USFIA Raided by SEC, FBI, etc. on 29-SEP-2015, assets frozen, company seized

Multiple news sources, including onsite witnesses, have reported that FBI, SEC, and several other agencies have raided USFIA on 9/29/2015 and froze its assets, and appointed a receiver to take over.

San Gabriel Valley News

SGVT: U.S. Government seizes Arcadia company's assets in GemCoin fraud case (29-SEP-2015)

USFIA Update Continued

Previously, we have covered how Amkey exited China after series of scandals (product problems, repeated changes of comp plan, sudden reversal of "opening stores" plan)  and never received the direct sales license it needed to operate in China, leaving thousands of distributors stranded and disillusioned.

What was surprising though is Amkey continued to operate outside of China, and attracted a following in Singapore and nearby countries.

Amkey and AllianceNGN 

Despite Amkey quietly withdrawing from China, it apparently enjoyed several years of continued growth, or at least fast recruitment, in places such as Singapore, Malaysia, Taiwan, and places that speaks Chinese, mainly by adding something called "NGNTalk", an IP talk product for long distance calling without the long distance fees.

NGN Talk's parent company, Alliance NGN, has a very intriguing Chinese name 美国联邦环球通which literally translates to US Federal Global Talk. Really official sounding, isn't it?

Various Chinese fan websites claimed that "Alliance NGN" has received FCC and EC certification. Searching FCC website shows no such certification.

The NGNTalk fan sites (in Chinese, example here, and here), and blogs littered all over the place about NGNTalk hinted at the level of recruiting. The deeper the tree, the higher the share (up to 20% if you go beyond level 8) as well as direct reward for recruiting per head, and so on.

If you look at the main menu of the alliancengn.com, it was actively soliciting investments. Why else would it have "Investor Guide" on its website as a main menu item?

Alliance NGN website, courtesy of web designer MartinMa
Note the section above: Investor information

This was confirmed when one digs into Alliance NGN's innards, where you discover that you can sign up and "invest" and even trade and receive "guidance".

Alliance NGN backoffice screenshot courtesy of MartinMa
Apparently one can invest money into "brokerage accounts" at Alliance NGN, which
was supposed to be a "telecom" company... Hmmmm.... 

USFIA Update: Turns out USFIA itself is a reload scam... Successor to Amkey

Some readers have posed the question... How did Steve Chen got so big, involving possibly hundreds of millions of dollars?

The answer is... he's been at this for much longer than USFIA. USFIA (as either "American Royal 美洲富豪" or "American Mining 美洲礦業") was only his latest scheme.  His previous scheme was "Amkey 安旗" , which started in 2004, and was basically forced to exit China after repeated scandals, but continued in Asia for many more years.

So what exactly was Amkey? According to Amkey's website...

A leading nutritional supplement products corporation, Amkey, Inc, is the provider of the world’s only cell renewal and protection products with multiple international patents. We are a US company established in June 2003 headquartered in Los Angeles, California. We are an e-commerce network marketing company combining R&D, production and the sales of high-tech nutritional supplement products, skin care products and daily sundry items.

It claims to be a member of the Direct Selling Association (US), but searching through DSA.org as of today (27-SEP-2015) shows no such company listed.  Searching through news archives seems to indicate that Amkey was accepted by DSA in June 2005, but there is no press release about when it was ejected.

Current US address is the Steve Chen building... 135 E. Live Oak, Arcadia. But let's start from the very beginning...

Amkey in China

Amkey entered China in October 2004 by registering "Amkey (Beijing) Technology Development Ltd." 安旗（北京）科技发展有限公司 in a business park in Beijing. It apparently bought some factory in Shenzhen in 2005 and started selling its products after approval process. 

According to an expose penned by an ex-member (PDF of article in Chinese) , Amkey was guilty of multiple misrepresentations.

On 14-SEP-2005, Premier Hu Jintao, attending a UN meeting, apparently met with over 600 local who's-who in the Chinese community, and Steve Chen was apparently among the crowd.

This was immediately plastered all over the Amkey news channels as "Premier Hu and Wife Welcomed By Amkey US CEO, Chinese-American Elite Merchant Council Chairman Steve Chen", claiming that 7 members of the company representing the three branches of Amkey (US, Beijing, and Hong Kong) to attend "US-China CEO Summit", claiming only the top 50 CEOs of the world can attend and they got 3 out of the 50 seats.

So what's the reality? According to the expose writer, Amkey attended a "US China Commerce Summit" at the Waldorf, not the Top 50 CEO summit. As for "welcomed Premier Hu"? A photo of Hu's motorcade driving past an Amkey banner streamed along the route was the "proof" provided by Amkey's website.

Another bout of hilarity ensued regarding the 2004 "Xiamen Direct Sales Legislation Proposal Seminar" 厦门直销立法座谈会.  Twenty-two companies were invited to talk with Chinese legislators about what sort of legislations and regulations the direct sales industry needs in China. Amkey, who was NOT among the 22 invited companies, falsely claimed to be among the attendees by inflating the company count to 23 (link in Chinese). This was not done by affiliates, but by Amkey corporate website.  The officials were not amused. Furthermore, the only time Amkey appeared in the news is it was on a BLACKLIST of 20 companies that was investigated for possible pyramid schemes.

Scam Tactics: Two-Face, revisited

Previously MLMSkeptic has covered "two-face", i.e. present two separate distinctive personalities to different audiences, as an Herbalife tactic.  Tell government and Wall Street 72% of participants do NOT want income, while holding a convention cheering on those who did profit and entice those who haven't joined with prospects of income.

But there is an even simpler version of two-face... present someone NOT as who they are, by simply dressing them up as something else.

And there's an update later about how Gemcoin / USFIA is being condemned in Vietnam... but first...

Those of you who keep up with the USFIA / Gemcoin developments should recognize this guy (photo from May 29th 2015 USFIA event):

Live ammo shooting coach Security Guard Chang (Zhang, actually) Right 5, photo with fans

With a bit of help from the newspaper ChineseDailyUSA (owned by Sho Tay of Arcadia, BTW) we've determined the guard's surname is Zhang (yes, I misspelled it in the translation).

And with a different photo, where the guard is now... "international jewelry appraiser", was identified as John Zhang.

Life412.com / Professional Gem Appraiser John Zhang (Right 2), Company VP Leonard S. Johnson (Right 3)
international market president Alicia Gesier (Right 4)  and Toronto International Market President eric Wu (Right 7)

If you're wondering why did the translation differ... I'm just going with original material, man.

But recently I came across a different coverage of the same Toronto event...

torcn.com / USFIA VP Leonard S. Johnson announcing USFIA Currency Fund Gemcoin's formal release and introducing
Alliance Financial Group (AFG) background and its affiliate USFIA Currency Fund
the guy on the right is, according to placard: John Zhang, international jewelry appraiser

So we have his full name, "John Zhang", and a search at Bureau of Security and Investigative Services, who licenses security guards and investigators, and you get "ZHANG JOHN BAO PING" of West Covina, CA.

The logical conclusion is the "jewelry appraiser" and "security guard" are the same person: the security guard was dressed up as "jewelry appraiser" for the Toronto event, and possibly for the other events in various Chinatowns as well.

That is two-face, at its most basic: present one face, the guard face, to the locals, then at where people don't know you, you can be other people, like "appraiser".

And the Toronto event and its coverage belies the recent "denial" of USFIA, where they claimed they don't even operate Gemcoin.

Scam Tactic: Speak in Half-truths, or how Vemma is trying to create value out of bull****.

Speaking in half truths is the best way to scam. You sound as if you are telling the truth, esp. if that's all the truth you know. You can't be lying if you don't even know the other half, right?

That's why you should fact-check any PR claims, esp. those without any links for you to verify the claims, and if the evidence themselves need to be fact-checked.

Let's take one recent example, when a Vemma fan (what I'd refer to as a Vembot) posted basically a cut-n-paste PR speech "how dare you compare Verve to Red Bull". Okay, I made up that title, but that is accurate.  His words in blue, my comment will be in red.

For those trying to do a cost comparison with Red Bull, you are obviously missing the entire concept of Vemma.

Oh, I think we understand you all too well. It is you who don't understand Vemma... 

The clinically studied nutritional supplement Vemma cost about $2.00 per serving, if you purchased the stand alone Vemma product. 

But did you actually read the two "clinical studies"? (NOTE 1)

Verve has the same 2 ounces of Vemma, plus the components of the energy drink. Yes the price is about $2.80 a can, but $2.00 is the Vemma supplement. So the energy drink component is really only $.83.

You set your own prices. You can say it's worth $1000 if you'd like. There's nothing to compare it to. In fact, there's not even any proof that mangosteen has any benefit on the body. But more on that later. (NOTE 2)

You show me where red bull has 12 vitamins, 63 minerals, mangosteen, aloe vera and green tea. Show me where Red Bull paid 250000 to run full clinical studies to see exactly what happened in your blood after drinking it.

You show me what those "63 minerals" are, and what effect they have on the body. Show me how ECGC is not harmful to the body. Show me how two little studies in China, on self-reported results prove "what happened in blood". (NOTE 3 again)  

Until you can show me that trying to compare the to is like comparing a Ford Fiesta to a Ford Mustang. They are both Fords (energy drinks), but they are not the same thing and they dont cost the same thing.

Vemma is no-name energy drink with an unproven secret ingredient. The analogy is bull****. 

Now let's look at the footnotes...

Scam Tactics: Using Cultural Preconceptions and Stereotypes for Affinity Scam

As the Gemcoin scam reached national stage, a video surfaced recently of Steve Chen and company throwing some sort of USFIA Club party at a McMansion owned by one of his real estate companies (AHome) ostensibly as some sort of reward for "top performing" USFIA participants.

During the event, Steve Chen was wearing a light blue polo with some sort of a badge on left breast, a photo badge clipped on the right breast, and was wearing a gunbelt with holster (and gun), with some sort of shield/badge on the belt in public display. The caption identified him as chairman, USFIA club.  (lit: US Royal Club)

Vidcap from video, red caption by Oz, BehindMLM.com
white caption says: USFIA Club Chairman

A later picture shows the gun and the rest, belt shield, shoulder patch, and photo ID badge and its close-up, where it clearly says: GREAT WALL, photo, badge, name, number, date, and "Public Safety".

Photo of Steve Chen cutting ribbon of his own place, close up of badge
brown and green markup by Oz, behindmlm.com,
Steve Chen is obviously dressed as security guard, ID'ed so by badge

Search of LA Area for "Great Wall" yielded a company called Great Wall Security Training Center, in San Gabriel, CA, not far from Arcadia.

Great Wall Security Training Center banner from their own website

Where, as you can guess, they train security guards, including armed guards, gun permits, pepper spray permits, billy club permits, body guard permit, concealed carry permit, and other related stuff.

Why did a chairman demote himself to security guard just to carry a gun around? On a grand-opening ceremony of his own club? For that, you have to understand Chinese culture.

Will US Recognize a new mental disorder: Cult Sales Addiction?

While researching a different topic, I came across this interesting article in Changsa, China, where the local hospital had to treat at least two cases of a mental disorder that was previously unrecognized: addiction to cult sales.

The story can be read here in Chinese, but I'll give you the gist of it:

Hunan Province 2nd People's Hospital Addiction Treatment Center back in December 2014 had to treat a patient who was apparently brainwashed by a cult sales (pyramid sales / pyramid scheme ) organization. The victim, 27-yr old female, lost her job in October 2014 when her company lost the product distributorship, and was recruited by a friend to go to Nanning where supposedly things are better. About two months later, she called home and want her mom to come along and make lots of money. Her mom went for a visit, and realized victim was in the clutches of a pyramid sales organization and had been brainwashed for two months and is totally under their control, with full personality shift.

(article continues after this break)