Rod ROFL!
 
SOUTH DAKOTA AND MISSOURI DECLARE EPHEDRA GONE!
4 Dec 2001 – The Health care police in South Dakota and Missouri are trying to suck up to the FDA by declaring ephedra a controlled substance.  We found out in Texas that the health dept. bureaucrats were trying to suck up to the Feds to get better paying jobs by stomping on ephedra.  It worked until 1,000’s of us showed up in Austin.  If you are from one of these two states call your state legislators!  Why?  Most of these freaks (including he FDA) want ALL NUTRITIONALS controlled!
 
FTC HITS ANTHRAX CLAIMS
1 Dec 2001 – The FTC hit 40 Online companies and websites including some MLM distributors that were making claims that nutritional products would help stop Anthrax.  This was a light tap in the form of email warnings.  Next round could include hefty fines or shutdowns.  <<Ed Note>> There are several companies pounding this theme hard.
 
MORE SCAMS HIT MORE ONLINE
1 Dec 2001 – Consumers reported losses totaling $4.3 million, or $636 per person in Internet fraud to the National Consumers League’s (NCL) Internet Fraud Watch (IFW) during the first ten months of 2001, up from $3.3 million and $427 per person for all of 2000.  A good company must establish trust online and maintain that trust!
 
OK – GLOVES ARE OFF!  DISTRIBUTOR TERMINATIONS!
27 Nov 2001 – Another one of the DSA gang has taken off on a distributor rampage.  Declining sales (see reasons for distributor termination) and income make companies go nuts.  They look to terminate top distributors for flimsy reasons.  I have now heard the nuttiest ever and on a company I voted for in the “Best Annual” for several years.  Where will the money go?  In the company’s pocket (a DSA member)!   The Direct Sales Association lawyer council is way out of hand.  Not written policy of the DSA but in the meeting of company lawyers formally or informally they pass on all the latest tricks to screw distributors.  I attended a convention 2 years ago where a seminar session was given on how to screw “retired” distributors out of thier commissions after companies had told people to go out and work their tails off to build their retirement income.  I was puke sick at the end of that session, and it hasn’t gotten better.  I just attended an International meeting of top distributors and a pure concensus was that “The Scourge” of the industry is not pyramids! It is non-judicial terminations of independent contractors!    I am planning a spring meeting in Vegas on “distributor rights.”  WAR IS FLAT DECLARED!” To quote The President of the United States . “We want the Evil Doers dead or ?  (how about just gone).    
 
CARRUBA PYRAMID SCHEME HITTING CHECKING ACCOUNTS
6 Nov 2001 – Carruba is almost dead, but they are hitting checking accounts like crazy with auto deducts The only way to stop it is close your checking account.  Beware of auto deducts from Pyramids!
 
Network Marketing Lifestyles Files Chapter 11!
2 Nov 2001 – One of the proud MLM magazines that promoted the industry and featured your editor on the cover of one of the early editions has folded!  They have promised that the last edition coming out will cover all the ads placed and paid for. They hope to create additional publications in the future!
 
Viacreme Answer!
6 Oct 2001 – A quick witted Aussie reports that an Aussie TV show smuggled a hidden camera into a Lexxus Viacreme presentation.  A vivid replay was made on national TV!  The Aussie Feds had a hard time missing Viacreme!
 
Why Viacreme?
5 Oct 2001 – Thousands of items go into Australia without approval.  Why this government hit?  Did all those “screaming” women wake up the Aussie Feds? This has to be the height of beauracratic humor!
 
Australia Reports Viacreme is an unevaluated, unapproved, therapeutic good in Australia.  The import into and supply within Australia of such goods constitutes a criminal offence punishable by a maximum fine of $132,000 in respect of each offence.  The supply of unapproved therapeutic goods in Australia may pose a significant public health risk as such goods have not been evaluated for quality or safety.  The promotion of this product is currently under investigation by the Therapeutic Goods Administration.
For further information phone 1-800 020 653.
 
Bidding Wars – Unicity Counters Sunrider?
4 Oct 2001 – Latest report!  Now in response to the Sunrider monthly stipend offer that seemed to have some ex-Enrich recruiters excited,  Unicity is offering up to $20,000 monthly if you have the geneaology, 1009’s and tax returns to match.  Sunrider started at $20,000 and quickly dropped it to $10k when the supply of “loose shoppers” overwhelmed them.  In this “pirating” poker game of distrtibutors Unicity has now raised the stakes!  Of course the first round was started by David Fan at ViVa last spring making a run at bribing Enrich folks who were worried about the Unicity Merger.  A lot of those offers never got much over $5k a month.  Stakes are going up!  The only good thing about this moral breakdown and full scale pirating is that it is getting people to fly!  At least that will help the airlines and the economy! 

Bidding Wars – Sunrider  Now Pirates Too?
First Sunrider owners got the privilege of being convicted as of one of the largest tax evasion cases in U.S. history.  Reports now have Sunrider inviting MLM  “builders” in with “salary support” similar to what Viva did last year.  No problem there!  But it seems that some “builders” have been asked to bring over their current downlines.   In MLM terms that is known as “pirating.”  A word of caution to those of “builders” going over and looking at this deal
(1) read the distributor termination material on this website.
(2) don’t sign Sunrider’s contract (terms of agreement).
Get your lawyer and write your own!  Yes, Sunrider has terminated people.  What is this campaign?  If your antique comp plan doesn’t work any more hoist the Jolly Roger?  They aren’t the first to do this but it is a sad way to try to promote growth.
 
Pyramid Scheme Getting Legal Too Late – Skybiz’s 911 !
Last year I was hired by several top skybiz distributors to try to get Skybiz legal.  Of course Skybiz did not listen.   Yesterday an e-mail went out (about a year late) trying to identify customers!   To be legal a company has to have customers  that do not participate in the compensation plan to stay on the good side of the law!  If not, expect your company to be hunted down like a dog.   Here is the Skybiz plea for customers!
2 months ago

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