Judge unblocks “non-pyramid” BBOM commissions
Following the filing of two appeals seeking to lift court-ordered suspensions of BBOM’s business practices in Brazil, a decision was made on Monday that lifts some of the sanctions imposed against BBOM.
Under BBOM’s business model and compensation plan, the company accepted $300 to $1500 deposits from affiliates and promised to pay out $80 to $400 a month, provided affiliates continued to pay a $40 monthly fee.
The ruse was that the money was being used to sell GPS trackers to actual customers, however all BBOM did was take new money and pay it out to existing investors.
That makes today’s news a little strange as the parts of BBOM’s business model Judge Reynaldo Fonseca unblocked on Monday, don’t appear to have been in BBOM’s compensation plan.
The two commissions Judge Fonseca unblocked are the “Direct Sales” and “Fast Start” bonuses, neither of which were present in the BBOM compensation plan when I reviewed the company. This has me thinking that both commissions are external the MLM business opportunity.
With this, BBom may only make direct sales to consumers and pay bonuses to dealers by the indications of final consumers, said federal prosecutors in Goiás (GO-MPF), who are responsible for the charges (against BBOM).
For federal judge Reynaldo Fonseca, blocking all the activities of BBom is improper because ‘some of the ways of marketing the product used by (BBOM) are not a part of the “financial pyramid” scheme .’
Given that BBOM had no customers (other than its affiliates who are forced to pay in order to receive their ROI), this seems somewhat of a hollow victory.
In arguments submitted to the courts to get (the company) unlocked, BBOM said it had placed 250,000 trackers in the hands of consumers, which is nearly the same number of (affiliates the company has).
Well played by the prosecution however, as they’re no doubt well aware unlocking BBOM’s commissions on retail sales is quite pointless. That those affiliates are going to continue paying BBOM $40 a month with no attached ROI is doubtful.
Meanwhile the Ponzi investment scheme, which formed the core of BBOM’s MLM business operations, remains suspended. This in itself provides some insight into how Judge Fonseca sees the rest of the business, and is a possible indication of how the model will ultimately be judged.
A second appeal is working its way to the system which seeks to have the investment opportunity restarted, however the chance of it succeeding appears unlikely.
Funds were also released by Judge Fonseca, so that BBOM could pay off its debts, including the company’s ‘suppliers, labor and tax debts duly proved, water, light and materials “needed to run the company.”‘
Somewhat interestingly, BBOM have also announced plans to push ahead with a new business name and compensation plan, the specific details of which have not yet been released.
Under the banner of “EmbraSystem”, BBOM are going to launch the new opportunity over at “vamopracima.com.br”. At the time of publication though that page offers nothing more than an affiliate login form. Note that if the “forgot password” link is clicked, visitors are redirected the BBOM website.
Will BBOM ditch its Ponzi scheme roots and have its affiliates market actual products to retail customers, or are they playing the dangerous game of starting another Ponzi scheme whilst their first is still under criminal investigation?
I’d like to say with some degree of certainty that it was the former, however this is the MLM industry and stranger things have happened.
There is definitely no doubt Judge Fonseca sees the business as a pyramid. His full decision can be read here:
And the third paragraph of the fifth page translates to:
As can be seen, he calls it a pyramid directly.
Thanks for the additional information Mauricio. Sounds like it’s game over then.
This new business is likely to flop if they don’t release another pyramid/Ponzi hybrid. And then the catch 22 is that given the regulatory scrutiny currently surrounding BBOM, they’d have to be utterly stupid to do so.
LOL, on BBOM’s official Facebook page the affiliates were stark raving mad because of this – “I did not join the company to sell anything”.