Archives: 2nd Quarter 2002
April, May, June
9th FEDERAL COURT OF APPEALS <> MLMWATCHDOG WINS!
27 June 2002 - One nation under God! 9th Court > strike out God! Back in 1996 I wrote an article attacking the 9th Federal Court of Appeals as being Judicial Nutcases! This was when they issued some really dumb "opinions" about MLM in the Ominitrition case. One of their ideas in the opinion was that no commissons should be paid unless MLM items were sold at proven retail! I took heavy flak over that article. Not being arrogant, but as usual I have been proved right! The 9th is Nuts! Proven now to God and everybody! Ed. Note: Really Big Smile!!!!!
FORBES MAGAZINE = SCHIZOPHRENIA!
26 June 2002 - Let's see how nutty the journalistic world gets! Forbes magazine has listed PrePaid Legal (PPL) as best small company in the top 200 in the U.S. for like 5 years! Now a Forbes writer just did an article nuking PPL! Gee no wonder the corporate business world is ethically going NUTS with Enron, Worldcom and other ethically impaired corporations! The business journalists certainly have no sense of "right"! You don't know who to believe! Now the venerable (using the word very loosely) Forbes magazine has "loose marbles!" Does anybody talk to each other in the east? Ed Note: (1) Does Forbes have a senior Editor? (2) I have to do more on this - it was really trashy tabloid journalism!
WELLNESS INTERNATIONAL NETWORK SETS RECORDS
25 June 2002 - In 1997, in the MLM Insider WatchDog, I wrote that WIN set a record for frontend loading at $325k. Now various court cases filed show that they have moved up to are you ready for this? $480,000! No, that's not sales volume. That is what WIN has been hitting suckers for individually! World record for MLM company front loads! Bill Gouldd and Equinox move over for top front loaders in history. One equal point between Equinox and WIN seems to be their return policies! Poor to bad! More details coming on the TOP money taker ever in the MLM Industry!
CONCORDE GROUP TO CRASH?
June 25 2002 More complaints coming in you can only promise to build downlines for so many people for so long. Mathematical probabilities catch up with you! The problem is that some people don't understand that this is a distributor created feeder going to up to Life Force. Life Force, until recently, did not know what what effect these feeder programs gone amuck could have. They are now taking action including threatening termination if the feeders create problems. Good!
GLOBAL PROSPERITY TAX EVADERS GO TO JAIL
June 2002 - The problem is these scumbags are not going to the chair!. They murdered (suicide) people by stealing their money in the worst illegal pyramid Aussie two-up scams ever in existence. There are others (innocent) who were suckered into abusive offshore trusts who now find they are going to prison for tax evasion. To find out the names of some of the worst, sick, theiving, crooked, slimy,dregs of society. Full story about the Anderson Cult here: TAX EVASION and MACHINE GUNS
NOURISH THE CHILDREN QUESTIONS & FUROR
13 June 2002 - There are questions about the Non-disclosures of Nourish The Children (NTC) Sponsored by Nuskin Enterprises. The following needs addressed immediately:
1. What percentage of the $40 for food goes to commissions?
2. What percentage is NSE charging for overhead and operations on the $40?
3. What percentage is NSE taking for profit on the $40?
4. What percentage of the $40 actually goes to buying food?
5. Then the last question is how much profit is NSE making from their subsidiary First Harvest that is selling the food to NTC Distributors for them to donate to hungry kids?
A stir was caused when people found out to sign into the NTC program that they had to go to the Big Planet website. This was in bad taste for those that wanted to join NTC but not anything else. Ed. Note: Word on the street is that NTC members will have to qualify for commissions by purchasing NuSkin products. Leaders have been told to push/promote Nuskin, Pharmanex and Big Planet products. Having people sign up for to buy products for NTC via the Big Planet website certainly gives these rumors weight. That was not smart! Here NSE had the chance to be Philanthropists of the decade and become a moral legend for the MLM industry. Now they screwed it! Phil Piccolo's hype and full page add in Money Makers Monthly isn't helping their cause and credibility either! Make $5 million he says! Nothing like earnings claims! Unhappy new leaders are bombarding me with complaints about the non-responsive NSE regime and Phil Piccolo team! What a partnership!
SHARE THE WEALTH 2000 ISN'T!
11 June 2002 - First to bait the California Attorney General, Share The Wealth 2000 (STW) was hitting people for $1295. Then to make sure they got complaints they used a scunge-bucket Australian Aussie 2-up. Then they didn't ship product. Then according to current complaints they aren't paying checks. Ed. Note: Not much chance of peaceful survival here!
USN1 CLEANS UP ACT
June 2002 - Due to Online watchdogs USN1 (the Internet kiosk company) hired a top MLM lawyer, changed its comp plan and has cleaned up its act. They even learned the words ponzi = securities violation. Will the hype "pay us we will build your downline" recruiters stay? Doubtful! Ed Note: See previous articles on One Qwest and USN1.
NUSKIN - ANOTHER DIVISIONAL DIVERSIFICATION (NTC)
6 June 2002 Nuskin (NSE) bought their Utah Neighbor "Nourish The World." Out of the merger they renamed the company that produces concentrated food packs "Nourish The Children (NTC)." This is Nuskins 4th Diversification from their core business. They have done "Big Planet, IDN, Pharmanex, a financial program (flop), and now NTC. They are the most progressive of all MLM's in this arena. The WatchDog had tax questions answered by NSE Corporate, "It is up to the end charitable organization to issue tax statements to distributors." This is a good start. ED Note: In the past this was a bone of contention with authorities concerning charitable MLM's (FTC vs. Mentor Network) that attracted "lightening" attention.
NEW VISION ATTACKS ROYAL BODY CARE
June 2002 - New Vision has just launched a war on Royal Body Care. Patrick Flanagan had a contract with Royal Body Care for their exclusive use of his product. Royal Body Care is suing him (Flanagan) for violating the contract. Ed Note: Now the fight between Flanagan and Lee Lorenzen back in '92-'93 over who invented the crystal technology makes more sense! 2nd Ed. Note:
There is enough conflict in the MLM arena. Ed Note: What a thresh!
$650,000 DISTRIBUTOR WIN - DETAILS!
June 2002 - Richard and Tammie Fugo worked Starlight between April 1996 to August 14, 2000 when they got a fax from the company telling them they were terminated. MORE DETAILS
NUWAYS UPDATE
June 3, 2002 - Where's the checks? Where's the technology? Where's the ads? Why hit distributor credit cards on June 15th? Good Questions! Answers? New Mall? Stock offering? Raising money? Lot of questions but what we get are Red Flags!
NO VISION ATTACKS ROYAL BODY CARE
June 2002 - With all the care and practice they performed when they pulled the Calcium Pyruvate fiasco, New Vision has just launched a war on Royal Body Care. Patrick Flanagan had a contract with Royal Body Care for their exclusive use of his product. Royal Body Care is suing him (Flanagan) for violating the contract. Ed Note: Now the fight between Flanagan and Lee Lorenzen back in '92-'93 over who invented the crystal technology makes more sense! 2nd Ed. Note: There is enough conflict in the MLM arena, is NO Vision in such bad shape they have to start this hassle? Ethics aside, this smacks of desperation!
$650,000 DISTRIBUTOR WIN - DETAILS!
June 2002 - Richard and Tammie Fugo worked Starlight between April 1996 to August 14, 2000 when they got a fax from the company telling them they were terminated. MORE DETAILS (www.mlmwatchdog.com/Report_SkyBiz1.html)
NUWAYS UPDATE
June 3, 2002 - Where's the checks? Where's the technology? Where's the ads? Why hit distributor credit cards on June 15th? Good Questions! Answers? New Mall? Stock offering? Raising money? Lot of questions but what we get are Red Flags!
TERMINATED MLM DISTRIBUTORS GET $650,000
May 2002 - Starlight out of Monterrey CA. lost a jury trial to a couple they abrubtly terminated and took their money. From observers who attended the trial the company certainly deserved this ruling. High point of humor in court was that Starlight claimed they couldn't pay because company income was dropping! In court? In public documents? More to come meantime see #3 and the "Viperous Upline." In this case it was a "Viperous Downline that caused the termination and the company loss. See: http://www.mlmwatchdog.com/Report_Termination1.html
AMWAY TERMINATES 3 DIAMONDS -- 12 OTHERS RESIGN
MAY 2002 Last month AMWAY / ALTICOR (AA) terminated 3 Diamonds over a dispute on the distribution of money for training tools. In a laudatory move 12 other Diamonds resigned (or threatened to) to protest this action! We salute those 12! This was a magnificent (and we are sure painful) way to protest corporate activity. The Team In Focus group the 15 were in proposed a new comp plan for training materials. Corporate apologizing for confusion. This must be the new generation of leadership at A/A. Terminations around AA were at an all time low. To fully understand the Amway training system>>
MORE CRIMINAL CHARGES TO HIT THE TAX PEOPLE (TTP)?
May 2002 - Last month Thomas Steelman, an ex IRS tax agent, a consultant to TTP (Renaissance), pleaded guilty to one count of conspiracy to commit mail and wire fraud. He also pleaded guilty to 9 counts of filing false tax federal tax returns. Steelman admitted to the court, he (and others) defrauded Distributors of $100 million. This was a hard fall for one of TTP's "Dream Team." What's next? Steelman is 65 years old -- prison won't be nice! You can bet, he is singing his heart out about TTP corporate activity. Expect new arrests any day! Our concern is the Distributors! The IRS has all their SSN's will mass tax audits hit them? We warned about TTP in 1998 in print in the MLM Insider. TTP used the Trinary pay plan which is a bigger target than a Binary. TTP hit people for a "four pack" of tax material at $1200. Rarely did Distributors retail three of the four-pack... 90% collected dust. Next month: more Handcuffs?
NATIONAL CONSUMER LEAGUE VIRTUALLY ENDORSES MLM!
SCHEME TO CHANGE
May 2002 - The owner of Flexco below called! In a previous article I estimated that ½ of the pyramids out there were done by "innocents" that copied another pyramid they saw. Since the other pyramid had been around a while, the "innocents" think it is ok! A local lawyer told this owner the plan looked good. In my book I say get a specialty MLM lawyer! Owner says pay plan will be changed quickly to be in full compliance to be legal. Great!
NIFTY PYRAMID SCHEME
24 May 2002 - Flexco another "fill em up" pyramid. It looks just like Coastal Vacations. The owner of Coastal was taken down hard by the state of Alabama, as well as some of their distributors for the exact same thing. There are people on the WatchDog board arguing that this is the best thing since sliced ham! Boy are they going to get a shock! The clues are: (1) "When you fill in this phase" (2) "as each of your matrixes cycles." Click on this link and put in $900, $2,700, $3000 and $9000 for each phase cycling.
LIBERTY MANAGEMENT OFF WATCH LIST
24 May 2002 - The WatchDog retracts our previous warning about Liberty Management Group and their "WE WILL BUILD YOUR MLM DOWNLINE" project. They have modified it to introduce a new system PPA to help people build their downline. It looks much better than the old claims. We will change our opinion just by eports and observation if a company or group straightens up their act. No prodding needed! We are NOT here to Bash people or companies if they are doing ok things! Here is our retraction and learning article:
LIES OF THE YEAR BY MLM BASHING BOTTOM FEEDERS
24 May 2002 Update- I am really getting sick of hypsters selling their "make a million" information packages by using scare tactics. SCUMBAGS! Bottom Feeders lead with trash; like to quote one
--- Compensation plans have been "stacked" to favor the few "heavy-hitters" only a few top performers make all (all of it? How did you get those numbers?) the money, the vast majority (Lie of the month !) just keep emptying their wallets every month. This is a lie to the millions of hard working folks out there that are happy with $250-$3000 a month and a good product for self use. Most MLMers realize to get to higher income ranges it takes education, hard work and time! These hypsters are all over the internet trying to sell you an instant solution to MLM wealth.. or worse yet to get you to join them by bad mouthing the very same MLM industry they are trying to bottom feed off of! These "Bottom Feeders" want to drag people off to their $50 a month income deals!
FREQUENT QUESTION - IS A $495 BUILDER PACKAGE LEGAL?
23 May 2002 - Some states (23 or so) have Business Opportunity law (or Seller Assisted Marketing Plan) limits of $500 or $600 ...one state (South Dakota) goes down to $200. The AG's rarely do anything about dollar amounts that are close to these amounts unless there are complaints (I usually guess at over 10 -20 depending on the state). So your company's $495 nutritional product builder package is pretty safe. Higher amounts? At risk if they generate a lot of complaints. The heart of MLM is retailing and I don't consider the $495 as excessive, you need stock to learn to retail the product. The company is making an error if they are not teaching people to use and retail the products in the $495 package. I also believe that a person should be able to buy smaller amounts of products, to retail, so the person without money can work themselves up from the bottom. You have to meet people face to face to sell them with products in their hands. If they like you put them on autoship when they call for more. Companies need to concentrate on more retailing. By retail I don't mean the products have to be sold at retail price, forcing that pricing would be illegal. Companies need to have at least 50% customers that don't belong to the compensation plan to be basically secure.
NUTRITIONALS NOT IN FOOD STAMPS
16 May 2002 The revised food stamp bill that just passed did not include allowing stamps to be spent on nutritional supplements. Bad planning! People on welfare are being denied a chance to live a longer healthier life! Sad state of political affairs in this country! Rod
THE FTC CHANGES
13 May 2002 - The FTC's latest Public Information release on what to watch for in MLM is out! It is much better than the last one and more fair to the Industry! Trouble was that it took them 2 years to change the really negative one they had out before this. See it posted on the WatchDog boards!
VISIT THE WATCHDOG TEAM!
10 May 2002 Want a different view of an MLM company? Visit the MLM WatchDog investigation and reporting boards! Dogfights (Wolf fights) and varied opinions. This bunch of good folks turns over a lot of rocks to find shaky deals and scumbags! Plus you get to see real live crooks there! They post to defend their scams! Bring your lunch and post! Ask questions! Be real! Have a great time looking for the truth! MLM WatchDog Message Board
MY FAVORITE RESTURANT JUST CLOSED!
6 May 2002 I am weeping, the Mediterranean restaurant that opened Sept 1, 2001 is gone. Excellent Mediterranean and Mid-eastern food! Soft music, classical hand painted pictures and big overstuffed European chairs. My point? That the failure rate of restaurants is as bad or worse than MLM companies! Eighty percent of normal businesses fail. The MLM industry is higher, and worse now anyone with a pocket of electrons can put up a website and suck in money. The purpose of this website is not to bash MLM companies but to teach people what to avoid. Does anyone know that the fastest growing realty company in the U.S. went MLM about four years ago? The amount of money generated by MLM sales commission based companies is leaping! Rod Cook
3TOBEFREE (OF YOUR MONEY)
5 May 2002 Oh my goodness! An International Business Trust scam to take your money with an Aussie Two Up pay plan. The most painful way to skin people out of their money! But the great news is now you can lose twice as much money with and International Savings (read that sucking your money) account. Click here to be - Sick, sick sick
MLM STILL THE BEST!
3 May 2002 Despite the rash of failures and scams MLM is still the only chance the little guy or gal has of building his own business. Keep up the faith and keep reporting the duds! Watch this board to learn "we'll build your downlines" deals don't work. The quicker and easier the money is the less likely you are to get any. As you read this website look for the "big ideas" we try to teach to help you make your own decisions and to help others! THANKS and keep those reports coming! Rod Cook
NuWAYS GOING AWAY?
3 May 2002 - No checks going to field. Complaints mounting The lesson to be learned from this is that the higher tech, the higher the glitz, the higher the failure rate. Nuways claims to have 220 million opt in email addresses and is having trouble "loading" them. In comparison E-Direct (not MLM) which is one of the largest legit commercial e-mailers has 20-30 million. 220 million opt-in Email addresses? Hype! See Watchdog board NuWays
1NETBROADCAST
3 May 2002 No checks going to the field. Well some did, seems there wasn't an account open behind the issued checks. Complaints mounting. Founders out selling $5000 Regional Director spots in Vegas and headed for the Orient. Run Quickly! Hide your checkbook!
ONEQWEST DONE ?
30 Apr 2002 - Did Phil Piccolo give up on his "Power Leg" trick in OneQwest and has now moved to a new deal to pull in suckers for a nutritional deal? Are the suckers from OneQwest power leg getting moved to the new powerleg? The premise is a new hotter binary pay plan with the first round selling top spots for $12,500. This is sure to attract lightening. Wow! Ed. Notes: The first article I did on good ole "Phil" was on "Shearing Sheep" back in 1997 and telephone and magnetic junk and his guaranteed downline junk - junk. First he surfaces in OneQwest (quickly gone it seems) and now up in another power leg binary builder that he is sure to destroy. Stay tuned for more news!
NUSKIN (OR HITTERS THEREOF) SCREWS NEW EXECS IN ASIA?
30 Apr 2002 -- Playing off the hot international market for China, certain Executives who have had to POP over $3000 dollars (to become and executive) in the effort to be in the first for the race to sign up new distributors in the Peoples Republic of China have found they are thwarted, bamboozled and sold a false bill of goods! See WatchDog Message boards for analysis.
AD PLACERS SHUT DOWN
25 Apr 2002 - Another one that I warned about last year via the WatchDog Newsletter. The Company Ad Placers sold you a book on how to do ad placing on the Internet and provided Internet support for "Ad Placers" The problem is that most of the ads placed were ads to get new people to sign up for more "Ad Placers." It did not work! Why because it was just a new variation of the old "envelope stuffing" scam. To be exact it is a Business Opportunity SCAM no matter whether it has an MLM element to it or not. We reported earlier this year on Washington state taking down a one level work at home scam similar to this. You can bet New York shut down this MLM Business Opportunity scam.
FAX BLASTING NOW LEGAL?
21 Apr 2002 The 11 year old Federal Telecom "policy" making senders liable for sending unsolicited faxes has just been kicked in the tush! In a U.S. District Court, Judge Limbaugh ruled that businesses can advertise by fax unless there is proof that the faxes harm the recipients. The Judge overturned The Missouri AG and two cases the AG had going against 2 fax companies. The AG has sworn to take the cases to the Federal Court of Appeals. Some experts think the cases will end up in the Supreme Court.
ONEQWEST CHANGES NAME!
20 Apr 2002 Trademark infringement lawsuit won by Qwest. The MLM (?) OneQwest Internet deal is now named United Net Services(UNS). Buy 6000 minutes, give them back to UNS and they will give you another 12,000 minutes and sell them for you. Do you see any similarities to Telecom 2000 listed below? Phil A. Piccolo will also build your downline for you in this scheme! The worlds largest Power Leg! Yuk! Yuk! The new website is http://www.uns1.com/a/default.asp
FBI DOES TELECOM 2000!
19 Apr 2002 First you put in $1315.88 and you were supposed to get $3779.34 out of a "one pack. If you put in $65,794 you got a 50 pack of this scam! A lot of people did! The FBI got onto this scam by way of a bank! A lot of scams are spotted by banks that have to report "Unusual Activities." The bank Al Petty, the owner of Telecom 2000, used turned him into the FBI because of his odd remarks of "dodging" the government, naming the account "Face to Face Ministries" and the large amount of money put into the account. Banks are required to notify the Feds of any strange things going on, the bank did! Meantime the court reports that Petty had about 4 million dollars in cashiers' checks, that came in from suckers, he was keeping in a desk drawer. Petty grabbed that and headed to Canada with Sabrina Wei who does trust accounts out of Hong Kong. Want your money back out of this scam? Look in Hong Kong!
NON MLM SCAM - TELECOM 2000 GOES DOWN!
12 Apr 2002 The Feds got a Restraining order yesterday on Telecom 2000 out of Texas. All you had to do in TC2000 was buy a $1315.88 package of telecom junk. Then this pyramid/ponzi let you sit back and collect $$$$! They guaranteed a $3779.34 return in the form of 31 "Preprogrammed" checks over the next six months:
NO SPONSORING REQUIRED!
ABSOLUTELY GUARANTEED!
PRE-PROGRAMMED CHECKS!
The reason this is a hybrid pyramid/ponzi is that you had to sign up another person. Without that requirement it would have been just a plain ponzi scheme! Rod Ed Note: This is another GRQ (Get Rich Quick) that falls into the category of "If it sounds to good to be true it is a scam!!!!!!!!!!!!!!!!!!!!!
GIFTING JAILBAIT DEBT PAYMENT CLUB
10 Apr 02 - Send $$$. We give your name to people that pay your debts! Ahh!! In legal terms, consideration means money.. If I give you consideration to pay your debt === CONSIDERATION === this means "money for money. It is a pyramid with no products or services. They are not even selling trash name lists or web sites! They should have named it Debt Payment Gifting Club.
TOM CLANCY'S "NETFORCE" REALITY!
8 Apr 02 - The Federal Trade Commission has started with eight state law enforcers in the United States and four Canadian agencies in an initiative targeting deceptive spam and Internet fraud. You can expect this informal "agency" to grow. Centrally controlling actions of multiple International agencies may be the best way to control a lot of the scams on the web.
ONEQWEST SUSPICION TURNING TO ALARM
5 Apr 2002 - Great Shades of Strategic Telecom 1997 (STS) and their phone card machines. Buy minutes for an Internet access machine and resell them? Nuts! Downline building! 45,000 people in a month! Somewhere here - hang on to your wallets! They started at $1250 and are now under $400. Guess they found out they were violating Florida (their home state) business opportunity laws! Now you can get in for less than $400 and the rest will be taken out of your commissions! Did this work with Big Co-op? Has it worked with any other company? No! How many Internet Kiosks are in place? How do you sell the access minutes to who?
GREAT ARTICLE "KEEP IT COMING"
Apr 02 -"Keep It Coming --Step 1: Start a business. Step 2: Fail. Step 3: Start a business. Repeat as necessary." Get this month's issue of Entrepreneur magazine. This is a great article and all of you should take it to heart. Not every MLM business that you start is going to be successful. People finish college after 16 years of education and expect to make over $30,000 a year. People join MLM companies and expect to know it all and be making $30,000 a month in 16 months! Unrealistic expectations driven by some "loose cannon recruiters" hurt our industry. MLM takes time/training to make money and probably a few lumps in the process. Lost $200 - $300 dollars and some time? That college education costs a lot more! Most Heavy Hitters in this industry will tell you that they failed at least once and most of us over 3 times, on the way to making that $1,000,000 a year income! Read Entrepreneur magazine - April 2002
MLM IS GOOD - THIS PONZI SCHEME WASN'T!
2 Apr 02 - The Baptist Foundation (BFA) of Arizona started in 1948 to provide retirement funds to Baptist church members. They offered retirement programs at greater than bank rates. Somewhere in time they got very upside down on real estate investments. To keep paying out promised money, BFA used the latest money in just like guess what? A Ponzi scheme! When they tanked -- the $483 million they took from 11,000 investors wasn't there! Guess who their auditor where? Arthur Anderson! So just remember good guys make mistakes and good deals go bad! MLM bad deals as a potion of the scams and mistakes in the world are very, very small!
