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.

Breaking News / Woo Files: Nu Skin Taiwan head accused of illegally importing medical devices

News from Taiwan via Malaysia, original Chinese and English translation provided. (Thanks to JusticeAlwaysLate for spreading this bit of news)

台灣．新北市18日訊）在馬來西亞、新加坡和汶萊都設有分公司的著名直銷公司美商如新華茂（NU SKIN）台灣總裁姜惠琳與多名幹部、高階直銷商，涉嫌明知產品“BODY SPA機”是未獲衛生機關核准輸入的醫療器材，仍在2012年間從香港帶1萬多套回台販售，獲利約1600多萬元台幣（下同．約210萬令吉）。新北地檢署昨依違反《藥事法》等罪嫌，起訴姜女等31人。

(Taiwan, Taipei Dec 18th) Well-known direct selling US company Nu Skin, with branches in Malaysia, Singapore, and Brunei, has its Taiwan CEO Huilin Jiang, along with several officers and high level members accused of knowing that the product "Body Spa machine" is an "not permitted as import" medical device, yet brought back over 10000 kits from Hong Kong for sale in Taiwan, profited over 16 million NTD (almost $500000 USD). Taipei Public Prosecutor's Office has now officially charged 31 people, including Ms. Jiang, with violations of "Drug Regulation Act". 

美商如新集團1984年在美國創立，以直銷方式銷售、製造美妝保養品，至今已跨足全球54個市場，1992年設立台灣分公司，2007年由姜惠琳接任台總裁，還曾贊助2013年的台北101跨年煙火。

Nu Skin is founded in the US in 1984 and operates via direct sales of cosmetics, and is now in 54 markets around the world. Taiwan branch was established in 1992, and Ms. Jiang took over as CEO in 2007. Nu Skin Taiwan was a sponsor of the 101 building New Years Fireworks and festivities 2013. 

全案起因於前年，一名林姓賣家在網路上販售號稱能緊緻肌膚的“BODY SPA機”，被檢舉未經核准，林到案供稱是向如新直銷商購買後，獲緩起訴。

The case started three years ago. A "Lin" advertised a machine online for sale called "Body Spa" that claimed to tighten muscle tone, and was investigated as the device is not legally permitted for sale without Taiwan FDA approval. Lin cooperated with investigators and said he got the machine from Nu Skin reps and had his case continued. 

不過檢調追查，發現衛生署早在2011年，就曾以未附安全證明文件等理由，禁止如新進口“臉部SPA機”，但姜惠琳仍在同年底，未申請主管機關核准，就另外核可BODY SPA機行銷策略，由如新的寰宇領袖、藍鑽級主任等高階直銷商，向下線會員推銷，稱可向海外預購BODY SPA機，然後趁集團在香港舉辦大中華區年會時領貨。

Further investigations show that the Taiwan FDA had denied Nu Skin's import of Body Spa back in 2011, due to various reasons including "no safety documents included". However, Ms. Jiang went ahead, later in 2011, and approved sales strategy of Body Spa kits by (Cosmo?) leaders, Blue Diamond level execs, and such highest level members to be promoted to lower level members, claiming that the high level execs can pre-pay for these new machines and stock them overseas, and everybody can pick up their stock when Nu Skin held their convention in Hong Kong later. 

USFIA Update: Turns out both the Chinese name and the English name may have been stolen

Today, MLMSkeptic takes a deep dive into the Interwebs, to dig up who is the REAL "American Mining" (it's NOT USFIA), by looking at various corporate listings as well as news from Asia to prove that the name "American Mining" was stolen by USFIA.

USFIA which supposedly stands for US Fine Investment Arts, was known as 美洲礦業／美洲矿业 in Chinese, which translates to American Mining. Chinese Commercial Yellow Pages (CCYP) shows that they are the same:

Screen cap of Google Search Results for 美洲礦業, confirms that USFIA
is 美洲礦業, which translates to American Mining

Furthermore, when the scam was active in China, it used the same logo and Chinese name. This is primary rep Ho Peng at such a seminar in Macao. Ho Peng was arrested in China in June 2014 along with 21 other promoters of USFIA 美洲矿业 in China.

Ho Peng, USFIA top rep in China, at a promo event in Macao April 2014.
Ho was arrested in June 2014 for his role in 美洲矿业 scam. 

And just to confirm, this always has been USFIA's logo. This is the current rendition of the logo:

"USFIA Inc. US Fine Investment Arts"

The address matches. This is indeed the USFIA in question. And this is a US Corporation registered in California by Steve Chen.

Profile for USFIA in California, which used Chinese name 美洲矿业
which means American Mining, even though USFIA
supposedly stands for "US Fine Investment Arts"

However, we do have a problem as there is already a 美洲礦業 in Shenzhen, China. As this is in China, the proper way to write it is 美洲矿业 (simplified Chinese).

And yes, they have a logo. This was from a talent wanted ad they posted earlier:

America Mine Holding Talent Wanted ad in China, short profile on company in Shenzhen, China

And this one is easy to verify via third party sources. Search for AA Mine Mexico brought up an official Mexican government listing of mining projects in Mexico with Foreign Capital:

Official Mexican Government website confirming AA Mine Holding is Chinese owned

Okay, sounds legitimate enough. Is there yet OTHER sources to prove this is the "real" 美洲矿业 , i.e America Mine Holding?

Absolutely!

The More Things Change, the More They Stay The Same: Scammer Joined More Scams

Apparently once you joined the seedier side of MLM (i.e. the pyramid and Ponzi scheme side), you get addicted to the easy money and you can't get out.

Kevin Trudeau apparently started cheating his way through life right after he finished high school, and quickly got into bank and credit card fraud.

Paul "ZeekRewards" Burks apparently operated multiple MLM businesses before shifting over to Ponzi scheme business model.

And this is hardly a Western practice, as apparently scammers are the same world over: it apparently is the only thing they know, once they had a taste of easy money.

Meet Yoshio Matsuura (松浦良夫), of Japan, and his link to at least two scams: Skybiz... and Interush.

BREAKING NEWS: BLGM busted by HKPD, 5 arrested, office locked and dark

According to multiple media reports, Better Living Global Marketing, which operates "Bidder's Paradise" has been raided by Hong Kong Police Commercial Crime Bureau and 5 were taken into custody. Office is locked, and inspectors have confiscated cases of documents as well as computers into evidence.

BLGM basically operates as a Hong Kong clone of Zeek Rewardsd ponzi scheme, with various "winners" paraded as "proof" that the auction works, and then claimed the auction brought in so much profit that it needs investors to expand. However, according to BehindMLM, there were cash flow problems that was first discovered in 2014.

Apple News HK reports:  (translated, original linked below)

HKPD Commercial Crime Bureau has broken up an auction website alleged of using pyramid selling technique to defraud people. The affected company’s Tsim Sai Tsui office is dark and locked yesterday, with many victims knocking on the door looking for redress. Five arrested have made bail and will await trial. The founder of website, Luke Teng, 55, is son of HK’s most famous Christian Church leader Jing-Hui Teng.

The affected company “Bidder’s Paradise Ltd” office at XingWengHua center is locked. Only two people were observed enter. When confronted, one said “I’m a relative of Luke Teng, and the company’s active for two years, and said “We don’t cheat people”, and claimed there will be a press conference later to explain everything, and otherwise, no comment.

BREAKING NEWS: SEC shuts down eAdGear (GoFunPlaces / GoFunRewards)

According to latest article on BehindMLM, eAdGear, the folks behind GoFunPlaces / GoFunRewwards are done... shut by SEC, with help of FBI, and authorities in Hong Kong, China, Canada, and United Kingdom.

This would mark the FOURTH Ponzi shut by SEC in this year alone (WCM, Zhunrize, and TelexFree)

See http://behindmlm.com/companies/sec-shuts-down-eadgear-gofunplaces-gofunrewards/

Is USANA in trouble? Probably. But It Started a LONG TIME ago.

You may or may not have heard USANA, but it's okay, it's not that important. They sell pills, lotions, and baby formulas. Yes, one of these items does not fit.

Any way, their high pressure tactics in China means they NEVER received a direct sales license in China, even though other companies like NuSkin and Amway have them.

So what do they do? They basically bought one... By buying out a company called BabyCare in China in 2010, and that company did get a direct sales license in China in 2011.

So by merging the product line a bit, USANA now sells baby formula... and gets a backdoor into China, mainly by making Chinese sellers pretending to be in Hong Kong.

Previously MLMSkeptic have pointed out that Hong Kong is often used by flaunt Mainland Chinese laws. Chinese citizens are encouraged to travel to Hong Kong to sign up for various pyramid selling schemes for outrageous promises of IPO riches. One such, Interush, was busted in Hong Kong last year.

Citron Research, which previously pointed out problems with NuSkin and China, has just dropped another bombshell... USANA may be next on the chopping block.

In the article referred to, USANA affiliates in China have been citing some very odd references... USANA founder Dr. Wentz's "Einstein Prize", and a "North American Nutritional Supplement Guide" by "MacWilliams.

Let us examine each one in a bit more detail.

News Update 13-JUL-2014: International Schemes on the Rise; World Ventures threatens critic

Been busy last week, so this will have to be a big news update. Remember folks, I link to the actual news items, not just random blog posts.

International Suspect Schemes on the Rise 

Recent scheme reviews on BehindMLM revealed that more and more schemes claim to be international, when most of the international presence are mere facades.

Mr. Link IT Solutions -- probable Ponzi investment scheme, claims to be IT exporter from Japan with office in China and Japan... AND Brazil (where it's really based in)

BrokerAds -- clone of BannerBroker ponzi scheme, with horrible broken English, and Alexa traffic pattern indicating it's probably ran out of Pakistan, even though the site's disclaimer seem to suggest a US connection.

LEO (Learn, Earn, Own) -- PO Box in Dubai UAE, Mail drop in Hong Kong, Regus Virtual office in Egypt and India, and more virtual office in other locations.

Beware when you run into one of these "international" companies. Do your due diligence.

Is Your Upline a Machiavellian? (i.e. Is S/he Exploiting You or Helping You?)

Niccolo Machiavelli
(Photo credit: Wikipedia)

A Machiavellian, named after Niccolo (ni-co-LO) Machiavelli, is a manipulative SOB (or DOB, just to keep it equal), who knows every button to push to make you do his (or her) bidding, through cunning and duplicity. Whether the one being used will be harmed is of no consequence to the "user", as long as the user derived benefit from it.

By default, any network marketing upline is a Machiavellian, because as long as you have joined (and bought a starter kit), your upline will have benefited. Whether you benefit from joining is completely irrelevant.

However, as in most cases, manipulation can be for good... or evil. Machiavelli himself was often portrayed as amoral manipulator, but that would be simplifying the issues too far into black and white. He was advocating the rulers to get things done, through manipulation if need be.

Think about it. Aren't modern laws trying to "push" you into behaving a certain way? Like the various "sin tax" on things like cigarettes and alcohol?

But in general governments don't enact laws to be evil. Scammers do. Let's assume for now we are talking about the EVIL machiavellians only.

Machiavellianism (manipulate others for one's own gain), along with Narcissism (extremely self-centered), and Psychopathy (have no empathy), are known as the "dark triad" of personality traits.


Origin of Machiavellianism in Scams

How do uplines "go bad"? Generally, it's because they were taught that way. Instead of learning how to sell (i.e marketing), they were taught "ass backwards" to emphasize the network instead. Apparently they were taught that as long as everybody they recruit (into the network) buy a 'starter kit' that counts as "sales".

But it's not sales. There were no sales to real customers. All sales are to affiliates / recruits.

And they will instill the SAME (and WRONG) attitude onto their downlines.

Chinese has a term for this: 層壓式傳銷 which literally means "level pressure style marketing", though commonly translated as "pyramid selling". The closest term in the West is "product-based pyramid scheme", where products are barely sold outside the network, but are mostly consumed within, but with money moving from the bottom up. At certain angles, this indeed resembles network marketing, but the key difference is in network marketing, the overall goal is to sell products to customers OUTSIDE the company. There are people outside, NOT affiliates, that are actively using the products, and people are selling to those customers. Product-based pyramid scheme, on the other hand, sells to its own affiliates, with little to no sales to outside customers. Some are known to claim to give away stocks or "points" that can be traded for stocks later... if you buy up a lot more products.

One such scheme in China went after the elderly, by telling them the company will do initial public offering (IPO) soon, must bring up sales figures, must look good, so IPO can go smoothly, and encouraged the affiliates / customers to buy up even more products (most of which are vastly overpriced) for the "virgin stocks" which supposedly can be traded for real stocks if IPO goes through. It never did, and the company was busted as pyramid selling. The seniors were manipulated into joining, with fraudulent product claims and income potentials, then with various manipulations to buy up even more stuff that they don't need. The same scenario was repeated last year, when another company was busted in Hong Kong, this time claiming that this US-based company is going to be very big if people buy up their "Internet Comm Suite" for 24000 HKD (about 3000 USD) a year to accumulate "points" to be traded for stock later, and company will buy back the stock for huge riches.

Both pyramid selling cases relied on people who have little understanding of IPO and stock market. But the same idea can be applied to almost any sort of potential profit. And it always involve the same 3 steps.

A machiavellian's "modus operandi" has 3 steps:

• Deception
• Manipulation
• Exploitation

Let us discuss each in turn.

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.