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After months of delays OfferHubb look to be finally gearing up for launch “sometime soon”. With that development has come a rather interesting announcement from Robert Craddock.

Craddock served as Acting COO Greg Caldwell’s right hand man in the $600M Ponzi scheme, Zeek Rewards. Following the SEC bust of Zeek, Craddock then raised thousands of dollars on the promise of organising legal representation for Zeek Rewards affiliates against the SEC.

This representation eventually amounted to charging those who pledged money to Craddock an additional $300 for a template letter those who bought it could sign their names to and send off.

What happened to the rest of the money is currently unknown, however one affiliate recently shed some light on where some of it allegedly went:

I have first hand knowledge of what RC is up too, I think it’s interesting that he collected so money from folks for legal representation in regards to Zeek Rewards and not one affiliate was represented.

He took in 6 figures and what was it spent on?  I was told from a very reliable source that over 50k of that money went into fixing the engine of his small plane.

With the court-appointed Receiver now seeking to recover funds from Craddock and other “net winners” in the Zeek Rewards Ponzi scheme, Craddock and person(s) unknown have been working on OfferHubb, hoping to replicate the daily ROIs they were paid in Zeek Rewards.

In an email sent out to OfferHubb affiliates on May 23rd titled “We are going live”, Craddock wrote

From: Robert Craddock
Date: Thu, May 23, 2013 at 10:45 PM
Subject: We are going live

(Ozedit: link to OfferHubb webinar removed)

Send to everyone in your team for tomorrow at 1:pm EST we have room for 1000 people so first 1000 get in.

OH Brown will be showing the points in the backend and explaining how quick everyone will be starting to get paid.

Announcements on removal of qualifiers for a limited time, at start to get everyone earning money.

Robert

After reviewing the OfferHubb v2.0 compensation plan I identified two qualifiers affiliates had to meet in order to receive their daily share of OfferHubb’s revenue-share.

  1. recruit 20 initial “Daily Deals” customers into the scheme and 5 new customers every rolling 30 day period thereafter and
  2. sign up 2 merchants to OfferHubb

The first qualifier is an effort to combat Zeek Rewards’ abysmal customer revenue, which made up just 2% of the company’s total revenue (the rest was affiliate money).

The second qualifier is an effort to force OfferHubb affiliates to bolster OfferHubb’s Daily Deals offerings. Naturally it’s a bit hard to carry on the facade of providing value to end-customers if your Daily Deals portal is rolling tumbleweeds.

In my analysis of OfferHubb I noted that whilst both of these qualifiers do add an air of legitimacy to the scheme, they fail to address the underlying mechanics of OfferHubb affiliates pumping money into the scheme and earning a daily ROI. This ROI is based solely on their own financial contribution to the company, that of any affiliates they recruit and how much they re-invest once paid.

In effect, it’s more of the silly pseudo “don’t mention the word “investment” and we’ll be fine” compliance we saw with Zeek Rewards.

And Craddock’s announcement? Well that tells us two things.

The first is an apparent problem with OfferHubb affiliates meeting the set qualifiers, without which any claim that OfferHubb isn’t a Ponzi scheme (even if the claim is made on the basis of pseudo-compliance), disintegrates.

The second is that Craddock explicitly states the reason behind the removal of the qualifiers is to ‘get everyone earning money‘. Pointing out the obvious, Craddock seems to be stating that with the qualifiers in place, affiliates aren’t going to earn money.

Those who join after the qualifiers are re-instated are going to be sold on the income potential demonstrated by existing (prelaunch) affiliates. Affiliates who were subject to a completely different set of rules those who joined after will be subject to.

Rules which apparently prohibit or severely hamper an affiliates efforts to “earn money” in OfferHubb. Enough so that they were temporarily abolished at launch.

With new affiliates most likely unable to replicate the success of those who joined and were paid solely on how much they put into the company, what effectively happens is the money newcomers invest are siphoned off by existing members under impossible qualifying conditions those taking their money  were unfairly exempt from.

Then of course there’s the issue of following the money. Like Zeek Rewards’ “retail bids” facade, OfferHubb pretend that their Daily Deals and merchant offers will be a significant source of revenue for the company, thus negating concerns over a repeat of the demonstrated 98% affiliate-funded ROI paid out to the company’s affiliates each day.

In removing qualifiers requiring affiliates to source Daily Deals customers and merchants, temporarily or otherwise, the question of “what exactly are affiliates being paid to do?” arises.

If OfferHubb affiliates aren’t trying to get OfferHubb customers and merchants, the only other interaction they have with the company is the amount of money they pay into it upon joining.

With money pumped into OfferHubb by affiliates being turned into “advertising packages” which then need to be dumped on merchant accounts, one can only wonder how soon “third-party” merchants will start selling merchant accounts to OfferHubb affiliates. As absurd as that sounds…

Getting back to the money though, in abolishing merchant and customer qualifiers for prelaunch affiliates, OfferHubb reduce the revenue source that they plan pay out as a daily ROI as originating entirely (or close to) from affiliates.

Affiliates paying affiliates by way of a daily ROI, subject to how much individual affiliates initially invested themselves and continued to re-invest is precisely what qualified Zeek Rewards as a Ponzi scheme.

Also worth noting is Craddock’s mention of O H  Brown. Brown did the silly pseudo-compliance marketing videos Zeek Rewards put out, aimed at convincing people it wasn’t a simple Ponzi scheme.

I don’t think we ever established whether or not O H Brown was an actual affiliate of Zeek Rewards, however he was heavily involved on the Executive Management side of things.

In addition to producing all of Zeek’s marketing videos, O H Brown was also used to set up alternative payment gateways following the revelation that “hundreds of thousands of dollars in fraudulent transactions” had passed through Zeek’s existing gateways.

Most of Zeek Rewards’ Executive Management had affiliate investor accounts with the company so it’s highly probably Brown was indeed an affiliate (Craddock is already a confirmed affiliate).

With OfferHubb it seems this time around Craddock and Brown are much more involved at a corporate level than they were with Zeek.

To date OfferHubb have not publicly disclosed who is running things or owns the company.