Tuesday, June 3, 2014

NEWS UPDATE 03-JUN-2014: Burnlounge is a pyramid scheme (duh); Merrill about to flip on Wanzeler in TelexFree case? Rippln + Mannatech = ?!?!?!

Remember folks, get your news from REPUTABLE news sources (which I link to) so you can decide for yourself, rather than just one-sided narrative by unknown people.

Burnlounge appeal rejected by Federal Appeals Court

Burnlounge appeal of their 2012 judgement as a pyramid scheme was rejected by the Ninth Circuit Court of Appeals, affirming that they are indeed, a pyramid scheme.

My short profile on Burnlounge:

In their decision, the court stated that:
The district court found that because purchasing a package was required for participation as a Retailer or Mogul, and because Moguls earned cash for selling packages, “[Moguls] by default received compensation for recruiting others into the program.”
The 9th Court's decision can be read here:

The short of it is, if you claim you sold something and are getting paid for that, but in effect you recruited and the recruits are required to buy something, then  your claim of sales is invalid... You are getting paid for recruiting, not selling.

What is interesting is the court's decision reaffirmed Webster vs. Omnitrition as a precedent, but it's no surprise as it's also the Ninth Court that made the Omnitrition decision.

You can read my summary of Omnitrition case here:

This would have some profound impact on some very big players in network marketing that relies on recruiting 'self-consumers' who then recruit more self-consumers to make themselves rich. Those who emphasize retail sales by sales teams should not be affected.

Is Merrill about to flip on Wanzeler just to get out of Jail?

In a motion filed with the Massachusetts court, James Merrill's lawyers asked for release of his client from jail given a lot of stipulations, such as GPS monitor, random house checks, surrender of all passports and travel documents, surrender of assets, and so on. In the motion, Merrill was portrayed as the upright citizen who did not run (unlike his "partner" Carlos Wanzeler, who ran off to Brazil by driving to Canada then flew to Brazil, leaving his wife to lie to Federal agents about his whereabouts ).

No idea when the judge will rule on this motion.

Information from Don @ AsdUpdates.

You can view the motion itself on Asdupdates.com, then click on New Files Website, then TelexFree and look for the 6/2 "motion to release from detention".

Corpse of Rippln to Rise Again with Help of Manna(tech)? 

Previous reports on Rippln made it clear it was a disastrous launch from the start, with silent partners (whose name was removed just before launch), massive recruiting campaigns that lead nowhere, and various promised recruitment bonuses (potentially illegal), and products that are just... well, underwhelming. So it wasn't surprising that after just a year or two Rippln died with a whimper after getting sued by RippleLabs, and various partners went on to Vapt or other opportunities.

You can read my old profile on Rippln

However, there are signs that what's left of Rippln... or at least some of its founders, may be joining with ex-Mannatech CEO Sam Caster, to start a new "Charity MLM" called "EM Squared".

Sam Caster is well known CEO / Entrepreneur / Scammer depending on your view. His prior ventures such as Eagle Shield, and ElectroCat were busted as scams by Texas Attorney General's Office. It wasn't until Mannatech, where he partnered with McDaniels, that he found a somewhat steadier opportunity, selling plant-based gum made into some fancy powder and such. One alleged study that "validated" the magic ingredient was busted in 1999 when the doctor behind the study turned out to have falsified some data. Sam Caster lasted until 2007, when he was forced by Texas Attorney General (again!) to resign after a scandal involving "illegal marketing scheme" which Mannatech eventually paid $6 million to settle out of court in 2009. Sam Caster himself paid a million in civil penalty in 2009, and agreed not to get involved in Mannatech or any other network company for a period of FIVE YEARS.

That blackout period just expired, so here comes a new opportunity... with a little help from his friend in Texas... Terry LaCore and LaCore enterprises, according to some rumors, to create this "EM Squared" (or EM2 as it's sometimes written).

The TL;DR version of EM2 is... They guilt-trip you into buying nutritional bars "The Hope Bar" for hungry children around the world, but somehow if you convince other people to also chip in a lot of $$$ to buy those bars, you get a cut of the "profit". All the bars are given to MannaRelief, which is run by Sam Castor and his wife.

Profit from a charity? WTF?!?!?!

But what's interesting is this "opportunity" is filled with the former top flyers from Rippln, such as Michael Rutherford. There are rumors that Terry LaCore and Brian Underwood are also involved at the highest levels, but so far there's no proof of that.

Also see BehindMLM's review of EM Squared


  1. Give your money from a reputable charity that has a track record and ratings to help orphans. This is a SCAM. The MannaRelief is a SCAM ... please, please do your research. Don't throw money in these his bank account - do something that will really help feed orphans. How insane are these expensive granola bars - everybody gets a cut of the money and the starving kids get a low quality bar!

  2. Expensive bars? Let's set, if they contain all that the label says they do it is 60 bars for $75 or $1.25 each. That's expensive? Give me a break