ZTeamBiz vow to “bring back” Zeek Ponzi excitement
Despite the hundreds of millions of dollars lost by affiliate investors in the Zeek Rewards Ponzi scheme, fourteen months after the SEC shut it down there are still those running around professing its legitimacy.
One such group is Robert Craddock’s ZTeamBiz who, in addition to swearing Zeek Rewards wasn’t a Ponzi scheme, look set to spearhead attempts to reintroduce the MLM industry to the Ponzi points revenue sharing model.
In an announcement published on October 18th that is full of Rober Craddock’s signature crackpottery, ZTeamBiz begin by explaining, in addition to operating on an implied >100% ROI guarantee over 90 days, why Zeek Rewards was so popular:
Why Zeek Rewards gained so much momentum
Simply, it was a revenue share model; the revenue sharing business is a new form of multi-level marketing. Revenue Sharing also known as a rev-share, this model has a unique compensation plan that breaks the mold of a traditional MLM company.
Unlike some MLM’s a rev-share company rewards its affiliates for giving away samples to attract customers.
The marketing technique of sampling is nothing new, just simply visit your local Sam’s Club, B.J. wholesale, food court at mall or any membership store where it’s done non-stop.
This highly effective new approach in network marketing makes sense to get new customers to try products or services. By giving away value to potential customers in order to get them to try products and or services builds a customer base very fast.
This word of mouth advertising with the incentive of a product sample is the complete opposite or simply it was the revenue share model, In MLM companies affiliates are trained to sell and recruit.
In a revenue sharing opportunity people are trained to give and share. This is the key reason the growth is so explosive.
First off, there’s nothing new about Ponzi schemes. The Ponzi points model was new sure, but the broader concept of taking in new investor funds to pay out existing investors has been around for almost a century.
As for ‘a rev-share company rewards its affiliates for giving away samples to attract customers’, that might have held water if the action of giving said samples away did not trigger the implied guarantee of a >100% ROI on every dollar spent on samples.
It is on this point that Craddock’s comparisons to Sam’s Club,B.J. Wholesale and food courts in shopping malls in the next paragraph fall flat.
And despite Craddock’s insistence that the Ponzi points model was ‘highly effective new approach in network marketing makes sense to get new customers’, as per Zeek Rewards’ financial records,
Less than 10% of daily revenues come from actual retail sales.
Approximately 98% of ZeekRewards’ total revenues, and correspondingly the purported share of “net profits” paid to current investors, are comprised of funds received from new investors.
Despite generating $600M in revenue, 2% or less of that revenue was retail.
And just how “effective” was the facade of sample marketing to mask the Ponzi points scheme in reality?
Almost none of the VIP Bids given away by Qualified investors are actually used on the Zeekler penny auction website.
Of approximately 10 billion VIP Bids purchased by or awarded to investors, less than one-quarter of one percent have been actually used in auctions on the Zeekler penny auction website.
Wanna take a stab in the dark guess at whether or not non-Ponzi points sample marketing has a sample consumption rate of less than one-quarter of one percent?
As hilarious as Craddock’s opening statements are, I’m going to preface the next paragraph with a warning. If you’re sitting on a chair and reading this you might want make sure there’s a cushion or some other soft surface for you to land on before continuing on.
In his next paragraph, Craddock gets the root of why he believes Zeek Rewards and the Ponzi points business model isn’t a Ponzi scheme (last warning about placing that cushion):
To the uninformed and outsider it appeared as you were depositing money and earning interest on the funds, but affiliates were instructed to accurately state the moneys used to purchase bids were not an investment and for each bid purchased you received a point that had an expiration date of 90-days.
According to Robert Cradock and ZTeamBiz, Zeek Rewards was not a Ponzi scheme because affiliates were instructed not to refer to is as such.
Y’know in the same way that even if an animal looks like a duck, walks like a duck and quacks like a duck – that it isn’t a duck unless someone states it’s a duck.
I know I mentioned the cushion thing twice, but I’m sure some of you didn’t realise just how hilarious Craddock’s “Zeek was not a Ponzi scheme” was going to be. Let’s give those readers a few moments to recompose themselves up off the floor.
…
…
Alright. Unfortunately the rest of Craddock’s update isn’t nearly as comical as his opening few paragraphs, however eyebrows are raised at the claim:
This hybrid MLM business model is still evolving and attracting a ton of people.
By “evolving” I guess Craddock means “moving to China and keeping a low-profile”, otherwise I have no idea what he’s talking about.
After the Zeek shutdown, every Ponzi points MLM revenue-sharing business has either collapsed or shutdown “due to legal concerns” shortly after launching.
Today there are only two major Ponzi points Zeek Rewards clones still operational, WCM777 and Better Living Global Marketing. Both businesses are based in Hong Kong and both are starting to show traits of the classic two-year Ponzi “we have to pay out more than we are bringing in” life cycle.
WCM777 recently abandoned US operations citing a failure to “abide by local US law”, and BLGM is struggling to cope with the problem of bid inflation the Ponzi points model brings with it.
As we work to explain the events and advantages of what we have all learned over the last 14 months we will feature some unique opportunities that are bringing back the excitement once enjoyed.
Despite closing out the announcement by claiming to have learnt something, what exactly Craddock and the rest of the ZTeamBiz crew have supposedly learnt is a mystery.
The fairness and high success rate of this plan allows the average person a chance for success.
The reason a rev-share business works so well is because there are no special skills or training needed. In addition, recruiting and signing up other promoters is optional.
The above paragraph precedes the “we learned stuff” one above, and clearly spells out the flaws of the Ponzi points business model. No recruiting, special skills or training is required because the sole determining factor for ROI payouts is funds being deposited by affiliate investors.
Got real world money you can exchange for virtual Ponzi points? Great! Hand it all over and you too can be “successful”.
Craddock ends the announcement with the following sign-off:
Until next week unless something new happens…
Perhaps in his next update Craddock can inform his followers on how much the Zeek Receiver is requesting he pay back to affiliates, and whether or not he’s returned the money yet.
Clawback’s a bitch.
What I find interesting is that SEC investor alert you linked earlier. It contains a link to an SEC article dated 41 years ago: 1971, where they ALREADY realized that many alleged MLMs are investment scams / Ponzi schemes claiming to “profit share” through selling stuff.
How they really work is you buy in and they promise to give you a share of profits. That’s investment and fits the Howey Test. What’s more, perps who promote this scheme can be charged as violators of Securities act as Unregistered broker of securities.
Only goes to prove there’s nothing new under the sun… except victims and scam disguises.
http://www.sec.gov/rules/interp/1971/33-5211.pdf
I fell off my chair onto a cold, hard floor the first time.
The second time, I heeded your advice and got a cushion.
So, Craddock is basically hinting at using a different set of words the next time around so it won’t sound so much like a ponzi… while it is still a ponzi.
Got it.
I believe the lesson should have been “don’t sit down at all”. 😉
Of course, those ‘in too deep’ would insist “Someone pushed me” or “this chair was about to collapse any way” or “falling off is good for my butt”. 😉
Exactly. Lol!
Quoting the ZTeamBiz/Craddock explanation on how Zeek supposedly got so popular:
I wonder how long something remains a “new form of multi-level marketing” in the ZTeamBiz Branch of MLM La-La Land.
AdSurfDaily unofficially rolled out its “revenue-sharing” program SEVEN years ago this month. (The precise launch date isn’t clear because the ASD racketeers were running a precursor revenue-sharing Ponzi scheme that morphed into ASD after insiders raised concerns that ASD’s previous name — DailyProSurf — sounded too much like 12DailyPro. 12DailyPro was taken down by the SEC in 2006.)
February 2014 will mark EIGHT years since the SEC brought the 12DailyPro Ponzi case.
Along those lines, the CEP “profit sharing” Ponzi scheme taken down by the SEC in 2007 was born in 2005, coming up on NINE years ago. The CEP receiver sued a bunch of promoters, something the Zeek receiver is prepping to do now.
Moreover, the PhoenixSurf prosecution was brought in 2007 and will be a full SEVEN years old in July 2014.
“New?” Only in MLM La-La Land, where schemes are born and die, only to be resurrected in a new form that perhaps is cosmetically different but has the same internal Ponzi mechanics. Put another way, Zeek had the same body parts as ASD, but had a different face and spoke in a slightly different language: ASD was “advertising”; Zeek was “auction.”
One of the most remarkable things about Zeek is the volume of information longtime serial promoters had to overlook before deciding to push it. The ASD complaint and companion documents on the civil side of things included both the 12DailyPro and PhoenixSurf complaints, for example.
Beyond that, 12DailyPro operated from Charlotte, practically in Zeek’s back yard. The complaint against CEP was brought in Raleigh, also in North Carolina. Paul Burks had to know about those cases (plus ASD), if not as an MLMer, then as a consumer of media in North Carolina.
There is ZERO chance that the segment within Zeek that races from one fraud scheme to another despite the well-publicized prosecutions of similar “opportunities” or virtual clones didn’t know that Zeek was vulnerable under the federal securities laws.
Oz covers a lot of that at the URL (below). In my view, the story shows the rank disingenuous and self-deception required for such schemes to thrive and is one of the most important MLM stories ever written:
https://behindmlm.com/companies/zeek-rewards/ceo-paul-burks-admits-zeek-rewards-a-ponzi-scheme/
IMHO, Zeek gained “so much momentum” because a bunch of MLM hacks and willfully blind hucksters determined that Paul Burks was an adequate-enough rube who’d become the central focus of any investigation that followed — and that they’d be free to proceed to their next scam and do the same thing all over again.
The hacks/willfully blind hucksters gamble that nothing criminal will stick to them and that the worst that will happen is a civil clawback action. Any prison time will be done by the rube, who’ll no doubt get supportive forum posts and expressions of sympathy from unindicted (or unknown) co-conspirators on their way to their next scam in which they’ve made the calculation that a right-leaning, congenial rube is at the helm.
It is my theory that Burks was manipulated by MLM’s Steroidal Puppeteers in the same way ASD’s Andy Bowdoin was manipulated and that some of the people manipulating Burks to perform like a trained seal also manipulated Bowdoin.
PPBlog
P.S. In 2008, some of the ASDers were talking about the company/Andy Bowdoin engaging in a venture with “an ebay-style company.”
One has to wonder if what later emerged as Zeek was in the planning stages back then — probably not named Zeek yet, but with the same “auction” concept tied to an MLM firm.
Even in 2008, the “advertising” Ponzi scheme using the purported “revenue sharing” model was well on the Feds’ radar. The “auction” revenue-sharing model may have been the next step in the evolution of daily ROI schemes. By their very nature, such schemes require new forms because the earlier forms become radioactive.
Revenue share model in “MLM” was a KNOWN disguise for unregistered securities / investments. SEC knew this back in 1971 after they prosecuted Glen Turner for his “Dare to be Great” scam.
http://www.sec.gov/rules/interp/1971/33-5211.pdf
The reason Zeek was so “great” because it is too good to be true “do almost no work and get paid tons of money”, yet it sounds just plausible enough to people who know nothing.
Tells you how much shit Craddock knows. No matter how much you spin ****, it’s still ****, albeit, more… spreadable.
Darn it, did I just repeat myself? Argh!
My friend was in Zeek and he was doing really well, then the next thing you know he wakes up in the morning and boom the site has disappeared, not good for him.
Any who i wanted to drop by and say you are posting some amazing stuff bro keep it up 🙂
He *thought* he was doing well.
If he was actually doing well, then he’s now subject to clawbacks. But I imagine “doing well” for him was just like all the other die hard Zeekers, seeing numbers on a screen and thinking they mean money in the pocket.