Friday, November 27, 2015

Scam Tactics: Attribute Transfer

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

What is Attribute Transfer? 

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

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

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

Profitable Sunrise brochure
using Christ the Redeemer image

Example: Profitable Sunrise 

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

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

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

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

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

Example: USFIA

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

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

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

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

How to See Through Attribute Transfer

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

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

Monday, November 9, 2015

PSA: Victims of WCM777 and related fraud must file claim by December 24th (Deadline extended)

If you were a victim of Phil Ming Xu's ponzi scheme WCM777 and its related entities, you need to gather up your paperwork ASAP and file a claim before December 24th, 2015.

This is the URL of the receiver’s site:

This is the URL of the site to file claims:

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

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

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

UPDATE: After a motion filed by the receiver and agreement by the judge, the deadline has been extended to December 24th, 2015.

Now you have NO excuse not to file if you are a victim.

Wednesday, November 4, 2015

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

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

The short answer is: I don't know.

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

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

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

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

"What is a 'good mlm'?"

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

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

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

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

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

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

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

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

Saturday, October 31, 2015

Scam Psychology: Misconstruing quote from Zig Ziglar about Positive Thinking

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

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

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

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

Follow me...

Thursday, October 29, 2015

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

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

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

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

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

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

Sunday, October 25, 2015

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

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

有个南宁受害者来找哦,丈夫倾家荡产相信兄弟,投资了下去。先是云数贸, 然后圆梦都亏大本,兄弟建议他用南宁回本,有事他包。
A certain victim of Nanning scam came to tell a sob story. Husband is about to go bankrupt, believing in a buddy, invested everything, against and again, first it was YSM (a scam fronted by a Chinese guy), then YC and lost big in both. Buddy told him he can make it back with Nanning, and the buddy claims he'll cover the losses if it happens.  
Thus, this husband threw everything that's left into the Nanning scam, leaving wife and parents with nothing. She asked me, what should she do? Family needs money now to live.  
I said, go to the cops, have the perps arrested.  
She said, no way, can't get the money back that way. Buddy promised that he'll make up the money later. What should she do now?  
I said, give me their information and background. I'll reveal them so they can't hide anywhere.  
She said again, no way they'll return the money if you do that. Now what?  
I said, why are you thinking for these crooks? THEY owe YOU money!  
She said, It's not that she's not going to the cops, she had to get the money first, THEN she'll go to the cops.  
I said, so why are you here? Chitchat?  
Her final answer was, alright, guess I was mistaken about you. 

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

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

Thursday, October 22, 2015

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

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

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

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

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

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

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

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

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