VP of AddWallet bails, scheme about to collapse?
In yet another blow for the MLM revenue-sharing niche, news came in today that the Vice President of AddWallet has officially bailed from the company.
Whether an official announcement will be made remains to be seen, however social media buzz from AddWallet affiliates suggest Bradshaw left because he did ‘not want to relocate to South America‘.
Back in late March Bradshaw reassured AddWallet affiliates that, due to the company relocating to Ecuador, it would not suffer the same fate as Zeek Rewards.
[13:44] One of the first things that was wrong was that they (Zeek Rewards) were incorporated in the southern United States, they were incorporated in North Carolina and they were sitting ducks.
Y’know, once you have so much advertising people know you, you become global and they became a target.
So we saw all the way what happened here. So we incorporated in Ecuador, spoke to the lawyers in Ecuador. They said “this business model is fine”. So by doing that, we are offshore.
[5:10]The CFO, Dr. Logan Chamberlain, moved down in Ecuador and we saw an opportunity. We had a lot of meetings, we put a lot of things in place.
[5:50] We launched on January 7th. We’re an Ecuadorian corporation, owned and run by Ecuadorians. [6:09] We have our server here in Tampa.
[15:11] The Ecuadorian government loves us, welcomes us. We feel that, besides having our server in Tampa (Florida) right now, getting it, the servers are already in Ecuador, flipping the switch to speak, that’s the only thing left to do.
AddWallet use a near identical Ponzi points revenue-sharing model as Zeek Rewards, with the latter shut down by the SEC in August 2012 after being identified as a $600M Ponzi scheme.
Whereas Bradshaw’s announcement on the surface does appear to be somewhat abrupt, recent events surrounding the company seem to suggest otherwise.
Following the shutdown of e-wallet Liberty Reserve in late May, AddWallet repeatedly failed to pay out its affiliates whilst its daily revenue-sharing ROI plummeted.
AddWallet didn’t accept money from affiliates or pay them out via Liberty Reserve, but whether or not the company held any internal company accounts with the e-wallet has never been clarified.
The timing of AddWallet’s cash flow problems coinciding with the Liberty Reserve shutdown strongly indicates the company lost an unexpected great deal of funds in a short amount of time.
As AddWallet’s daily revenue-sharing ROI percentage plummeted well below 1%, the company initially blamed its problems on DDOS attacks, and vowed to implement security to fix the problem.
In an email sent out to affiliates, AddWallet advised
As most of you know we have had an unusually low profit share for the past few days. This was due to a large attack on our servers and slowed revenues of the company. Once all the servers are fully functional then revenues will begin going up once again.
This will correct itself over the next couple of days and everyone will see restored activity. We are an online business and we will experience such things from time to time so please, just be prepared for it and don’t panic.
We do have a talented group of people behind the scenes that help us through online attacks, so know that nothing will be permanent.
Despite the company’s promises, two and a half months later and things have only gotten worse. Widespread reports from AddWallet affiliates indicate a drastic and unexplained loss in advertising unit points (AddWallet’s version of Ponzi points), sporadic payments that are months behind and routine backoffice mayhem as a result of poor programming.
AddWallet did try to sell off $2000 “founder share” rescue packages a month or so ago in what appears to have been a desperate attempt to inject some funds into the scheme, however this appears to have garnered little interest amongst affiliate investors.
There were also talks about a mandatory cut in affiliate’s saved up AU points, so as to mitigate alleged losses the company had sustained due to ongoing fraudulent activity. According to affiliate reports, many of them have experienced an unexplained disappearance of well over 30%, with some reporting as much as 70% of their point balance have disappeared.
Finally about a month ago an “Advisory Council” also popped up, advising affiliates that they would now be the primary body responsible for communication between AdWallet and its affiliates.
Since then Brandon Bradshaw has rarely been heard or seen from, at least not until the announcement today that he is leaving the company.
If one was to reduce the typical Ponzi scheme to a movie script, the AddWallet story has all the common elements found in such a plot. DDOS attacks, hackers, stolen funds, payment delays, a backing off of direct communication between the company and investors and now management, largely considered to be the face of the company, abandoning ship.
Personally I think Bradshaw’s exit is nothing more than a carefully planned exit strategy. Two and a half months on and it’s clear that the funds entering AddWallet are wholly dwarfed by the ROI liabilities the company currently owes its investors.
Whereas typically these schemes collapse overnight and leave their affiliates holding the bag, for some reason AddWallet’s owners have decided a long and drawn out dead-horse beating demise is a more attractive way to go out.
The take away from all of this?
Proof yet again that no matter how you dress things up, affiliate-funded Ponzi schemes masquerading as MLM business opportunities simply do not work out in the long-term.