The Woo Files: MLM Viagra Coffee (no, I'm not kidding, and it's illegal)

There are all sorts of "fortified" coffee, containing all sorts of stuff that's allegedly good for you, from Asian mushrooms (Lingzhi) to various uber(woo) fruits like Acai berries, goji berries, to various forms of vitamins. So it's really no surprise when someone made coffee with allegedly "all natural herbs" to raise your libido, eh? 

Meet "Magic Power Coffee", world's first (and last?) aphrodisiac coffee.

Now, you may say, this is cute and stuff, but what does it have to do with MLM? Ah, but look at the words "income opportunity". Yes, this is a MLM.

Quoting from a recruitment website :

Start Your Magic Power Home Business Today Start as a Standard Associate for only $70.00 plus a one time $15.00 administration fee. Quickly break even, operate for FREE, and build your Home Based Business part time until it exceeds your primary income source

Furthermore:

The Magic Power Coffee Home Business Opportunity provides multiple income streams. They are covered below.

Personal Enrollments:
Each time a member joins the home business opportunity via your invitation you are awarded $15.00 to $45.00 depending upon their membership level... To keep it simple and free, enroll three.

Matrix:
When you introduce and invite others to become members they too establish their own Home Business. You are accredited through a 3 X 10 matrix system for those who fall within the three positions below you. ...

Matching Bonuses:
Matrix Bonuses are percentage matched down 6 generations of each individually sponsored member

Retail Sales:
Retail sales of Magic Power Coffee and the Magic Power Product line generate commissions...

Leadership Pool:
3% of the entire company product are sales set aside and distributed proportionately as you reach certain milestones. The Tour will explain this best, but the award amounts are substantial.

Thus, there is no doubt this is MLM, right? Except the product is ILLEGAL, as it is NOT all natural, as it claimed.

News Update 22-AUG-2014: More TelexFree Lawsuits, Zeek Lawsuits, and Phil Ming Xu (WCM) lawsuits

A lot of developments regarding various closed ponzi schemes in recent months...

According to an expert tracking ponzi scheme, a new Ponzi scheme was discovered every 5 days in the US. That's right, every five days, just during the first 6 months in 2014, with over 1 BILLION dollars in potential losses.

But here's some news...


Court Approves Zeek Receiver to Sue International Winners

US Federal Judge overseeing the receivership of Zeek Rewards has approved the receiver's request to start suing "net winners" who do not reside in the United States. Previously, receiver have already sued most net winners in the US who has gained 1000 dollars or more from Zeek Rewards. Many have already settled for a lesser amount, though a few notable exceptions are the really top winners, who have gained anywhere from 500K to well over a million dollars from Zeek.

It is worth noting that several prior top promoters of Zeek has indeed fled the US to various countries, including the Dominican Republic and the Philippines.

Speaking of foreign countries...


Federal Prosecutors Allege Extremely Complex International Fraud Regarding TelexFree

According to documents filed with Federal court overseeing the TelexFree case, Federal prosecutors asked the judge to designate the case as "complex case" which will make it exempt from the "Speedy Trials Act" that requires the indicted defendant to be tried within 70 days, because there are significant portions of fraud linked to Brazil and will require foreign investigation / testimony, and subpoenas.

Prosecutors asserted that they have seized 400 TERAbytes of data spanning 46 servers, 26 separate computers from TelexFree and 3 more from grand jury subpoenas containing yet more records.  There are total of 185 grand jury subpoenas issued for evidence related to TelexFree such as business records. They have not yet compiled catalog of existing evidence, and there are strong possibilities that they will need to travel to Brazil to interview yet more witnesses and/or gather more evidence there. Thus, there's no way this can be done in less than 70 days.

Judge has yet to rule on this motion.

In related TelexFree news:

An 2014 Update on AiYellow: Is this thing for real or for grins?

Recently, there seems to be a resurgence of comments, on AiYellow, probably because my previous blog post on AiYellow is somehow now #3 on Google search when you search for AiYellow, as of today, 18-AUG-2014.

Wow, how did that blogpost got to #3 search for AiYellow?

This, inevitably, has drawn in various defenders of AiYellow, who copy-paste a bunch of marketing material, without understanding the CONCERNS I had brought up almost two years ago regarding the legality and utility of AiYellow.

So far, it seems nothing has changed regarding its business practices, and the products are being marketed with the wrong emphasis, with its utility (i.e. how effective it can be) in further doubt.

Let's study one aspect of the problem... "Alexa Ratings". Feel free to check it yourself, as I can only offer you a snapshot of the information as I see them today, 18-AUG-2014.

Alexa rating for AiYellow can be found here: http://www.alexa.com/siteinfo/aiyellow.com  It's the 5th most popular link regarding AiYellow, as shown by Google search above. You should see something like this:

Alexa Overview of AiYellow.com, part 1, red lines and words are my comments

Global rank 7117th, yet in South Africa 135th. Why is it so much more popular in South Africa than elsewhere where global rank has dropped 2000 places in last 3 months? Let's keep looking.

Why is AiYellow more popular in South Africa and Thailand,
than where it started: Argentina? Colombia? 

The audience geography is strange. Normally if a website started in a particular country its countrymen would have embraced it first, so it should be more popular at home than abroad. AiYellow is exactly the opposite: it's more popular in South Africa and Thailand than its home in Argentina. This is a very weird growth pattern, keep that in mind while we keep looking.

Only 15% of AiYellow's visitors came from search engines
(but there's an upward trend)

According to Alexa, only 15% of visits to AiYellow came from search engines, and the most popular search terms seem to be South African. However, most visits seem to have came from the parent company, AmarillasInternet.com.

But it is where the visitors actually go that is the most interesting:

MLM Basics: Why are there so many names for MLM?

Have you ever wondered why are there so many different names for multi-level marketing? Here are most of them:

• 

  Network marketing? Multi-level marketing?
  Home-based Franchising? Direct Sales?
  Concentric Marketing? Affiliate Marketing?
  Referral Marketing? Inline Marketing?
  WTFIsIt Marketing?
  (Photo credit: Wikipedia)

  Multi-level marketing, the main term
• Network marketing (most often used alternative)
• Home-based Business Franchising -- WARNING: franchising is NOT multi-level marketing
• Direct sales -- selling direct to consumers, related to but NOT equivalent to MLM
• Affiliate Marketing -- now used by Vemma, often plagued by fraud
• Seller-Assisted Marketing -- mostly a "business opportunity" scam
• Referral Marketing / sales -- marketing via word of mouth; some forms may be illegal
• Dual Marketing / Dual-Level Marketing -- mainly used by Mary Kay, still MLM
• Concentric Marketing -- used by convicted pyramid scheme Burnlounge, replaced "levels" with "circles", but otherwise, the same as MLM
• Consumer Direct Marketing -- the consumer is doing the marketing, potentially illegal if recruitment heavy, as it becomes recruiters recruiting more recruiters. 
• Inline Marketing -- trademarked by "Nutraceuticals Inc", it's still MLM

There are probably a few more I missed. If you spot some new ones not on this list, as a something-marketing, feel free to let me know via the comments.

Any way, why are there so many fancy names for the same thing?  Fraud experts, such as Tracy Coenen say this is an attempt to obfuscate and distract from the bad reputation multi-level marketing had picked up over the decades it had been in existence. However, I think this is also a symptom of how the decentralized nature of MLM became a sin, not a virtue. People are just appropriating terms that sounds SOMEWHAT similar to multi-level marketing, and in some cases, inventing them out of thin air.

First, let us define multi-level marketing... a marketing strategy where the sales force is compensated on multiple levels... direct sales profit, and portion of sales profit achieved by other salespeople they recruited (downlines). Remember, MLM = direct sales + commission based on downline sales.

But first, we have to clear up a few myths...

Breaking News: Brazilian TelexFree promoter shot, one killed; Peruvia TelexFree promoter arrested

Peruvian Arrested at Airport for TelexFree Fraud

Peruvian alleged fraudster who recruit people into the TelexFree ponzi scheme was caught at the airport airline counter by Peruvian authorities, according to trome.pe and taken into custody.

Detectives of Peruvian Judicial Police arrested Yoel Alexander Sandoval Mamani (age 24), better known as "Uncle Manrique of Cusco" at the airport. When confronted, he initially denied being the person sought for million P$ fraud, and was carrying a hidden bag with six thousand P$ "that were products of the fraud that was Telexfree International". Then he confessed that he intended to go to Brazil "to safeguard his financial integrity" after one of his fraud accomplices was arrested in Cusco.

http://trome.pe/actualidad/callao-detienen-sujeto-acusado-realizar-estafas-internet-2019202


Ambush in Brazil over TelexFree losses

A man was ambushed in Brazil when walking to work on Wednesday (13th) for his graveyard shift (10PM) and shot through the head. Police stated this was due to the victim having enticed the shooter previously to put 3500 R$ into the TelexFree fraud. The alleged shooter is still at large.

Scam Post-Mortem: TelexFree location lies confirmed by authorities

Back in July 2013, LONG before TelexFree got raided (April 2014) by DHS, FBI, etc. MLMSkeptic had warned the readers about how TelexFree office is a virtual office, and its co-owner, James Merrill, is allowing misinformation, such as "TelexFree own the whole building" to be perpetuated by its members in multiple languages on multiple continents.

Today brings an end to that chapter of the TelexFree lie; the bankruptcy trustee has terminated the $5944 per month lease of the TelexFree office, which only started January 2014 and is scheduled to run through March 2015. By forfeiting the deposit and a portion of the furnishings, the lease has been terminated, saving tens of thousands of dollars that can be repatriated to the victims of TelexFree.

In other words, it took another 5 MONTHS (July to December 2013) of constant pressure by "promoters" to convince TelexFree that they need a "real" office rather than the virtual one they had been touting. And they are willing to pay THOUSANDS of dollars a month just to keep up appearances, with office staff that does nothing except to smile and look busy, and there were only 7 of them for a company that allegedly did 1 billion dollars of business a year, according to themselves.

It is further alleged that in 2013, TelexFree reported sales of $1.016 billion, while known sales of the TelexFree VoIP product represented less than 0.1 percent of TelexFree’s total revenues.  --- FBI press release 

But TelexFree — whom some affiliates say is a $1 billion company with a VOIP product — has only seven employees at its Marlborough office, according to regulatory filings in Tennessee. These employees work in “administration, sales and marketing, accounting, and operations positions.”  -- PatrickPretty.com

That can't be legit.

But wait, there's more!

Scam Psychology: The illusion of explanatory depth (especially about MLM)

One phenomenon that initially puzzled the MLMSkeptic is the SEVERE LACK OF UNDERSTANDING by most MLM participants about their own industry. They seem to be completely unaware of the facts, and instead believe in misinformation, such as

• Harvard Business School teaches/endorses MLM (NO THEY DON'T!)
• MLM / Network Marketing Created the Most Millionaires (NO THEY DIDN'T!)
• Having a product means the scheme cannot be a pyramid scheme (WRONG!)

And many more.

It is as if many participants are relying on... "folk wisdom" passed down by their uplines, who are passing misinformation, whether by design or negligence, leading to a game of "telephone" where after a few generations / levels there are no facts left, only misinformation.

That's when I discovered yet another cognitive bias... "the illusion of explanatory depth".

Basically, most people only *think* they know something. This is termed "feeling of knowing" by psychologists, or "FOK". They only follow correlations, and form their own idea about what caused what, even though those can be elaborate ruses or illusions designed to trick them. They actually have NO IDEA how whatever they observed actually works.

Here's one example. Do you know how bicycles work? Are you sure? (Those who can look at a bicycle or ride a bike several times a week can probably skip this test)  Without looking it up, draw the bicycle frame, wheels, where are the pedals, and where does the chain go.

Go ahead, draw it. When ready, click "continue".