Friday, August 1, 2014

News Update 01-AUG-2014: Zeek Refund Coming 30-SEP-2014; More Zeek Winners Get Sued; Zeek Heads Reach More Settlements

Yep folks, this is turning into an all Zeek Rewards Ponzi aftermath update. And yes, I have links, which you should ALWAYS CHECK to make sure I'm reporting stuff accurately. (And if you don't see links, ask)


Zeek Refund Round 1 May Be Coming 30-SEP-2014

According to court documents as reported by ASDUpdates, Judge Mullens has approved the first distribution of refunds for Zeek Rewards, tentatively scheduled for 30-SEP-2014

Stay tuned to the Zeek Rewards Receivership website for actual announcement. Speaking of which...

Tuesday, July 29, 2014

Scam Psychology: How Scammers Push Your Buttons through your personality disorders

The Age of Uncertainty
The Age of Uncertainty
(Photo credit: Wikipedia)
As the MLM Skeptic, it is rather interesting to see many people who are defending their particular scheme from criticism suffer from personality disorders (not that I am a professional of any sort regarding psychology). They are often self-obsessed and arrogant as well as intolerant of ambiguity, and lack of empathy.

Many unscrupulous multi-level marketers and scammers play to these personality disorders by claiming they are VIRTUES, not disorders. These disorders are, instead, presented variably as confidence, conviction, certainty, and "they are not us".

People develop coping mechanisms when their self-image was diminished. One of the most common coping mechanism is retaliation: when they feel devalued, they devalue others as a response. Scams often play up this personality disorder by encouraging it with "they are not us; they don't think like us; they just don't understand us".
Any one who questioned the person's choice (the scam, in this case) will be devalued, even if they are best friends and family, and even spouse. That's why "intervention" when it comes to scams rarely succeed.

Another coping mechanism people develop is equating conviction with certainty. Conviction is a collection of your strong beliefs about the morality of your choice and/or behavior. If you don't really have much conviction, you'll often adopt certainty as if it is conviction. Thus you'll also develop certainty about other people (and what you believe to be THEIR conviction or lack thereof). This comes across as arrogance and intolerance. Scams play up this aspect by creating fanciful stories about the critics asking questions, such as "you're just jealous; you're just out looking for hits for your blog; you must have hated the owner; you're the 1% out to fleece us the 99%".  After Zeek Rewards ponzi scheme was shut down in 2012, some started floating fanciful stories about "SEC doesn't have a case because they privately admitted to our lawyers".

However, what people don't understand is very often, certainty is an ILLUSION.


Sunday, July 27, 2014

Scam Detector: What is "Cockroach Theory", and how does it apply to suspect schemes?

cockroach
cockroach (Photo credit: TomSpinker)
Ever heard of the "cockroach theory"?

It's quite simple, actually. When you see one cockroach, there's probably a lot more hiding nearby.

When applied to investments and companies, it means when you see one problem, there's probably a lot more problems that you are not seeing. (And you should jump ship ASAP)

The theory is also applicable to potentially shady opportunities, actually. If you are smart enough to read the signs, and not ignore them.

Let's take one very obvious example: Zeek Rewards. They were shut down by the Feds in August 2012. But signs had been there for MONTHS that it was in trouble.

Zeekler, the auction, had been in operation since 2010 (as FSC auction and later Zeekler) without an auction license (required in North Carolina, their home state). They did not obtain an auction license until March 2012! But nobody checked. That may have been a roach but nobody saw it. Because everybody assumed it's all legal.

Did you know that Paul Burks, head of Zeek, was performing as "the singing magician" before he retired from performing and started MLMs instead? You know magic is just deception for entertainment, right? That may have been a roach but nobody saw it, because they've been distracted. 

In April 2012 Zeek Rewards suddenly banned a dozen or so European countries from participating, and gave several bogus reasons, one even blaming the US State Department Office of Foreign Asset Control (OFAC) uttered by the head Zeek Paul Burks himself. However, this was all proven to be lies only weeks later. Turns out they were both hit with thousands of stolen credit cards and by Denial of Service attacks. And their system can't handle it. The lie was pierced by BehindMLM within two weeks. Is that a cockroach you see? Did you miss it?  

By June 2012 they apparently got a local TV station to report on their "success", and even got the reporter to state that the North Carolina's Attorney General office had deemed the business legal. (Wonder whose palm they had to grease to have that happen?)  AG's office was so shocked, they demanded the video be taken down and the text changed on the TV station's website. Oh my, another roach! Did you miss this one too? Or is that "I see no roach (negativity)?"

Friday, July 25, 2014

Scam Psychology: is Positivity Training perpetuating Mental Illness symptoms?

A recent Dilbert comic had this quote

"Certainty about the future is a sign of mental illness."  (NOTE: There's a second lesson here about "we shall (not) be vindicated".)


Why? Because only the self-delusional are absolutely certain about anything... including the future. And self-delusion is a mental illness.

Therefore, thinking only positive thoughts about yourself (well beyond what's needed for self-esteem) and your future is also self-delusion.

But wait, you say, are you saying that I can't give myself a compliment? A thumbs up to myself in the mirror?

No, I didn't say that. Going OVERBOARD with such compliments to the point of ignoring reality is dangerous, and so are anyone trying to dissuade you from reality.

But to explain that, we need to explain how the brain works when it comes to social interactions.


Thursday, July 24, 2014

BREAKING NEWS: Brazilian Authorities Cracking Down on What's Left of TelexFree in "Operation Orion"

English: Coat of arms of the Brazilian Federal...
English: Coat of arms of the Brazilian Federal Police Português do Brasil: Brasão da Polícia Federal Brasileira (Photo credit: Wikipedia)
News in Brazil, citing sources within Brazilian Federal Police, reported that "Operation Orion" (allegedly named because it aligned with the 3 pyramids in Giza, Egypt) has commenced against TelexFree / Ympactus in Brazil, with no less than NINE search warrants being served on various TelexFree / Ympactus related locations.

http://www.eshoje.jor.br/_conteudo/2014/07/noticias/policia/20222-operacao-orion-pf-investiga-crimes-financeiros-das-atividades-da-telexfree.html  (link in Portuguese)

http://www.pres.mpf.mp.br/site/  Link in Portuguese

It is also worth pointing out that these warrants were issued by the court of Espirito Santo, where Carlos Wanzeler currently lives as it was where he originally came from. Wanzeler is now a fugitive from US law (a warrant for his arrest was issued yesterday from the US grand jury indictment, according to WSJ) having abandoned all his properties and his wife in the US before the indictments were handed down. His wife had attempted to leave the US for Brazil but was arrested on a material witness warrant at JFK airport, minutes from boarding the plane. His daughter had left with him by driving across the border into Canada THEN took a flight to Brazil (apparently in an attempt to get away from government watchlists)

His partner in TelexFree, James Merrill, is under house arrest and GPS monitoring having previously been arrested, and was only let out after almost 1 million dollars in bail had been posted.

Due to the timing (this being handed down one day after the US grand jury indictment against Merrill and Wanzeler in the US) many are speculating that there may be tight cooperation between the US and Brazilian authorities on this matter. However, this cannot be confirmed at this time.

Stay tuned for further updates.

Wednesday, July 23, 2014

BREAKING NEWS: Grand Jury Indicts Merrill and Wanzeler in TelexFree ponzi; arrest warrant issued for Wanzeler

Decision on 23-JUL-2014 by Federal Grand Jury has indicted Carlos Wanzeler and James Merrill of wire fraud and conspiracy to commit wire fraud.

Apparently Wanzeler had transferred TENS OF MILLIONS into his own account and had used it to buy up properties all over the state using his wife, Katia Wanzeler's real estate business.

All of that is YOUR money, if you had put money into TelexFree. It simply went into "their" pockets.

According to Wall Street Journal, there is now a formal arrest warrant out for Wanzeler.

Details at BehindMLM

http://behindmlm.com/companies/telexfree/merrill-and-wanzeler-indicted-for-fraud-and-conspiracy/


In other news, some (3 total) moronic defendants of clawback lawsuit launched by the Zeek Receiver chose to fight back by filing a countersuit, demanding almost a million in "back wages". What they don't tell you is they each are facing clawback of about 1.5 to 1.7 million EACH. That's how much they benefited from Zeek.

http://behindmlm.com/companies/zeek-rewards/zeek-top-pimps-demand-almost-1-million-from-receiver/

Monday, July 21, 2014

Due Diligence: How to Read an Income Disclosure Statement

It seems that people are losing their basic math skills, or even willingness to apply math to simple problems... such as "should I join _____". Today, we are going to pick an example, and show you how to read such an income statement. And yes, this may involve some WORK, so you should probably sit in front of a computer, as you may need to type in some numbers into a computer (one in library should be fine as long as you have access to Google)


Today's... example, Vemma. Their 2013 income disclosure can be access here:


Any way, first thing you should note about the two bar graphs is... WHY TWO GRAPHS? Looking at the two graphs should make you realize two things:

1) The two graphs have DIFFERENT scales

2) The two graphs both use exponential scale instead of linear, thus de-emphasized the difference in bar heights. 

In fact, if you regraph the same numbers, using a linear scale, it looks like this (go ahead, do this in Google Sheets yourself)


The red line has the SAME numbers as the Vemma graph, but using a LINEAR scale, combined into a single graph. The blue line is the percentage of all affiliates. 

Roughly translated: vast majority of the company make peanuts, while a selected few made much much more... one made like 2.5 million in 2013.