Xtreme Pro System abandon matrix cycler Ponzi model
The fallout of the SEC’s takedown of the Achieve Community matrix cycler Ponzi scheme continues, with news today that Xtreme Pro System are pulling the plug on their matrix-based compensation plan.
In a conference call held last night, owner Johnny Ganoza (right) admitted the decision was based on the recent regulatory action taken against the Achieve Community:
We can no longer run the matrix side of things in Xtreme.
This past week we had people, members talk about the other programs that went down or was shut down.
As I mentioned, I did not want to shut down our business, but we had to change the foundation of our compensation plan.
The structure of our matrix is not good for business here in the US.
Whereas Achieve Community saw affiliates invest $50 on the promise of an $800 ROI, Gonza’s Xtreme Pro System positions cost $45 and pay out $300.
In an effort to pay lip-service to the SEC, who might be watching, Gonoza rolled out the pseudo-compliance explanations:
I have always said we are selling a blogging platform with an income opportunity and members can purchase multiple blogs for their niche market. Meaning open a different blog for different subjects you want to write about.
However the explanation falls apart when one considers that investors often purchase tens, if not hundreds of positions in matrix cycler Ponzi schemes.
Furthermore, a check of product utilization across Xtreme Pro System investors would likely reveal a poor adoption rate.
I think I’d be being pretty generous to suggest even 1% of the funds invested in matrix positions had affiliates actually use the attached blog they receive per position.
Many started to compare our complan with another programs complan and many people looked at it as if we were the same. But we weren’t. We have a product with an income opportunity.
And Achieve Community had banners. Having a product isn’t good enough, with modern-day Ponzi scheme often designed to be bundled with products and services.
Another matrix cycler Ponzi scheme that shut down after Achieve’s admins were busted was Trinity Lines. Their pseudo-compliance product was $50 religion-themed image downloads.
Later I learned that despite that we had a good product, our payment structure was not good.
Really? So uh, using newly invested affiliate funds to pay off existing investors is “not good”?
Well gee… somebody probably should have told Johhny that a bit earlier.
The dilemma for Ganoza now is that he has thousands of dollars invested in matrix positions, with the owners of the positions expecting to be paid the advertised ROI.
His solution?
The Admins and I are putting something together to help those who are in the matrix now… who have positions.
I am working on a plan to use our company profits to pay out the positions ($300).
With affiliates no longer investing in matrix positions, you’re probably wondering where Xtreme Pro System’s “company profits are going to come from.
Ganoza explains,
We can accept purchase for ads credits, but that does not buy you a positions.
Sales we make from selling the blogging platform to customers, I would like to use part of the company profits to payout the remaining positions in the system.
When exactly Ganoza first shared this solution with affiliates is unclear, but the idea appears to have gone down like a ton of bricks.
Most of you did not agree with this and wants to be refunded. We will have a form for you to get refunded but all we ask is for your support.
Let’s face it, Xtreme Pro System does not have nowhere near a significant amount of retail sales activity (if any) to cover the $300 ROIs Ganoza advertised.
It’s affiliate investors know this, hence the “give us our money back” run on the bank scenario.
Yet again, it looks like we’re going to see the admin of a scam attempt to turn it legit (50% single-level commissions on the sale of the blog platform), and fail miserably in the process.
Here’s some feedback from Xtreme Pro System affiliates upon hearing Ganoza’s latest announcements:
I think the majority of the membership will be asking for refunds. One member has already posted that he has submitted a paypal dispute.
Might as well start refunding everyone , no one is going to stick around no matter what they do now.
Affiliates engaged in selling products and services to retail customers who are excited about earning more per retail sale they make, or Ponzi investors upset Ganoza will not be paying them their $300 ROI?
You tell me.
It seems like a lot of MLMs have dumped lately. Wake Up Now and Achieve Community are two that stick out in my mind.
Zeek was taken down last year too, wasn’t it? Is the network marketing industry normally this turbulent or is the landscape changing?
Hopefully anyone who wasn’t aware they were investing in a fraudulent scheme and ends up losing money will file a complaint with the appropriate agency/police department.
What you’re seeing is not the “Network Marketing Industry” in turmoil.
It is a bunch of criminals running ponzi and pyramid schemes pretending to be in the “Network Marketing Industry” that are in turmoil
Nope. What you saw is a bunch of pseudo-MLM schemes that pays lip service to MLM and wants to hide under its wings… until the authorities come calling.
Ah, I see. I guess this type of MLM is all I’ve known.
The “traditional” MLM like NuSkin, Amway, Mary Kay etc. are too “boring” to be of interest to new participants. Mostly because they require SELLING something (part of Amway Safeguard rules).
The pseudo-MLM schemes usually skip the physical selling as they usually deal with virtual goods (ebooks, blogs, ad banners, bids, positions…)
But we’re getting a bit off topic.
Zeek: More than 2 years ago, August 17 2012.
TelexFree: Almost 1 year ago, it filed for Chapter 11 on April 13 2014.
1. People will not change. There will probably always be a market for various “opportunities”. There will probably always be a lot of people chasing dreams.
2. Technology will change. It will affect many different areas of business including MLM companies, e.g. it may become more difficult to get people to believe in certain ideas. Certain marketing methods may be affected.
Both those two statements were general statements. The markets for MLM and other opportunities have probably always been that turbulent. It has only become more visible because of better access to information.
“The difficult part”
The most difficult part is the first one, “people will not change”. They will continue to repeat the same pattern over and over again. Some will invent new scam concepts, and many will fall for them.
I can not access my account.
What is funny is that one of the major promoters of this at MMG was going on and on about how honest and trustworthy the admin was of this program, and how great it was and would last a long, long time. He wanted everyone to post BOOM when they got paid.
So when this bit the dust I had fun posting: BOOM It’s over. Seems he doesn’t have a sense of humor nor appreciates sarcasm.
Nor will you for a short while. Here is what Johnny had to say:
You should have received this information in an Email from the admin. Not sure why you did not get yours, but you may need to contact support so you do receive the updates.