Scam Tactics: Why do HYIPs compound DAILY?

Why do HYIPs compound daily?

The answer is "habit loop"... The HYIPs are there to feed you false information to get you to form a habit... "trust us"

Habit loop has three steps

• Cue -- the trigger to start the routine
• Routine -- the behavior
• Reward -- the reward for performing the routine

A cue triggers the habit, much like the bell causes Pavlov's test dogs to start salivating. 

The actual routine is the behavior triggered by the cue. A physical routine is sometimes called "muscle memory", but a routine can also be emotional or just mental, or combinations. 

The reward is the endorphin rush you get when you've completed the routine, can be physical rewards (like chocolate) as well. A reward can be a simple "whew, glad I survived that" to a little smile when you realized you parallel parked perfectly or anywhere in between.  

The way the brain works is as soon as it spots a cue, the brain automatically executes the routine, without further processing. Think of it as "macros" that is run automatically. The brain doesn't need to calculate every move as long as it saw the cue. And the reward for finishing the routine is what cements the routine into place, and turn it into a habit. 

So what does all this have to do with HYIP, i.e. micro-ponzis? 

The HYIP operators are out there to make it your habit. You are prompted and was rewarded for doing so. And to accelerate your habit formation, the ponzis compound daily. Once it became a part of your habit, it makes you resistant to any suggestion that you're involved in a fraud. 

Scam Tactics: How Easy It Is To Fool Experts and Review Sites, or allow them to fool you

Recently, there's an article at Vice.com, where the author decided to play a hoax on TripAdvisor... They created a FAKE restaurant, which is a picnic table in the back of the author's house, created some FAKE entrees (you'll laugh at the ingredients), got some FAKE reviews through burner phones and whatnot, and got it to be the top-rated restaurant in London... a restaurant that does NOT exist.

I won't spoil the method, let's just say, it's easier than you think.

This wasn't the first prank the author, Oobah Butler, had done. Previously he bullsh*tted his way onto Paris Fashion Week and it was absolutely brilliant. But he's hardly the first to prank experts and succeded.

But then, expert reviews are fooled all the time.  In 2008, wine critic and author Robin Goldstein created a fake restaurant, allegedly stocked with the worst wines Wine Spectator magazine had ever rated. The submitted it to the said magazine. After a while, the fake restaurant had won "award of excellence" by the same magazine.

Wine Spectator called it "publicity seeking stunt", but it exposes something deeply troubling... What sort of experts at the magazine review the candidate for "award of excellence"?  And if they let a fake restaurant get on, what can DELIBERATE manipulation do?

But the pattern ran much much deeper than that. Experts are fooled ALL THE TIME.

• TV host displayed a $15 IKEA print in an art museum, and none of the art experts spotted the problem. 
• The Wine Spectator gag had a sequel... a French scientist decided to die a white wine red and gave it to 54 wine science students. NONE could detect they are tasting a white wine.  
• Food experts cannot tell McDonalds chicken McNuggets from "organic" chicken nuggets. In fact, people cannot tell organic fruit from non-organic fruit

And the problem doesn't stop there. There are review and authority websites that secretly signs under-the-table deals with crooks to promote or write nice articles without any disclosure. And this had been a long-standing problem in network marketing.

Scam Psychology: Why Scammed Victims Refused to Believe They've Been Scammed

As the #mlmskeptic, it is often sad to see how people turned absolutely illogical when it comes to money. We all like to believe we are rational creatures, capable of evaluating problems objectively. However, scientists have shown that our biases have far more hold on our processes than we think, and skepticism must be learned to combat those biases.

Let's take ZeekRewards for example. ZeekRewards is a convicted ponzi scheme that was closed in 2012 by US Secret Service and SEC.  You can learn more about Zeekrewards on Oz's website BehindMLM.com , or check my attempt to track the scam throughout 2012 until just as it closed.  But basically, even AFTER the scam was closed by the authories in October 2012, people CONTINUED to believe in the scam.  One of them even posted this note on the closed office window of Zeek:

"We forgive you / Please restructure and save our Dreams"

There are comments posted by conspiracy theorists who insisted that Zeek was closed for nefarious reasons, and Zeek cannot possibly be a Ponzi scheme.

Curt Miller: It was the SEC that slowed your growth, sorry. There were no victims until the government came around...
only 2 million happy affiliates. It was no ponzi and the program would NEVER have gone bankrupt. 

Basically, people are in denial. They refuse to believe they have been scammed. Instead, they behaved irrationally by spinning tales that fit their own biases.

Scientists have been studying this for a long time, and they now have more proof that we would rather believe in something that cost us $$$ rather than accept bad and unpleasant news.

Less than 1/4 of all pyramid scheme victims ever file a complaint, says FTC survey

Some recent surfing brought me to an interesting bit of information:

...consumers who had purchased a [membership in] pyramid scheme were the least likely to complain – less than one-quarter indicated that they had complained. -- FTC fraud survey (2004)

This is a fascinating statistic. The FTC definition of pyramid scheme specifically means "pyramid marketing schemes", as in MLMs that went over to the dark side.

Here it is important to note that FTC questions were actually 1) Did you purchase an opportunity to operate (your) own business  2) Were you lead to believe most of the money earned from this business would be from recruiting others to join the business, rather than sale of products and 3) Were you deceived by the offer of business opportunity with false income claims or false offers of assistance?  (Not exact wording, but you can find the questions in the linked PDF)

It is worth noting that in MLM...

A) Almost all MLM claim you are "owning your own business", follow by a derisive attitude toward a job ("just over broke" is often uttered).

B) You almost always get some lecture that you are NOT in a pyramid scheme, yet you are told to "build your team", which is just euphemism for recruiting.

C) Many questionable "leaders" of MLMs will resort to false income claims and false offers of assistance to get you to join, then blame you for your failure. "You must be doing it wrong", they'll point fingers, "because it worked for me."

But there is a hidden statistic that is not obvious until you read the fine print...

... In conducting this test it was necessary to drop the government jobs and business opportunities categories because there are too few consumers who experienced these types of frauds to meet the necessary statistical properties to conduct a Chi-square test.

The "government jobs" fraud is victim paid for false promises of government jobs. And business opportunities... needs no introduction.

But think about it. If there are so few reported incidents for them to even calculate the odds of underreporting...

Either there are so few instances of fraud in business opportunities...

Or there are so many instances of underreporting in business opportunities that it's like an iceberg...

Let's consider a real ponzi case... Zeek Rewards.

IPro Network (IPN) and the MLM Game of Telephone: garble up the message to sound better

Recently I came across a comment about IPro Network on BehindMLM.

First, what is iPro Network? Some generic discount network based on some generic altcoin they are billing as some fantastic e-commerce opportunity, you should buy into the currency despite there's no proof that it was widely adopted (since there are tons of altcoins out there). It's so fantastic, there is absolutely NO TRACE of the CEO on the internet (other than on their own website), who wears a clearly wrong size shirt (he can't even button his collar), despite claiming "15 years experience".

Anyway, here's the comment about why is the review so hard on a "legitimate" opportunity.

"Bill Antonio": "Oz I appreciate you trying to protect marketers from scams but why is it that you seem to criticise every business opportunity and preventing people from making money online from legit companies. IPN has been endorsed by Scott Warren a most sought after MLM Lawyer as IPN has met all the compliance guidelines and has also being endorsed by well-known entrepreneur Kevin Harrington from Shark Tank who is highly respected in the business world.They also have sought after motivational speaker Jay Abraham who is in the same league as Anthony Robbins. These people will never be involved in any scams.

Okay, there are a couple things to note:

1) Did Scott Warren, an MLM lawyer, "endorse" IPro Network?

2) Did Kevin Harrington (Shark Tank) endorse IPro Network?

3) Does Jay Abraham work for IPro Network?

Not surprisingly, the answer is "no proof of such" in each and every case.

This is like the game of telephone, where somehow message was distorted into whatever the promoter wanted to say, instead of the REAL content.

So what is the truth? Let MLMSkeptic lead you to some discovery.

Two Ponzi Scammers Got Their Prison Sentences Handed Down...

Two ponzi scammers got their prison sentences handed down recently in early 2017.

Paul Burks, who was the head of the $939 million Zeek Rewards ponzi scheme with over 1 million victims around the world, got 14 years in a Federal prison, in addition to fines of $244 million in restitution (which he can't pay as he already gave up all his possessions) and 3 years probation. Given that Burks is already 70 years old and is believed to be not in the best of health, he may spend his final days in prison.

Two other top heads of the scheme, Daniel Olivarez (computer guru) and Dawn Wright-Olivares (VP of Operations and spokesperson) have been sentenced previously to lesser terms for their contributory roles in the scam that was shut down in 2012 by SEC and Secret Service. It was believed they were fined and have to give up their residence. There was no word on what happened to a restaurant Dawn allegedly operated, or what happened to her job at a different MLM company called iWowwe.

MLM Skeptic had been tracking Zeek Rewards for over a year before it was shut down and published several articles explaining how Zeek Rewards cannot be legitimate. Indeed, in the final days of their scam they tried to gag me with a "takedown request" to my content host by claiming MLMSkeptic had violated their trademark when it was quickly realized that the alleged trademarks was not even owned by them! Must be really desperate over there in their final days, as only a few weeks later when SEC and Secret Service stepped in.

In other news, co-leader of a smaller ponzi known as "The Achieve Community", Kristine Johnson, was sentenced to 21 months in Federal Prison. TAC, which is peanuts compared to Zeek, was shutdown in 2015 by SEC. It was a pretty simple Ponzi scheme that didn't bother to polish itself by hiring celebrity lawyers and experts and pretending to be legitimate. They mainly stuck to Facebook and such, by claiming "triple algorithm" that can multiply money... What utter nonsense.

MLM Skeptic had not been tracking TAC but it was identified early on by Oz of BehindMLM as a simple cycler ponzi scheme.

What do these two scams have in common? It's actually quite simple..

GREED.

Cognitive Bias: Sunk Cost Fallacy

Answer this following question to yourself, truthfully please. Remember, it's for you and you alone. Only you would know the answer.

Q: Do you make rational decisions based on the best-estimate future value of objects, investments, and experience? 

Your answer to yourself is probably going to be: Yes, of course.

You are wrong. In reality, your decisions are based on your EMOTIONAL investment you already made and accumulated, and the more you invest, the less likely you can let it go. 

This is a cognitive bias known as "sunk cost fallacy".  In short, you are basing your decision on what has been invested, rather than what it's worth NOW (or in the future).

And it's very simple to make you feel you've invested time and effort... by making you do trivial tasks that amounts of zero importance. Zookeepers (and pet owners) know this principle well... it's called "contra-freeloading".

Contrafreeloading is a term coined in 1963 by animal psychologist Glen Jensen, who created an experiment where 200 albino rats were given a choice: unlimited food pellets in little bowl, or a mechanism where they have to learn to press a lever to release a food pellet. Logically, rats should simply gorge on the effortless food and never touch the lever. However, the opposite happened... rats actually prefer the food source where they had to press a lever, by a large margin. This was since repeated in gerbils, mice, birds, fish, monkeys, chimps... and more. (The only exception is the domestic cat). In short, animals prefer doing a little work (but not too much) for their food, rather than just take a handout.

A great example of contra-freeloading in a scam is ZeekRewards ponzi scheme (as accused by SEC and USSS), an $850 million scheme will soon go to trial. In ZeekRewards, one supposedly buy bids in the Zeekler penny auction, give away the bids to random strangers as promotion, and gets rewarded with certain amount of daily profit based on the bids purchased for the next 90 days. One also needs to post ads to random places on the Internet, and then post the URL on the ZeekRewards website as "verification" to be rewarded. In reality the vast majority of the bids were never used (i.e. the participants simply put money into the system) and expect daily "profit share" of up to 1.8% of the money they put in. The daily posting of ads were never tracked and verified, and indeed some people started a blog just to post ads... that nobody will ever read or see. It's rather obvious, in hindsight, that the "posting the ad" must be contrafreeloading... to make the participant feel they "worked" for and "earned" their share of "profit" amounting to as high as 1.8% DAILY, when the trivial task can literally be done in a few minutes, and be outsourced to some kids for pennies a day.

Yet when all these facts were pointed out to the ZeekRewards affiliates, their answers often are "you work for a competitor", "you work for the 1% to oppress us", "why don't you want us to succeed", and so on. After Zeek was shut down, several members even outright claimed "there were no victims until the government came along."

Curt Miller, on FB, soon after Zeek was closed by USSS and SEC, claiming that
"there were no victims (in ZeekRewards) until the government came along". 

They are so emotionally (and financially) invested into ZeekRewards, they can longer think rationally and see reason, even when there is NO REASON to continue to behave irrationally.

It is illogical to continue to support an alleged scam AFTER the owner made a plea deal with the government. However, hundreds of people donated money to a organization that promised to put the money toward "defending" ZeekRewards from the SEC. The owner of such organization was later jailed for defrauding the US government in an unrelated matter. The so-called defense ended up being an attorney who attended the receivership meetings, and filed several motions that was denied. He accomplished nothing useful except delay the process for the rest of the victims, and it was widely rumored (but never confirmed) that the rest of the money went to the organizer's private plane's upkeep.

They are the embodiment of sunk cost fallacy.

OPINION: With HLF consenting to reforms, and Burks of ZeekRewards Guilty, justice prevailed, but work is never done

July 2016 has been a busy month.

On July 15, 2016, news was released that Herbalife has reached a settlement with the Federal Trade Commission where HLF agreed to a LONG list of reforms and pay a $200 million fine / reimbursement to the victims.

Then on July 22, 2016 Federal Court in North Carolina passed down the verdict... a Federal jury has convicted Paul Burks of ZeekRewards of all four counts of fraud and conspiracy to commit fraud.

MLMSkeptic has long criticized both schemes, both here on the blog, and on BehindMLM.com.

MLMSkeptic had analyzed the various comments, retorts, criticisms, and cheers of Ackman's epic short of Herbalife at end of 2012 and the subsequent PR war, and pointed out problems with such arguments.  Most of the critics of Ackman then believed that HLF was "too big to fail", or perhaps "not egregious enough to die, maybe fined".

So it is with much amusement and facepalming when "journalists" loudly proclaimed "FTC says Herbalife not a pyramid", when FTC said no such thing.

How did CNNMoney got it so wrong?
FTC never said HLF is not a pyramid scheme... 

You are welcome to search the actual FTC complaint and stipulation agreed to by HLF. "Pyramid scheme" was nowhere in the documents. Furthermore, when questioned by the press at the news conference, FTC Chairwoman Edith Ramirez was asked at least FOUR SEPARATE TIMES whether HLF is a pyramid scheme, and Ramirez repeatedly dodged the question (probably as a part of the settlement).

Q: I know that you’re not going to put any labels on this, but it seems to me if we look at the BurnLounge case, that while this complaint does not use the words “pyramid scheme”, would you agree that a prima facie case of a pyramid scheme is alleged with the allegations within the complaint?

A:  Again, I will leave it up to you to draw that conclusion. Our focus in this complaint was in addressing the core issues

When asked outright about HLF's own announcement... That FTC have determined HLF to be NOT a pyramid scheme...

Q: Did you review the language in their (Herbalife’s) press-release that sort of affirmatively said that they were not declared to be a pyramid scheme? Because they’re sort of having that as an outright headline.

A: I do not agree with that statement. The word “pyramid” does not appear in our complaint that is true, but um again the core facts that we’ve alleged, that we consider to be problematic with their compensation structure, are set forth in detail in our complaint. And again, I will leave it to readers to draw their own conclusions. But that they were determined to not be a pyramid… that would be inaccurate.

And indeed, checking the HLF website no longer shows any sort of language that claimed "FTC determined HLF not pyramid scheme"...

So you know which way the CNNMoney article was written... They were written from HLF's press release, not the FTC press release. It is... biased.  Shame, CNN. Shame on you for lazy reporting.

I am not listing all the changes that FTC managed to squeeze out of HLF. You can read the documents linked above yourself. It is a LONG list of reforms, and it will likely become a new standard much as Amway's settlement with FTC created the modern MLM back in 1979.  And that pretty much tells you the fact: HLF was a scam that required reforms so it is no longer operating as a scam. Any one who argues otherwise is simply denying reality.

I may do my own analysis later on these changes, but HLF is no longer the same company. They believe they can continue to thrive (or else they would not agreed to these changes), but we shall see.

Then we come to Zeek Rewards, and Paul Burks.

How to be an online marketing idiot: arbitrary DMCA takedown notices and SLAPP

English: Very poor sketch of a desired icon for DMCA takedown notices on articles, emphasizing Wikimedia's submission... created for conversation at Commons:Village pump#DMCA takedown templates and material. (Photo credit: Wikipedia)

It seems some people have NO concept of copyright, and think that issue random threats to sue is somehow a valid tactic in "reputation management". Such idiots should never be allowed to do marketing online, but this is a democracy, with freedom to do all sorts of things, including making a total fool of oneself.

Recently, Techdirt, a tech news website, highlighted a particular idiotic DMCA takedown notice. The story basically goes like this. in 2015, Techdirt writer Tim Cushing put together a list of "stupid DMCA takedown requests" because, well, they are stupid, like DMCA takedown notice to Google... about images cached on Bing (which belongs to Microsoft, not Google), or DMCA takedown on news coverage about one's crimes by self-publishing a book about it, and so on and so forth.

One of these... online marketing idiots, instead of acknowledging mea culpa, doubled down and issued a DMCA request to Techdirt claiming their copyright were violated because Techdirt used a couple of the images offered by the company, called Andromedical, as example, complete with Andromedical's prominent watermark. Oh, and the same copy apparently posted random comments online claiming Techdirt is owned by some company nobody ever heard of, is a patent troll, claiming various bogus misdeeds by the writer, and more. It's a basic slander campaign... all because they can't admit they were idiots.

The idea that TechDirt, a news website, can be liable for copyright violation for "covering" Andromedical (whose product is a penis pump, named... AndroPenis (tm), really imaginative, guy) as a news item is simply hilarious. It's even MORE hilarious that Andromedical's complaint also claimed that Techdirt is a "counterfeiting operation" and the violation is being reported "to INTERPOL".

The bottom line is actually quite clear: "we don't like what you say about us, STFU!"

But the world doesn't work like that. There are exceptions to copyright called "fair use", and using the company logo and publicly available photos provided as promotional material by the company to illustrate the company, and in no way asserts being the company, is obviously fair use.  If you put info out in the public, you can't control what people do with it, be it positive or negative.

Yet some scams and suspect schemes are quite fond of using these bogus copyright and/or trademark claims as well as threat to sue or outright lawsuits in hopes of silencing critics as a part of their "reputation management" strategy.

Is it just series of bad judgment, or "once a thief, always a thief"?

Given that how many of the Ponzi pimps have been around for years, it's quite surprising that people aren't using Google enough and pick up their history.

One of the most vocal supporters of OneCoin was Thomas E. McMurrain. This is him pitching his "Welcome to OneCoin AlphaTeam"

Thomas E. McMurrain, pitching his OneCoin Alpha Team

The guy really needs better green-screening. The sun is clearly coming from the RIGHT in the photo background, but his face is lighted from the LEFT.  But who said that these folks are exactly detail oriented?

But if you bothered searching his name for a bit (never mind his self-PR like "7th Disruption", a book he "wrote" to promote OneCoin) you'll find some rather... disturbing details, like how he kept picking losers... Such as... Solavei

Tom McMurrain touring country w/ Solavei in 2012
Solavei went belly up in 2015

For those who didn't keep up, Solavei closed its doors in late 2015.  Which is apparently when Tommy here picked up the OneCoin banner. He apparently posted on Facebook when Vemma was closed by FTC "come join us in OneCoin", much like ambulance chasers.

So what was Tommy doing before 2015? Well, we need to count, but there's FlexKom... a scheme that went nowhere except Turkey and pushed by Ponzi-pimp Ian Driscoll, formerly of BannerBroker.

Just a few months later, it apparently did not pay Tanju Colak a Turkish ex-footballer and local celebrity, whom joined FlexKom a while back. Mr. Colak sued and FlexKom lost. A possible class action lawsuit was still undetermined as of 2014, and I can't search in Turkish to find an update, but it is said to possibly involve 40000 FlexKom members in Turkey. The business also seem to have gone quiet at the end of 2014. Definitely NOT another winner, something that sells itself, as Mr. McMurrain claimed, if it can't even sell itself on their home continent.

So what else did Mr. McMurrain involve himself in? No less than one of the widest spread Ponzi schemes in US history:  ZeekRewards.

Tommy here registered a "join Zeek and make me $$$" domain in March 2012. For the record, Zeek Rewards was shut down in August 2012 by Secret Service, SEC, and other Federal agencies.  Again, Tommy can't seem to pick a winner.

So what was Tommy doing even before this?  TVI Express... an international pyramid scheme.

Do You Know Where Your Money Went If You Invested in a Suspect Scheme?

According to court documents made public recently, ZeekRewards ponzi scheme victims may have a longer wait if any money can be recovered, for millions of their money held by payment processor for Zeek being a high risk client, may have been in several Eastern European Banks that have been shut down for fraud, and chances for recovery is remote.

Zeek Rewards was a Ponzi scheme in North Carolina that ensnared MILLIONS of victims in the US and beyond by promising massive profit sharing from the alleged penny auction business if they "purchase" bids to be given away as promotional items and in return gets a profit share based on amount of bids purchased for the next 90 days at daily rate of up to 1.8%. The scheme collapsed in 2012 when facilities was raided by SEC and Secret Service agents and entire operation closed down. Since that time, a receiver has attempted to recover tens of millions of dollars held by third-parties, who were supposed to obey court orders not to move the money, and to be eventually returned. Yet it is clear now this order was not obeyed on many occasions, and tens of millions have gone missing.

Before the collapse of Zeek in 2012 Zeek consultant "Keith Laggos", MLM Expert, boasted that he helped Zeek management to move payment operations abroad. People then didn't ask why. The reason can only be that US financial institutions no longer want to touch Zeek. Now, millions of dollars are out of the US, and potentially out of the reach of the victims, all thanks to efforts of Zeek to continue operating its criminal enterprise by moving money overseas. If this all sounds confusing as heck, let's start from the beginning.

WSJ: T. LeMont Silver Blames Everyone But Himself for Being Sued as "Net Winner" in Zeek

Wall Street Journal article, published 2014-DEC-03 specifically named T. LeMont Silver, a Zeek "net winner" (i.e. he got more than he put in while others lost money), and serial Ponzi participant, as someone who admits he's an idiot, yet blames everybody except himself.

In the WSJ article SEC on Lookout for Web-Based Pyramid Schemes by Jean Eaglesham, it specifically named GoFunPlaces (and its parent eAdGear) as a scam shut down by the SEC.

At the end, Mr. T. LeMont Silver Sr. was mentioned by name, where the author wrote:

"Mr. Silver said he is a marketer with little knowledge of the business operations of the companies he promotes"

Yet he wants you to join him in making money.

Tsk, tsk, tsk...

BREAKING NEWS: Fed Grand Jury Indicts Paul Burks of Zeek Reward Ponzi Scheme

Star Tribune (North Carolina) has reported that Federal grand jury has indicted Paul Burks, head of Rex Venture Group, parent company of Zeekler and ZeekRewards ponzi scheme, of wire and mail fraud, conspiracy, and tax fraud.

http://www.startribune.com/business/280347122.html

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...

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

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)?"

News Update 30-MAY-2014: Zeek Receiver First Disbursement Few Months; Sann Rodrigues will NOT get award in Brazilian Congress; Trustee order issued by TelexFree judge

For real news regarding scams and schemes affecting you, stay tuned to REAL news, not bogus news spread through your uplines and similar people out to recruit you.


Zeek Receiver Announce First Distribution Coming 30-SEP-2014

On the ZeekRewardsReceivership website, receiver Ken Bell announced that the first interim distribution is tentatively scheduled for 30-SEP-2014. All people who have filed a claim must have accepted the claim by 15-AUG-2014 to be paid by 30-SEP-2014. Also, those outside of the US must sign the OFACS waiver as well. Please see the ZeekRewardsReceivership.com update for yourself, as linked above.

Obviously this will NOT be the only distribution, but rather than make victims wait even longer (Zeek was closed in 2012!)  a distribution will be made now while receiver goes after more net winners.


Sann Rodrigues will NOT receive award in Brazilian Congress

An event arranged by a Sao Paolo business leader Regino Barros to honor Sann Rodrigues, accused pyramid scheme TelexFree co-conspirator, and other people, has been cancelled hours before it was to start, according to iG News in Brazil. Sann Rodrigues was scheduled to receive "multi-level marketer of the year" award, according to program notes for the event, where Regino Barros will name Sann Rodrigues to "Multi-level Marketing Regulatory Agency", which is a private organization, despite the official sounding name and is not a government agency, according to iG. The senator who booked the room in Congress for Barros apparently was surprised at seeing Rodrigues' name on the list of honorees, but replied "we should not crucify before we have all the fact." when questioned by iG about Rodrigues. It is unknown if Rodrigues would have attended personally.

http://economia.ig.com.br/2014-05-29/homenagem-a-lider-da-telexfree-no-senado-e-cancelada.html (in Portuguese)  and thanks to PatrickPretty for the lead

Scam Psychology: Is Enforcing Positivity Even Legal? (HINT: NO!)

English: Color logo of the National Labor Relations Board, an independent agency of the United States federal government. (Photo credit: Wikipedia)

Previously here on MLM Skeptic the topic of "positivity" had been discussed several times. But a recent ruling by National Labor Relations Board (NLRB) has great implications: turns out, enforcing "positivity" at work is ILLEGAL and violates Federal labor laws.

A non-Union hospital has a standing policy that prohibits any sort of negative commentary about the hospital or fellow workers, and outright prohibits "negativity or gossip". It even REQUIRES employees to represent the employer in the public in a "positive and professional manner".

The NLRB which interprets Federal Labor Law says this language so so vague and overreaching it is illegal. And it can inhibit the employees to discuss ways to protect their own rights in groups.

The MLM Skeptic points out that this sort of "no negativity" is common practice on many suspicious scheme's public forums. Zeek Rewards forums were famous in 2012 for killing off ANY sort of criticism or any hint of incompetence by the company, so you are reduced to virtually only 3 types of posts: announcements "Official Zeek", cheerleader-type comments "Zeek is great!" , and whiny questions "please help me..."

ZeekRewards Ponzi STILL Screwing Victims long after it was closed in August 2012.

It is now coming up on 2 years since Zeek Rewards ponzi scheme was closed in August 2012, and we are once again reminded how wide-reaching this scam was, and how the effects of the scam continues to haunt its victims even today, but probably not in the way you think.

MarketWatch (Photo credit: Wikipedia)

An article on MarketWatch named the 4 biggest blunders a retirement saver can make, and one of them is listed as "emotional missteps".  Basically, after getting scammed by Zeek Rewards, the victims can react by choosing a super-conservative investment, simply because it is "low risk" when they can choose a higher yield (and more fitting to their risk profile) investment. So in effect, they CONTINUE to lose money due to Zeek, long after Zeek was closed.

This is compounded by the loss of interest on the money lost to Zeek, even if some of it is expected to be returned soon by the receiver.

There is a Chinese saying for this: "Bitten by snake once, fear hemp rope for 10 years." The western version is "Once bitten, twice shy."

But you will be getting back something soon (in a few months), if you've accepted the claim figures sent by the receiver. Of course, it's better to have never fallen for the scam in the first place.

But that's why you need to read skeptical blogs, rather than "avoid negativity".

Related articles

• Zeek Rewards receiver still plowing through claims
• 72K accept Zeek Rewards settlement
• COMMENTARY: Why didn't the so-called experts speak up sooner?
• Why do victims prolong the lie?

Similarities Among TelexFree, Zeek Rewards, and Ad Surf Daily

Telexfree ad, but where is your money really going?
(Photo credit: WwW.UrBaNiCaNo.NeT)

With TelexFree's fate in limbo, and people wondering what will happen, it helps to read some REAL HISTORICAL information of similar entities, rather than relying on badly translated and often, outright WRONG translations of news, some even picked up by small regional news outlets as if it's the real thing. Yes, I'm pointing at RTP on Madeira, whose reporter apparently was repeating GARBAGE mis-translated by TelexFree promoters rather than real court documents and decisions (which in turn, was picked up by TelexFree believers as if it's the truth).

Those of you who enjoy listening to sweet little lies, go ahead and tune out the truth here.

Those of you actually interested at the TRUTH should read BehindMLM.com, Ponzitracker.com, PatrickPretty.com or this blog here (through Google Translate if you don't read English) 

Now, what are common among 2 different ponzi schemes, and the alleged ponzi scheme TelexFree?

FACT: All three claimed to be selling something legitimate

• Ad Surf Daily (ASD) claims to sell internet ads
• Zeek Rewards (Zeek) claims to sell penny auction bids
• TelexFree (TF) claims to sell long distance minutes

FACT: All three claimed that if you give it money, it promised to give you back a lot more money over time

• ASD makes you a) buy 'ad package', and b) gives you 'rebates' (up to 2% per day) over X days
• Zeek makes you a) buy 'bids' and b) gives you 'profit share' (up to 1.5% per day) over 90 days
• TF makes you a) buy Adcentral packs and b) gives you $$$ for 52 weeks at up to 250% profit 

(NOTE: TF last year changed to giving away VOIP packs, which they will buy back from you)


FACT: All three claimed they are NOT investments because you have to do some inconsequential work to "qualify" for your money... if you give them money first.

ASD has you "watching" some video ads, while Zeek and TF have you POST internet text ads. They are inconsequential and worthless. They cannot possibly the reason you're paying that much. Thus, the logical reason is they want you for your money (i.e. that stuff you "buy").


FACT: All three has a nonsensical business model if you think about it

• ASD: How would you watching each other's ad magically grow revenue if there's no outside source of revenue? Who are buying these ads except EACH OTHER? 
• Zeek: Is the company actually making ENOUGH from penny auctions to be rolling in profit to pay out at 1.5% daily? And why pay people that amount for inconsequential work like posting ads when you can hire people in Asia to post that for pennies? (And in fact, some companies offer to post those ads for you for a few dollars a month)
• TelexFree: VOIP has far better providers like Skype, or other chat clients. Why use TelexFree? Why are they paying outrageous rates for inconsequential work?  (And in fact, some companies offer to post those ads for you for a few dollars a month)

But wait, there's more! A LOT MORE!

OTHER NEWS: Hong Kong Police Investigating BLGM, Zeek Rewards May Issue Refund in few months

Emblem of the Hong Kong Police Force (Photo credit: Wikipedia)

TelexFree grabbed all the headlines, but there are still other news in the Scam world:

Better Living Global Marketing (BLGM) Under Investigation in Hong Kong

According to eKantipur, a news website that specialize in Nepalese issues, Hong Kong police has launched an investigation with BLGM, along with KaChing and RSE Bid. RSE Bid has already closed and owner is in police custody, according to the news. Up to 2 BILLION Hong Kong dollars may have been lost to these 3 schemes from HK Nepalese, according to the article.

Please read the original article at  http://www.ekantipur.com/the-kathmandu-post/2014/05/04/money/hk-based-nepalis-at-risk-of-losing-rs-2b/262437.html

Thanks to BehindMLM for spotting the news first.


Zeek Receiver Promise Partial Refund Soon, will Sue Out-of-US Net Winners 

According to an announcement from the Zeek receiver website, the receiver has almost concluded sending out the notices of claims. All of the US "net winners" have been served with notice to pay up, and next comes the foreign "net winners"... who will be sued to the extent the receiver deems economical.

As the lawsuit will likely drag on for months or years, receiver expects to issue a partial payment on the funds collected thus far in a few months if not sooner. (Before end of summer).

Please see Receiver's website, zeekrewardsreceivership.com, for more details.