LEO withholds commissions, Dan Andersson confirms Ponzi scheme
LEO owner and CEO Dan Andersson has announced existing commission balances are being held hostage, pending new investment from recruited affiliates.
Andersson’s announcement was made in a “Special Global Associate Meeting”, held yesterday.
Last we heard Andersson was under criminal investigation in Pakistan. To that end authorities had forbidden him from fleeing the country.
In April the Pakistani SEC shut down a shell company related to LEO.
As far as we know Andersson (right) is still prohibited from leaving Pakistan, and the regulatory investigation into LEO continues.
What with LEO’s latest incarnation being an MLM crypto Ponzi scheme, naturally this has been terrible for business.
Or as Andersson puts it, LEO now finds itself in an “almighty cash crunch”.
[22:51] Our balance sheet is very, very healthy. We have assets, we have properties, we have a balance sheet that is strong as anything.
We have some properties that are worth sort of four million pounds. We have claims on others that uh… let me not talk about that, it’s too painful.
But we have a balance sheet that’s very, very strong and very, very cool. That’s terrific.
But the business runs on liquid cash. And of course when the liquid cash dwindles, then you as a business leader have to do something about that.
Rather than come clean about his arrest and status in Pakistan, Andersson dances around the elephant in the room.
The closest he gets to acknowledging LEO’s legal problems, is stating the company has racked up “two million pounds of legal fees on different things”.
This saw the introduction of LEO Coin, which has operated as a Ponzi scheme through an internal exchange since launch.
On or around August 2015 LEO Coin was listed publicly. At launch LEO Coin hovered around five cents.
From 2017 however it’s been in continuous decline, and now trades publicly at 2.2 cents.
Andersson refers to LEO’s sale of LEO Coin internally as a Digital Marketing Service (DMS).
In short LEO generates LEO Coin demand, solicits investment for the coins internally and pays commissions on affiliate investor recruitment.
This is your standard MLM crypto Ponzi model.
Trouble is, with Andersson stuck and new investment plummeting, LEO has (supposedly) run out of money to honor internal exchange withdrawals.
As part of his Special Global Associate Meeting announcement, Andersson inadvertently reveals LEO has been paying internal exchange withdrawal requests with invested funds.
[24:32] The DMS product has cost us dearly.
When we launched it, it was a fantastic opportunity. The crypto markets were full of opportunities that we were able to capitalize on.
But then that market, those markets contracted and very, very quickly we got to the stage where we had to kind of support the DMS payouts using our digital currency reserves.
We of course already knew LEO was operating as a Ponzi scheme (every MLM crypto internal exchange opportunity is), but there you have it from the horse’s mouth.
In response to LEO collapsing, Andersson announced all existing LEO affiliate commission liabilities have been suspended.
[32:11] The old liabilities, from things that you earned six months ago, nine months ago or last week, those commissions will be withdrawn against the commissions that you earn.
The algorithm will tell you how much you can withdraw. It means you can withdraw 100% of your new commissions plus 10% of your old ones.
The balances are there, but affiliates will only be able to claim out of new business – i.e. the recruitment of new LEO affiliate investors.
In an attempt to placate ripping off LEO affiliates, Andersson states he’s also asked LEO’s “senior executives to not take salary”.
In an attempt to encourage new investment, Andersson announced a reverse matching bonus was scrapped. Stricter qualification criteria for the regular matching bonus will also be introduced.
Defending the decisions, Andersson stated the bonuses were “a bit of bullshit” and that LEO “needs the cash flow”.
[34:56] If you have no intention to support LEO by standing up and fighting for LEO, then we have to make sure that we look after the people who are fighting.
Looking forward, unless a bunch of new gullible investors are found, LEO is over.
Not withstanding LEO’s and Andersson’s legal status in Pakistan, which Andersson has not addressed publicly.
By no longer propping up internal exchange LEO Coin withdrawals, Andersson states he expects the value to drop to the current 2.2 cent public value.
To give you an idea of how much that will gut LEO’s MLM opportunity, over the past 24 hours less than $4000 of LEO Coin was publicly traded.
LEO Coin is dead outside of LEO, and Andersson just killed it internally too.
Can’t say I blame him though, math is math and LEO can’t continue to pay out if there’s no new investment coming in.
In the meantime LEO’s existing investors are coming to terms with their losses.
Andersson appears to have little sympathy, telling affiliates upset about having commissions stolen;
[46:55] Honestly, if you want to be a freeloader, if you want to have something for nothing, you are very welcome to leave.
You are very welcome to be pissed off. You are very welcome to say goodbye and go off and find yourself a scam that you can run for six months.
One LEO affiliate investor who wrote in to us stated;
As a LEO member I am so stressed and afraid about company’s future.
Some of the leaders are talking about that he has to pay bribes in Pakistan to avoid being arrested that’s why he is spending company’s money and is not paying commission to us.
Other leaders are saying that he is planning to run away with company money and is going to reset the company next month during China cruise trip this is why he stopped commission payments.
We worked hard to earn this commission and he is spending it on himself.
Whether this “China cruise trip” plays out will be interesting to see.
At the time of publication LEO’s website lists Dan Andersson, Mihir Magudia, Andy Hanson, Waqas Suhail and Wendy Li as speakers for the event.