Kevin Thompson to tackle i-Payout compliance?
When you see my name associated with a particular company out there, I always tell clients… I make it clear they’re not allowed to use my name in any sort of promotional fashion.
Number one it looks horrible. Mainly from a marketing standpoint it’s a bad idea, in my opinion, to lead with lawyers. Right?
You don’t see the big companies out there like Amway and Herbalife saying, “look, we’re a clean company because our lawyer says we’re clean.” When you do that you’re all but implying your program has some significant problems.
-Kevin Thompson, appearing in a YouTube video uploaded February 12th, 2014.
Following the shutdown of Liberty Reserve for money laundering and the ongoing mysterious and abrupt suspension of business activities in the US by Payza, one payment processor name I’ve seen pop up with increasing frequency in the MLM industry is i-Payout.
I’m not sure who’s in charge of i-Payout’s approval process is for MLM business opportunities, but here’s a list of their more recent clients:
- Spinding (six-tiered Ponzi scheme that uses a global cycler business model)
- Wealth4AllTeam (long-running but now collapsed 10 day ROI Ponzi scheme)
- Primus Hub (attempted reboot of Wealth4AllTeam once it collapsed)
- Funky Shark (planned Ponzi scheme that shutdown during prelaunch following legal advice and a $40,000 fine)
- TeamVinh International (feeder co-op program for multiple recruitment-driven MLM schemes)
- MyAdvertisingPays (120% ROI advertising-based Ponzi scheme)
- Diamond Banners (matrix based recruitment scheme)
- Diamond Cycler (matrix based recruitment scheme)
- Argent Network (52 week ROI Ponzi scheme, advertised as “a mixture of Zeek Rewards and TelexFree”)
- 1BuckAdShare ($1 a position Ponzi scheme)
The above is just a sample list I was able to put together after conducting a small amount of research, I’m sure there are others. But what the above list should give you is an idea of the types of companies i-Payout have no problems providing ewallet and payment processor services to.
Effectively it would appear that if you can show i-Payout the money, “Welcome aboard!”
I personally found myself in communication with i-Payout when they took objection to me calling them out for providing TelexFree with ewallet services in the US.
TelexFree are currently under investigation in multiple countries and facing legal action in Brazil. Public Prosecutors in the Brazilian state of Acre have announced that pending charges against TelexFree for money laundering and embezzlement.
Despite the obvious Ponzi nature of TelexFree, i-Payout took it upon themselves to defend their (biggest?) client. In their email to BehindMLM, i-Payout wrote:
i-payout is providing its product and services to TelexFree’s US and global business outside of Brazil.
i-payout has done a complete due diligence on TelexFree, assessed its needs, and confirmed the product as compliant with all US laws. i-payout also verified every single TelexFree member by a submission of a valid ID.
Putting aside the fact that it’s an open secret Brazilian TelexFree affiliates have been publicly encouraging other Brazilians to sign up and invest in TelexFree with fraudulent identity details (TelexFree blocks investors from signing up with Brazilian contact details), i-Payout are clearly of the opinion that there is nothing wrong with accepting $289 investments from affiliates on the promise of a $20 a week annual ROI.
Hell, they even take things one step further by declaring the model to be “compliant with US laws”. Who over at i-Payout made this declaration was not clarified by the company.
With i-Payout’s inherent open-door policy in accepting clients, coupled with the recent regulatory crackdown on ewallet payment processors facilitating money laundering, embezzlement and other financial irregularities, along with the rising popularity of the processor with the MLM underbelly – it’s pretty obvious the path i-Payout are going down.
And as it were, turns out I’m not the only one who figured as much. Presumably having booted out whoever was previously in charge of their compliance (a broom closet full of lobotomized jellyfish?), i-Payout just announced they have
partnered with Kevin Thompson to provide up-to date compliance guidance to their new and existing clients in the Direct Selling and Multi-Level Marketing industry.
i-Payout President, Eddie Gonzalez, commented, “we are constantly striving to improve the services we provide our clients and to enhance our reliability with vendors and banks.
As an industry leader, we are in an advantageous position to provide guidance for our clients to remain compliant with constantly evolving MLM and DSA regulations. We are therefore pleased to welcome Kevin to support these efforts.”
Thompson publicly announcing he tells his clients that “they’re not allowed to use my name in any sort of promotional fashion” on the same day i-Payout make their announcement… you couldn’t make this stuff up.
Anyway, I’m sure Thompson and i-Payout will work that out what went wrong there.
Meanwhile what I find interesting is that, going off of i-Payout’s announcement, this potentially pits Thompson against business models such as that of TelexFree’s.
i-Payout today announced it has partnered with Kevin Thompson to provide up-to date compliance guidance to their new and existing clients in the Direct Selling and Multi-Level Marketing industry.
Unless you’re Gerry Nehra, it’s impossible to skirt the fact that TelexFree accept $289 deposits from affiliates and use this money to pay out other affiliates – at a guaranteed rate of $20 a week for 52 weeks. By any other name that’s a straight-forward Ponzi scheme.
Apart from some murkiness with Bidify (that cringe-worthy Frode video), Thompson has a pretty solid track record. I say pretty solid because there is the odd exception.
As Thompson explains in his video though, sometimes clients don’t listen to his advice and I think that’s a fair statement for him to make. Whether or not Empower Network or Bidify (now MyCenterBid) fall under that category though, who knows… but from what I’ve seen overall I’d like to give Thompson the benefit of the doubt.
Considering the alternative is someone like Gerry Nehra, who gets up on stage at company events and blesses MLM opportunities, irrespective of how obvious a Ponzi scheme they might be, Thompson is usually a well-balanced voice of reason within the industry. Albeit locked into the constraints that being an attorney sometimes brings with it.
Far be it from me to predict Thompson’s verdict on TelexFree or whether or not i-Payout or TelexFree will pay any attention to it, but should the payment processor continue down the path of providing ewallet payment processor solutions to some of the industry’s most questionable companies, sooner or later it’s going to catch up with them.
How many thousands, if not hundreds of thousands of dollars of TelexFree affiliate investor money has passed through i-Payout only they and TelexFree know for now. . What with Alessandra Marques of the Acre Public Prosecutor’s Office claiming a US investigation into TelexFree is already underway, I imagine soon enough we’ll be able to add the SEC to that list too.
What do they think about Ponzi schemes that hide behind the facade of having their affiliates spam the internet with ads every day? One only need look at Zeek Rewards and AdSurfDaily for a definitive answer. Not withstanding Nehra gave his seal of approval to both those schemes too.
Will Thompson be able to clean up i-Payout or are they destined to become the next payment processor to be shut down for letting anyone and everyone pump funds through them?
One might even argue it’s already too late;
As always, stay tuned…
I just wonder something anyone in the world has not yet received payment of Telexfree?
Couple of hundred thousand Brazilians at last count.
Ponzi schemes pay out as long as new investors continue to dump funds into them, what’s your point?
Ever wonder what a Brazilian is?
The timing is pretty perfect between my video and the press release. In all fairness, the context of my video is pretty clear. Consumers need to understand that when network marketing companies name-drop, it does not mean that the lawyers endorse the program. iPayOut is a different kind of client with a different set of needs.
I’m ok with their press release. As for your last comment, it’s never too late for a company to improve. They’ve recently purged a number of programs and the I suspect that number will increase as time goes by.
Kevin,
The entire purpose of “name-dropping” is to legitimize a scheme, why else mention “Oprah”, Bill Gates” or even “Kevin Thompson”?
While it may never bee too late for a company to improve, it causes us to question why they allowed questionable companies to use their payment processing services in the first place.
Payment processors need to stop enabling Ponzi and Pyramid schemes to garner millions from their victims or they end up facing criminal and civil charges, just as they should.
Without these payment processors/money launderers, international Ponzi schemes could not exist.
Mr. Thompson, Hmm timing “is” everything.
I found it curious that you went to all the trouble to make the video establishing that even though you represent a certain client it doesn’t mean you are legitimizing their business and at the same time you put the video out iPayOut (new client who I suspect was the reason for the video) does “exactly” what you asked them not to do. Apparently they are already not listening to your advice.
Murderers and theives all get their day in court and are allowed legal representation. Many a lawyer has represented or worked for people they know are guilty or haven’t acted properly. My first impression when I viewed your video was that it’s purpose was more to establish that you have to pay bills just like we all do and so you have to take on some unsavory clients but you don’t want your reputation to be harmed by being associated with them. Understandable.
Purging Telexfree is going to be one big hair ball.
Anyhow, best of luck to you…I think you’re going to need it.
I am pretty sure nobody wants to see iPayout go the way of Payza or MtGox in the US… such as having their funds seized by DHS. Yet it’s clear that the ease of monetary transfer via enablers / facilitators such as iPayout is a part of what’s fueling international fraud rings such as Profitable Sunrise, TVI Express, and new suspect schemes such as TelexFree.
Maybe there should be an addendum to a retainer contract. 😀
—–
If you followed all of my suggestions (amended thereof) you can say you retained me, and nothing else, and use standard template description.
If you did NOT follow all of my suggestions, you can say you “consulted” with me, nothing more, and use standard template description, with added emphasis/disclaimer that “this is not an endorsement, blah blah blah”.
If I ever catch word that you or any of your underlings claimed more than that, I’ll notify you and give you X days to clean it up, else I’ll cut my ties with you AND sue you for falsely using my name as per contract breach.
—–
Well, that’s just me, a layman talking. 🙂 I’m pretty sure you have some sort of this in place or it’s SOP in contract…
This is just a redirect and delay tactic. They are hoping that Feds will skip few month before this scam enabling scheme gets shutdown.
The press release talks about “updated compliance guidance to i-Payout’s clients”. That sounds like “general compliance advices” to a whole group of clients, rather than specific compliance guidance to individual clients.
And it’s about the clients’ compliance, not about i-Payout’s own. So I don’t believe we can expect much changes.
i-Payout has a group of clients, and Kevin Thompson has something to offer to that group. That’s about “normal business”. The ones paying for it will probably be the clients themselves.
Dorothy,
iPayOut is not the reason for the video. As I said in the original comment, the context should be clear. I have a problem when distributors name drop as they’re recruiting i.e. “Kevin Thompson is our lawyer; therefore, we’re legal.” iPayOut is a different kind of client with a different set of needs. Again, their press release doesn’t bother me.
M_Norway,
The relationship is with iPayOut, not their customers. They’re increasing the due diligence that goes into the customer-intake process.
@Kevin
Any initial thoughts on what to do about the scores of Brazilians who have re-signed up to TelexFree with fraudulent information? Not only are they circumventing a court order in Brazil, but they’re surely at the forefront of liability should the regulators come knocking?
And if you can’t talk specifics with regards to TelexFree, let’s say BehindMLM is a hypothetical client of i-Payouts and I let anyone and everyone sign up to my Ponzi scheme with bogus details.
How would you approach that from a compliance perspective? Keeping in mind i-Payout currently don’t seem to care who transfers funds through them.
Oz,
I have no idea what’s going on in Brazil re. TelexFREE. As for your hypothetical, I’m not a spokesperson for iPayOut and I’m not paid to defend their prior decisions (or current decisions, for that matter). With that being said, I’ve been retained to help them weed out the obvious train wrecks.
With your question, you’re asking what iPayOut needs to do if they learn of people signing up with bogus details. There are “KYC” (Know Your Customer) laws in place that offer guidance on the subject.
In a nutshell, Brazil shut down TelexFree and prohibited the company from signing up any new affiliates or paying out ROIs to existing affiliates.
What followed was Brazilian top affiliate investors urging their downlines to create new TelexFree accounts with fraudulent US-based details (you can’t sign up with Brazilian contact information anymore), and invest new money (through i-Payout).
This was done via YouTube (Portuguese), with TelexFree doing nothing about it (“show us the money!”).
You and I know there are KYC laws in place – do i-Payout? They’re certainly not acting like it. I haven’t heard of anyone being rejected and/or losing an account with i-Payout – despite the obvious fraud taking place.
Some more background reading for you, this is what i-Payout inherited when they took TelexFree on as a client (after GPG booted them out, presumably because they weren’t keen on the idea of the SEC shutting them down) – https://behindmlm.com/companies/telexfree/telexfree-us-business-plagued-with-rampant-fraud/
Ok, So the scene might look like this….
ring, ring… “Hi, Mr Labriola?” “This is Kevin and I’m representing IPayout to be sure that the businesses they are dealing with are legal.”
“Hmmmm after some review I’m concerned you may be marketing a world wide Ponzie scheme and you might want to cut that out.”
“Oh no Kevin, we have an “awsome” voip product and we’re also “changing lives” says Steve.
“Great to hear, so can you tell me what percentage of the companies gross intake comes from selling your voip product?”
“Oh” Steve says, “we have to sell the product?” “Well I have a bazzillion people working for me spamming the internet with adds they don’t know anything about… and we’re changing lives.”
Kevin asks, “well what about Brazil and Dominican Republic and Peru and…….?”
“oh” Steve says, “they are different companies….and anyway those governments are all corrupt….and I’m starting to get the feeling your just jelouse of my making lots and lots of money….”
Kevin you may want to do a bit of KYC on your new client IPayout…. they may have some bigger stinkers in their closet then they let on
Oz (and K. Chang),
Thanks for the great work you do in this site.
I am writing from the Dominican Republic, where this whole T F (and now W) schemes are totally out of control.
As of today T F (I use initials not to give them any more free publicity) is ranked the #24 most visited page from the DR and the stories I hear of people going into debt, selling assets, church and political people involvement in this scam are really terrifying.
The day this “business” (as they call it here) goes down in the DR, I can only imagine easily up to 1% of our population (100,000 approximately) going down with it.
I have tried to share some of the news and context that you and PP bring on this subject to my Spanish-speaking community but, quite honestly, there isn’t much to be done.
As someone wrote in the Maddoff case, “there is no bigger lie than the one we tell ourselves” and this one here is a pretty big, and unfortunately so far, effective lie.
Agan, keep up the good work.
Regards,
Alex @Argentarium Fernández
I know.
But I didn’t know that. It could have been about “general compliance” to whole groups of i-Payout’s clients. I only tried to identify whether or not we could expect significant changes for the individual clients. We can’t expect that.
International Payout Solutions, Inc. is registered as a VISA TPA (Third Party Agent):
“Provides payment-related services” “to a Visa member, merchant or agent”. It’s rather vague, but it indicates that i-Payout will be responsible for its own services, just like any other business will be.
It will be vulnerable to Ponzi schemes, e.g. having e-Wallets frozen in a shutdown.
It will be vulnerable to money laundering, e.g. transactions to fake account names.
@Alex Thanks for sharing a local perspective from the DR.
If anyone in the US is smug about getting their weekly TelexFree ROI, these are the people you’re stealing from.
This is partly off-topic in relation to i-Payout’s clients’ compliance, but I’ll add it anyway.
You had an article in your blog on January 20 2014, “The Cease and Desist”, linking to an article here, “Bid For My Meds threatens with legal actions”. I added some stuff specifically designed for visitors coming in from that link, from post #25 in that thread.
WHAT IT IS
I collected the 3 known “Cease and Desist” I knew about into the same thread, from post #25 – #44, added background stories, analysed them briefly for where they failed.
I also added something about “Comment strategies”, e.g. I identified a couple of strategies that worked or could have worked.
It’s “unfinished work”, it’s simply a collection of background material rather than a complete report designed for a specific audience. I didn’t identify any exact “target audience” there, only that it would be a “different type of audience”.
HOW IT CAN BE USED
It might potentially be of interest for a few of your future clients, or for other people coming in from that link. People will need to have SOME knowledge themselves before it can be useful, enough knowledge and experience to process background material independently (rather than looking solely for “expert opinions” supporting the ideas they already have).
You can’t offer it to any type of client / any type of people. Some people want REFLECTIONS of the ideas they already have, preferrably from some “expert authority” reflecting the same type of ideas.
BACKGROUND IDEA
“Lawyers will need to offer SOMETHING, something close to what the clients are asking for”. But sometimes it’s wiser to offer information rather than action. I have added some information, real examples people can look at before deciding anything about actions.
@Alex
When ponzie pushers come here and wonder why some of us readers and contributers show some anger towards their ignorance….It’s information like what you shared that makes me angry. Knowing that people have such great hopes in a dream that most likely will become a nightmare really pisses me off.
And by the way….Steve Labriola should be landing in your country any day now. He said in one of his updates he was going to DR. Perhaps the authorities should greet him when he arrives. That probably won’t happen but maybe a reporter might like to ask him a few questions.
Why do you think iPayout hired KT? 🙂 With these e-Money-movers under regulatory attack in the US, (Payza’s funds seized, Liberty Reserve shut down, BitCoin exchanges raided/funds seized) nobody wants to be next on the Fed hitlist. Face it, without these “enablers” HYIPs and even scams like Zeek Rewards (and TVI Express, which heavily relied on Liberty Reserve) can’t exist.
Feds basically is using KYC regulations to punish financial institutions for not doing their own due diligence. Four Oaks Bank, one of the banks that Zeek used was fined for letting some unscrupulous people gain access to ACH, which allowed them to debit anyone’s checking account directly, and those people then sold the access to some really unsavory characters, like payday loan providers… and Zeek, even after multiple reports of fraud.
Kt’s job to to advice iPayout on due diligence. But in the end, it’d be up to iPayout to decide who to take on as a client… and who not to… and their criteria will be different from ours… and so is their risk (in the form of a Fed warning/fine/license yank)
IMHO, iPayout can’t pay KT enough to do a full review on every client. Instead, ipayout is probably paying KT to develope some sort of culling criteria, like “warning signs”. If a company scored X out of Y on the test they are rejected as a client. Between W and X requires additional research.
This may or may not be grandfathered onto existing clients.
@ alex im a faithful follower of your twitter feed and it brings me great joy everytime I see you attack TF OG and the W I have family in the DR that is involve with TE and ive sent them over here to read but they just dont seem to get it all I can do is pray for my country man to open there eyes.
This Blog is one of the best source of info I have seen they do a great job at letting one inside of these ponzy games
You can’t just “send them over” and believe they will see what you see. That method won’t work.
You will need to pick out some specific information you already know they CAN be interested in, and offer it as “alternative information source” they can choose to use if they’re interested, as a “voluntarily solution”.
“Factual reviews” is something most people can accept as an IDEA, i.e. they can accept the IDEA even if they don’t like the reviews. It will be of more interest for people researching a program than it will be for people who already have joined a program.
At some point, people will be looking for factual information. But other than that, they will mostly be looking for “reflections of their own ideas”.
People looking for reflections of “life changing programs” will clearly not find it here. We will identify most of those programs as frauds. They will clearly not find what they WANT to find, and they will probably build up more resistance against that type of information.
You will first need to identify whether or not people CAN be interested. At some point in time, they will NOT be very interested. “People must first WANT IT before you can offer it”. If they CAN be interested, then you should try to identify WHAT they can be interested in, and recommend only that.
You will clearly fail if you want them to see something from your viewpoint, while you allow yourself not to see it from their viewpoint. “You must first accept the ideas THEY have before they can accept the ideas YOU have”.
In reality, if people truly want to join a program, we will have very little effect on that decision. We will mostly have effect on people who want to avoid the same program. We may also affect some of those who haven’t decided anything yet.
Try to find something that better reflects THEIR IDEAS rather than your own, and recommend only that?
If they seriously believe or WANT to believe that TelexFree is a long lasting and legitimate program, we can’t change that belief. We will mostly offer “unwanted information”, so you should preferrably recommend other ideas.
You should probably first try to see it as an income opportunity = “see it in the same way THEY see it”. First then will you be able to pick out the type of information they potentially CAN be interested in. Or you may be able to build up some information they can be interested in in the future.
TelexFree will most likely fail or be shut down within few months. People will then be looking for factual information, although some people will prefer false hopes for several months.
We will normally avoid having so called “expert roles”, e.g. the typical “self appointed MLM expert” you will find all over the internet. It’s actually much easier to communicate something as “ordinary internet users”, placing the focus on the information itself rather than on the people presenting it.
It’s much easier to ADD information to that idea (for other people).
It’s much easier to disagree in something, e.g. people can accept the basic idea about “sharing information” even if they disagree in some of the information they can find.
It will offer people many more roles to choose from, e.g. people can “tailor make” their own personal use, within some limits for STYLE. The style is factual and logical, and about “general interest” rather than about “personal interest”.
You will actually have better chances for that someone will find something of interest if you don’t add any conflicting ideas to it.
The self appointed “MLM expert” was one example for bad ideas. There’s hundreds of them to be found on the internet, and they will typically offer very positive reviews for the programs they’re currently in. We won’t offer anything like that, and we shouldn’t be recommended in that role either.
Your recommendation may have failed because you didn’t offer the right type of idea at the right time. The people you offered it to already had some opposite ideas, and they probably wanted reflections rather than resistance.
Kevin,
If you read any news report in Brazil, you’ll see that KYC is not close to being satisfactory of I-Payout:
http://exame.abril.com.br/brasil/noticias/mesmo-bloqueada-telexfree-aceita-cadastro-de-brasileiros
Oz,
FYI, when Telexfree started, they used Paypal as well. For some “obscure” reason they stopped using Paypal early August/2012. My bet is that Paypal didn’t accept TelexFREE dubious contact and payment information.
I’m just wondering while we all know that its a kind of ponzi scheme and still we are investing in it and the government have no strict action against them… don’t know why?
iPayout is NOT a Ponzi scheme.
If you have comments about TelexFree you should probably post it over at any of dozens of TelexFree topics instead of here on iPayout. IMHO, of course.
So apparently Worldwide Solutionz also use i-Payout.
These guys take $25 investments from affiliates, somethingsomethingmagicpants and then pay out a $40 ROI after 90 days.
But remember, Worldwide Solutionz is totally not a Ponzi scheme because i-Payout conduct thorough due diligence on all of their clients.
i-payout has done a complete due diligence on TelexFree, assessed its needs, and confirmed the product as compliant with all US laws. i-payout also verified every single TelexFree member by a submission of a valid ID.
IPayOut may want to give Mass Commonwealth Secretary William Galvin a call to let him know that they can save him the time and money of an investigation since they did their due diligence and found Telex business compliant .
Complete? Who knows. That company is in no position to confirm that Telexfree is compliant with all US laws. Ultimately, courts determine such things.
BEFORE they hired KT.
People know that KT is advising i-payout and its stable of clients on compliance
An assertion of Telexfree legitimacy by I-payout is piggybacking on KT’s involvement.
Time for Kevin to make another exculpatory video.
MAPs shut down U.S. business operations today. U.S. Citizens can no longer buy credit packs.
Dear Mr. Thompson:
I have been doing some due diligence on the below named company and they claim they are using your legal services to be compliant in the United States.
Can you tell me if this is accurate or not, I know your limited by attorney-client privileges what you can reveal. Thanks
ormeusglobal