Federation Network fails to provide ownership or executive information on its website.

Federation Network’s website domain (“federation-app.com”), was privately registered on August 24th, 2023.

A marketing presentation hosted on Federation Network’s website cites “Sarah Cohen” as its CEO.

Cohen doesn’t exist outside of Federation Network’s marketing, making her a prime Boris CEO candidate.

In a January 8th Federation Network marketing video, we learn the actor playing Cohen speaks French.

The video is hosted by Halan Nelson, a French leader in the collapsed Mainet Ponzi scheme.

In an attempt to appear legitimate, Federation Network claims it has a $50 million insurance contract with Prudential Financial in the US.

In an attempt to verify this, a BehindMLM reader reached out to Prudential Financial.

Here’s the reply received from Prudential Financial’s Corporate Investigations Division;

Thank you for contacting the fraud investigations unit at Prudential Financial. The insurance certificate you attached is not genuine and in no way related to Prudential Financial, Inc. located in Newark, NJ, USA.

This appears to be a scam. Furthermore, there is no affiliation between Prudential Financial and any entity called “fdrtn network ltd”.

If you believe you have been a victim of a scam, you may do the following:

• Contact local law enforcement and report the fraud.

• You may also report the fraud on the FBI’s website for reporting internet crime – www.ic3.gov.

• Additionally, if you interacted with anyone using a messaging service like WhatsApp, you can report the account to WhatsApp as fraud as well.

• If you were using a mobile app related to this scam, you may also report the app to the app store from which you downloaded it.

Kind Regards,

Corporate Investigations Division

Federation Network also provides two corporate addresses on its website, one in the UK and one in Hong Kong. Neither address appears to have anything to do with the company.

Attached to these addresses is the shell company FDRTN Management Limited, registered in Hong Kong on February 22nd, 2024.

Due to the ease with which scammers are able to incorporate shell companies with bogus details, for the purpose of MLM due-diligence shell company certificates are meaningless.

As always, if an MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money.

Federation Network’s Products

Federation Network has no retailable products or services.

Affiliates are only able to market Federation Network affiliate membership itself.

Federation Network’s Compensation Plan

Federation Network affiliates invest funds on the promise of advertised returns:

  • invest $10 to $10,000 and receive 0.66% a day
  • invest $1000 to $5000 and receive 0.75% a day
  • invest $5000 to $200,000 and receive 0.83% a day

The MLM side of Federation Network pays on recruitment of affiliate investors.

Rank Achievement Bonus

There are fifteen affiliate ranks within Federation Network’s compensation plan.

Along with their respective qualification criteria, they are as follows:

  1. Starter – sign up as a Federation Network affiliate and invest $50
  2. Agent – maintain a $50 minimum investment and generate $750 in restricted downline investment
  3. Builder – maintain a $50 minimum investment, have two Starter or higher ranked affiliates in your downline and generate $2500 in restricted downline investment
  4. Associate – invest $100, have two Agent or higher ranked affiliates in your downline and generate $5000 in restricted downline investment
  5. Manager – maintain a $100 minimum investment, have two Builder or higher ranked affiliates in your downline and generate $10,000 in restricted downline investment
  6. Manager Senior – invest $200, have two Associate or higher ranked affiliates in your downline and generate $25,000 in restricted downline investment
  7. Manager Sapphire – invest $5000, have two Manager or higher ranked affiliates in your downline and generate $75,000 in restricted downline investment
  8. Director – invest $1000, have two Manager Senior or higher ranked affiliates in your downline and generate $200,000 in restricted downline investment
  9. Director Gold – invest $2500, have two Manager Sapphire or higher ranked affiliates in your downline and generate $650,000 in restricted downline investment
  10. Director Platinum – invest $5000, have two Director or higher ranked affiliates in your downline and generate $2,500,000 in restricted downline investment
  11. Ambassador – invest $10,000, have two Director Gold or higher ranked affiliates in your downline and generate $7,500,000 in restricted downline investment
  12. Ambassador Sapphire – invest $25,000, have two Director Platinum or higher ranked affiliates in your downline and generate $25,000,000 in restricted downline investment
  13. Ambassador Emerald – maintain a $25,000 minimum investment, have two Ambassador or higher ranked affiliates in your downline and generate $75,000,000 in restricted downline investment
  14. Ambassador Diamond – invest $50,000, have two Ambassador Sapphire or higher ranked affiliates in your downline and generate $250,000,000 in restricted downline investment
  15. Ambassador Royal – maintain a $50,000 minimum investment, have two Ambassador Emerald or higher ranked affiliates in your downline and generate $750,000,000 in restricted downline investment

Restricted downline investment criteria sees Federation Network exclude investment volume in an affiliates largest recruitment leg.

Similarly, required downline ranked affiliates are also only counted from smaller recruitment legs (largest is again excluded by volume).

Referral Commissions

Federation Network pays referral commissions via a unilevel compensation structure.

A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):

If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.

If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.

Federation Network caps referral commissions down ten unilevel team levels.

Referral commissions are paid as a percentage of funds invested across these ten levels as follows:

  • level 1 (personally recruited affiliates) – 10%
  • level 2 – 2.25%
  • level 3 – 1.5%
  • levels 4 and 5 – 1.25%
  • level 6 – 1%
  • levels 7 to 9 – 0.75%
  • level 10 – 0.5%

ROI Match

Federation Network pays a ROI match using the same unilevel compensation structure it pays referral commissions with (see “Referral Commissions” above):

  • level 1 – 10% match
  • level 2 – 7% match
  • level 3 – 5% match
  • level 4 – 2.5% match
  • level 5 – 2% match
  • level 6 – 1.5% match
  • level 7 – 1% match
  • level 8 – 0.5% match
  • levels 9 and 10 – 0.25% match

Profit Sharing Pool

Federation Network takes 2% of company-wide investment and places it into a Profit Sharing Pool.

The Profit Sharing Pool is paid out weekly to Ambassador Sapphire and higher ranked affiliates.

Rank Achievement Bonus

Federation Network rewards affiliates for qualifying at Agent and higher with the following one-time Rank Achivement Bonuses:

  • qualify at Agent and receive $37.50
  • qualify at Builder and receive $125
  • qualify at Associate and receive $175
  • qualify at Manager and receive $250
  • qualify at Manager Senior and receive $1250
  • qualify at Manager Sapphire and receive $3750
  • qualify at Director and receive $7500
  • qualify at Director Gold and receive $18,000
  • qualify at Director Platinum and receive $70,000
  • qualify at Ambassador and receive $220,000
  • qualify at Ambassador Sapphire and receive $800,000
  • qualify at Ambassador Emerald and receive $2,000,000
  • qualify at Ambassador Diamond and receive $5,000,000
  • qualify at Ambassador Royal and receive $15,000,000

Joining Federation Network

Federation Network affiliate membership is free.

Full participation in the attached income opportunity requires a minimum $10 investment.

Federation Network Conclusion

Federation Network represents it generates external revenue via real-estate investments.

“Banking partners” cited by Federation Network include several well-known banks:

Short of contacting each of these banks to confirm as with Prudential Financial, we can assume Federation Network has no partnerships by way of the company committing securities fraud.

As per the Howey Test, Federation Network’s passive returns scheme constitutes an investment contract. This means Federation Network’s MLM opportunity constitutes a securities offering.

A search of the SEC’s Edgar database reveals neither Federation Network or its FDRTN Management Limited are registered.

Thus at a minimum, Federation Network is committing securities fraud in the US. At the risk of pointing out the obvious, US banks aren’t working with newly created scams hiding behind shell companies committing securities fraud.

Things get even sillier upon consideration of Federation Network’s business model failing the Ponzi logic test.

If Federation Network is able to already generate 0.83% a day on autopilot, what do they need your money for?

Although proven false, Federation Network claims to have a $50 million insurance contract. 0.83% of $50 million is $415,000 a day.

And here’s Federation Network, less than a month old offering anyone access over the internet for free.

As it stands, the only verifiable source of revenue entering Federation Network is new investment.

Using new investment to pay affiliate withdrawals would make Federation Network a Ponzi scheme.

As with all MLM Ponzi schemes, once affiliate recruitment dries up so too will new investment.

This will starve Federation Network of ROI revenue, eventually prompting a collapse.

The math behind Ponzi schemes guarantees that when they collapse, the majority of participants lose money.

 

Update 31st May 2024 – Federation Network collapsed on May 29th. A reboot on a new website domain was launched on May 30th.