Why Do Fraudsters Think They Can Get Away With It: Part 2 the juice vendor

It was only yesterday 15-JUL-2014 when FTC announced a major settlement with Trivita for Trivita's false and unsubstantiated claims regarding their "Nopalea" drink made from Nopales cactus, yet another superfruit fad (remember noni, magosteen, and acai berry?)  Trivita, without admitting fault, agrees to cough up 3.5 million refund for not having enough science to back up their claims, and not disclosing many of the testimonials in their ads are actually from affiliates (who have financial interest in seeing the product succeed).

But here's the saddest part... Trivita was warned back in 2011 regarding the SAME PROBLEMS, and apparently chose to IGNORE THE WARNING!

They think they can get away with it, and they almost did... until the FTC slapped them.

Read on for details.

News Update 15-JUL-2014: Trivita Settle with FTC; SEC oppose Merrill access to 4 million; TelexFree Trustee issued more subpoenas

Seal of the United States
Federal Trade Commission.
(Photo credit: Wikipedia)

Remember, readers: VERIFY the information for yourself. If they don't include links, their news probably cannot be trusted. Even if they include links, make sure it's to a reputable website like news websites and such.


Trivita Settle with FTC?

According to leaked letter to its affiliates, Trivita has settled a demand from Federal Trade Commission against its alleged false health claims regarding its Nopalea related products. Nopalea, also known as prickly pear (a type of cactus), is reputed to have some healing properties and is often pushed by so-called alternative medicine proponents in the same manner as prior fads such as noni, mangosteen, and acai berry products.

Report by Courthouse news showed that FTC filed the demand on July 11th. However, this did not seem to have received any news coverage.  http://www.courthousenews.com/2014/07/11/69432.htm

According to leaked letter as published on BehindMLM (and thus far, unverified), the settlement involves stop making false claims, and paying a large fine with no admission of wrongdoing and no stop of sales of such products (provided no further misleading claims are made). All affiliates must acknowledge the new restrictions or their commission will be withheld pending acknowledgement.

EDIT: FTC's own press release just dropped:

http://www.ftc.gov/news-events/press-releases/2014/07/cactus-juice-marketers-pay-35-million-refunds-consumers-deceptive


SEC opposes Merrill's "motion" to release 4 million for "expenses"

James Merrill, co-owner of TelexFree, out on bail, had previously filed a motion to release over 4 million dollars in one of the frozen accounts to pay for his legal defense. And SEC has filed an answer to that, explaining that James Merrill have plenty of assets available including accounts of several hundred thousand dollars, not to mention possible other sources (one of which is the house he used as bond to get himself out of jail). Why was he asking for 4 million in possibly tainted funds from alleged Ponzi scheme TelexFree? And since he haven't been indicted (merely charged), how much is his lawyers charging to require that much money, beyond what he has now?

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.

Anti-Scam: Rough Guide to Spotting Shady Opportunities, Part 2 of 3

This guide is an adaptation of "A Rough Guide to Spotting Bad Science" by "Compound Interest", converted for spotting "shady opportunities". For length reasons, this is presented in 3 parts. This is part 2 of 3.

A Rough Guide To Spotting Shady Opportunities  (part 2 of 3)

Shady Opportunities are out there, waiting to take your money on promises of fabulous income... if you hand over your money first. There are twelve signs. Obviously a shady opportunity may not have all the signs, but the more signs you spot, the more shady the opportunity is.

5) Speculative Language

Speculations are not facts, so if the statement contains "weasel words" like "may", "could", "might", and so on, then it's likely to be speculation, rather than conclusion.

You can often spot this when a "lotions and potions" company presents some study that "sort of" proves their product works. But this can also apply to income claims, which is usually frowned upon.

For example, a certain MLM nutritional supplement company's entire product line is based on this speculation published in "Medical Hypotheses (2002)"

...Based on a review of the literature we propose the hypothesis that in situ mobilization of stem cells from the bone marrow and their migration to various tissues is a normal physiological process of regeneration and repair and that therapeutic benefits can be generated with less invasive regimens than the removal and re-injection of stem cells, through the stimulation of normal stem cell migration. We further propose that effort should be made to identify natural compounds characterized by their ability to augment this normal process of mobilization and re-colonization of bone marrow stem cells for the potential treatment of various degenerative diseases. 

If you can't read medical jargon, what it says is "Stem cells are cool. We think stem cells gets into the blood and travel around the body to where its needed to help healing. Maybe we can find a natural something that'll make the body produce more stem cells."

That's right, this is a HYPOTHESIS. There is no proof that having more "loose" stem cells in your body would improve your health (remember, HYPOTHESIS), much less any compound that can do so.

Doesn't stop this MLM company from making products with such claims, of course. In fact, some of the principals in this company where previously sued (under a different company name) in Texas and lost a false advertising suit... also involving stem cells. That company used blue-green algae, some of which are POISONOUS (see "microcystins")  And it seems this particular company is still using similar formulas.

The company may sound confident in stating such things on their advertising materials. Look beyond the marketing material and look at the original research their products are based on. You may be surprised.

Conversely, if a company "guarantees" something, look for caveats and fine print. 

Anti-Scam: Rough Guide to Spotting Shady Opportunities, Part 1 of 3.

This guide is an adaptation of "A Rough Guide to Spotting Bad Science" by "Compound Interest", converted for spotting "shady opportunities". For length reasons, this is presented in 3 parts. This is part 1 of 3.

A Rough Guide To Spotting Shady Opportunities  (part 1 of 3)

Shady Opportunities are out there, waiting to take your money on promises of fabulous income... if you hand over your money first. There are twelve signs. Obviously a shady opportunity may not have all the signs, but the more signs you spot, the more shady the opportunity is.

1) Sensationalized Headlines

Headlines are often click bait or link bait, such as "everyone makes money" or "How to turn $289 into $1040 guaranteed"

As Carl Sagan said, "extraordinary claim requires extraordinary evidence". Don't believe the headlines, even if they are made/repeated by people you trust. Remember, they could have been duped. If they don't bother asking for extraordinary evidence, then you cannot trust their judgement on this specific matter.

2) Misinterpreted results

Nothing beats DIRECT access to the data. If you listen to someone's pitch, you are listening to his or her version of what s/he is telling you, which may be just a sales pitch with certain amount of untruth... truth as s/he know it, or the actual truth. You don't know which one it is, or even how much of each.

Without the actual data, any interpretation is just that... an interpretation. You may look at the same data and reach a completely different conclusion.  Much like these two gents used the same data and came to opposite conclusions.

BREAKING NEWS: Zeek Receiver sued Kevin Grimes and Howard Kaplan for negligence, wants $100 million EACH for damages

According to documents filed by Zeek Rewards receiver Ken Bell with the court, he intends to file lawsuit against both Kevin Grimes, head of "Grimes and Reese LLC", and Howard Kaplan, renowned tax expert, for legal malpractice in their role to prop up Zeek Rewards, as it is clearly a ponzi scheme. Receiver is seeking over 100 million in damages against each defendant.

According to Zeek receiver Ken Bell, both Grimes and Kaplan should have know that the business model as presented by Zeek cannot possibly to be true based on their own expertise in their own respective areas, yet both allowed their name be used in association with Zeek Rewards and its parent company, Rex Venture Group.

Grimes created a "compliance program" for Zeek affiliates i.e. what can be said and what cannot. One such "certificate of completion" is reproduced below, from court document filed back in 2012 as part of SEC complaint against Zeek.

Scam Psychology: Did they really think they can get away with it? They sure did!

Sometimes, the actions of certain... perpetrators are puzzling, at least to people from the outside looking in. If they had not gone back for that one last thing, they may have gotten away scot free, but because they felt they can do it, they now face much much more trouble than if they had not.

One such incident, which had nothing to do with scam, was published at Jalopnik recently. Basically, a motorcyclist at Golden Gate Bridge did not like the camera crew from Channel 4 News there filming. So the guy made an illegal U-turn, went down the ONRAMP the wrong way, parked his bike, just to come have a "don't film me!" moment with the reporter. Which of course, only lead to even MORE filming. The entire sequence was caught by surveillance camera at the control center, who then summon Golden Gate Bridge Patrol, who detained the gentleman for questioning, and upon finding that the bike is UNREGISTERED, and the guy doesn't even have a motorcycle license (he has a car driver license) California Highway Patrol was summoned and the bike was towed and the guy have to find some other way home.

The guy seriously thought he can make illegal U-turn, drive the wrong way down on-ramp, and have no consequences? Nah.


Alleged crooks do things just as stupid, and sometimes, much worse.

Those who keep up with the Scamworld should recall that when TelexFree in Boston was raided by law enforcement on April 16th, 2014, the day after they tried to declare bankruptcy in Las Vegas (on the other side of the country). DURING THE RAID, their Chief Financial Officer Joe H. Craft tried to retrieve his bag containing his laptop and over 36 MILLION in cashier's checks, all of which are company money. When accosted by a Sheriff's Deputy, Craft claimed he was a bankruptcy consultant and all that is his personal property. He was ordered to hand over the bag, NOTHING leaves, and that's when the cashier's checks were discovered.

The guy seriously thought he can lie to law enforcement, and try to leave with over $36 million in cashier's checks, when there's a Federal and State police raid in progress?

Ah, but things can get worse. In at least two more cases, two potential idiots seriously thought they can get paid more when they may actually OWE money.