Passive Earner Review: Online investment club & shares
Passive Earner operate in the advertising MLM niche and identify “Brian Basser” as the company owner on their website.
Corporation registration details dated 10th of September 2014 for LandWhale Enterprises Inc. in Delaware are also provided, with Passive Earner claiming to be “owned” by the entity.
I wasn’t able to find an MLM history for Basser, however he is credited with ‘recently (having) had a gig working for MyTrafficValue.com‘.
A visit to MyTrafficValue reveals it to be an investment opportunity touting “186% and 250% investment plans”.
The nature of Basser’s alleged “gig” with MyTrafficValue is not disclosed.
On the Passive Earner website Basser is also credited with having ‘over 25 years of programming experience‘. An example of Basser’s programming experience can be viewed over at his LandWhale website (“landwhale.net”):
Read on for a full review of the Passive Earner MLM business opportunity.
The Passive Earner Product Line
Passive Earner has no retailable products or services.
Affiliates join the company and are then encouraged to either ‘advertise to build your Passive-Earner downline‘ or ‘buy shares in the company and earn dividends from profits earned.‘
The Passive Earner Compensation Plan
The Passive Earner compensation plan revolves around affiliates signing up and then investing in shares.
There are four Passive Earner affiliate options available:
- Free – no cost
- Novice – $5 a month
- Advanced – $10 a month
- Expert – $20 a month
The primary difference between these options are the recruitment commissions paid out on share purchases:
- Free – 10% on level 1
- Novice – 30% on level 1, 5% on level 2, 3% on level 3, 2% on level 4 and 1% on level 5
- Advanced – 40% on level 1, 8% on level 2, 5% on level 3, 3% on level 4 and 2% on level 5
- Expert – 50% on level 1, 12% on level 2, 8% on level 3, 5% on level 4 and 3% on level 5
Share Investment ROIs
Once a Passive Earner affiliate has signed up they are then able to purchase shares.
The company has been divided up into one million (1,000,000) shares. Each share has an initial value of $.10 when the company opens for business.
This values the company at $100,000. This figure is an estimate of the value of the domain, its traffic, the code and potential revenue.
Once each month a dividend is paid to shareholders based on the Net Profit of the company. Each share is worth .000001 * net profit for the month.
Revenue used to pay share ROIs is identified as being sourced from affiliate membership fees:
At the moment profits are derived from one source: Membership fees.
Joining Passive Earner
Affiliate membership with Passive Earner costs between nothing and $20 a month:
- Free – no cost
- Novice – $5 a month
- Advanced – $10 a month
- Expert – $20 a month
The primary difference between the available membership options is commission percentage payouts when recruited affiliates invest in shares.
With nothing being sold to retail customers, advertised investment returns via shares and 100% of the revenue used to pay out said ROIs, Passive Earner functions as a Ponzi scheme.
Investors sign up and then start investing in shares on the promise of an eventual >100% ROI.
With 1000 paid members, Passive-Earner.com should be able to pay 5% – 10% dividend per month to shareholders. That is to say, if you spent $100 on shares, your dividend would be between $5 and $10.
Call me cynical, but I doubt Brian Basser has registered LandWhale Enterprises Inc. or Passive Earner with the SEC. This means the company is likely engaging in the offering of unregistered securities.
Passive Earner’s response?
IS THIS BUSINESS SUSTAINABLE?
Yes! This business is 100% sustainable. The business model here is that of an online investment club.
Investment club or not, that in no way negates the legal issues surrounding the offering of unregistered securities to their investors.
Potential future revenue sources such as “merchandising, games, advertising, traffic exchange, and more” are identified on the Passive Earner website, but right now all that’s happening is new affiliate funds are being shuffled around to pay off existing investors.
This is evidenced by Passive Earner’s “no refunds” refund policy:
There are absolutely no refunds. All purchases are final.
Naturally the reason Passive Earner cannot offer refunds is because the moment you hand over your money, it’s used to pay off those who invested before you.
As with all Ponzi schemes, once new investment slows down Passive Earner will struggle to deliver ROIs via their virtual share returns.
Initially this is likely to result in a sell off of shares, which will be picked up by the more gullible of investors. Without new investment however share dividends will continue to decline – and when there’s nobody left to purchase shares desperate investors are trying to flog, kaboom.
But that’s of course only if the SEC don’t step in first…
the certificate of incorporation of landwhale enterprises.inc dated 9/10/2014, delaware, says in point 4:
i don’t know what to make of this : ‘authorized to issue’.
on the passive earner facebook page a post dated 10th oct, claims they have got 500 investors on board already . not bad for a guy on a bus with a computer and some cats ! 🙂
in an earlier life, in AD 2000, brain basser had a paying job:
one would think, a guy who can out think computers, would at least read up SEC rules for securities offerings. it’s just like 2 pages !
From that same Passive Earner Facebook page:
How does PA then not fail the Howey Test ??
passive earners has already clocked 500 members , so they cannot call themselves an investment club .
secondly to function as an investment club they should be incorporated as such . the incorporation of landwhale enterprises .inc in delaware, makes no such clarification .
as recently as april,2014 basser was pushing another passive earning ponzi called united group international UGI. he claims he helped build that website.
basser must have thought , hey! when i can build the website why not launch my own personal ponzi scheme ? i have a bus and two cats to feed after all !
You’re becoming quite the little investigator there.
What’s it feel like being on the “other side”?
We Yanks call that “RVs” (recreational vehicles).
passive earner has undergone some changes. brian basser is now selling some branded sub domain pages which act as referral links to passive-earner.com .
and some bitcoin mining shit .
check it out.
Had a look at the compensation plan.
Looks the same to me. Whatever they add on to that is irrelevant.
Hi, I read your review of passive-earner.com and I am very happy to receive the attention of your fine blog!
You’ve done a good bit of research into the company and the passive-earner program and you made a couple of errors I would like to clear up if I may. I understand that this new kind of business model can be a bit confusing.
Firstly, Landwhale Enterprises, Inc. is not a publicly traded company, and I am not required to file with the SEC to sell shares to raise capital. Shares are equity in Landwhale Enterprises, Inc. and sales do not contribute to revenue of the company.
You do not need to be a paid member of passive-earner.com to purchase shares. Owning shares does not confer any benefits of paid membership.
Secondly, we have a fine product that is specifically tailored for the online investment community. With your membership you receive your own passive-earner.com subdomain and portfolio pages. Check out what one of our active members is doing with his at (Ozedit: Link to scam directory removed).
The Novice membership allows you to have 2 portfolio pages, Advanced 5, and Expert 15. These pages have a chat, and voting bar for viewer engagement and they basically function like an investment monitor page that you use to market your investment opportunities, while at the same time you are marketing Passive-Earner.com.
You can record and display all your investments and cashouts in each program and in your back office you have full control.
This is no ponzi. We sell memberships and the maximum commission paid is 78%. The rest goes to revenue which is used to pay expenses and 100% net profit is paid to shareholders.
We will be continually improving the site and adding new features for members that make passive-earner well worth the $5 per month you will spend, and if done right, you’ll make more than that back! We’re introducing a new traffic exchange and token cycler real soon.
I urge you to please take a moment and have another look at passive-earner.com and perhaps consider making some corrections to your review.
I’ll also mention that this site is largely inspired by MyTrafficValue. While I worked there, I often had discussions about how you might build a similar program, but without the games and investment queues. A monthly membership plan was a prevailing idea for sustainability.
And I got real familiar with investment monitors, since I built the one on MTV, and then retooled it a couple times to what it is now. Passive-Earner.com incurs no debt in its operation, and pays 100% net profits to shareholders.
In closing, if you’d like a bit more info, please read my post here: (Ozedit: URL removed, login required). I think you need to be logged in to read, though.
Thank you kindly for your time.
Peace & Prosperity,
President, Landwhale Enterprises, Inc.
P.S. I gave up the RV life, but not the cats. For some reason I just like the name Landwhale. I really don’t keep that site up to date like I should.
You’re offering unregistered securities. Call them shares, call them whatever you want – you’re soliciting investments from affiliate on the implied promise of an eventual >100% ROI.
What, you think you can just declare yourself a non-publicly traded company and securities laws are thus null and void? Pull the other one chief.
What you receive with membership is irrelevant.
You recycle 78% of invested funds among those who have already invested and pocket 22% yourself.
Of course it’s a Ponzi scheme.
The recruitment commissions paid also drag the opportunity into pyramid scheme territory, making Passive Earner a Ponzi/pyramid hybrid.
You failed, miserably. This is just as much of a Ponzi scheme as MyTrafficValue is/was.
Consider this a reply to the email you sent me containing the same concerns.
@ brian basser
you are a software expert and shit man ! you cant figure out ‘ponzi’ or ‘pyramid’ ?
You are a bit confused about shares and securities. Maybe I am as well, but my legal and tax advisers have explained to me that is perfectly legal to sell shares in my company in exchange for an equity position. No filing with the SEC is required.
“You recycle 78% of invested funds among those who have already invested and pocket 22% yourself.”
That is incorrect. We are not “recycling investments”, we are paying commission on sales. It’s a 5-level comp plan that is very generous.
The *maximum* commission paid on an upgrade is 78%, which will rarely happen. The rest goes to revenue. Once expenses are paid, the rest is paid out as dividends to shareholders. We have a back office page with a balance sheet available to shareholders, which provides all details. I am majority shareholder, I make the most. It’s my business, it’s been a lot of work, and I intend to make a living from it. Dividends should pay nicely in time.
“What you receive with membership is irrelevant.”
Now you’re just contradicting yourself. Of course it matters what you get for what you pay. You said so yourself in the initial review: “Passive Earner has no retailable products or services.”
I agree that many, many MLMs run just the comp plan with nothing more than an email list server or digital books as “products”, but passive-earner.com is a custom-built site offering a fresh and engaging way to advertise your investment opportunities.
Thanks again for your kind attention to Passive-Earner.com
You have a site called “passive earner”, you claim you do revenue share, it’s referred to as an investment club and you even call your prospects shareholders.
And you claim you aren’t offering an unregistered security?
Landwhale Enterprises, Inc. is not a publicly traded company. It is privately held. If you own shares, you are called a shareholder. Read up.
You know, you should always do it yourself. You just can’t trust anyone… especially high-paid tax accountant and lawyers.
I read that SEC page and it looks like maybe I do need to file a “Form D”: sec.gov/about/forms/formd.pdf
I’ll go ahead and do that. Thanks again for all the attention. And for the help! We are a new business with a new kind of model, and trying to keep it legit. We need all the help we can get.
I’m really glad one of our members alerted me to your blog.
Filing a Form-D won’t make you exempt from offering unregistered securities.
You are offering securities to the general public – this is not private and will not qualify you for an exemption. You aren’t offering to “accredited investors”.
There’s a reason your accountants and lawyers did not suggest you file a form-D.
The only way you can impact compliance is by changing your business model. Pseudo-compliance is a waste of time.
If you actually read what you posted, you’d see it says “all but the smallest of public companies”.
“All but”. Whether you are a publicly traded company or not is irrelevant.
You are offering securities to the general public. You are not registered with the SEC, therefore you are engaging in the offering of unregistered securities.
This is a crime in the US.
And you have no retailable products or services. All revenue is sourced from affiliates and recycles to pay off existing investors.
What you bundle with affiliate membership and/or investment is entirely irrelevant (affiliates are not retail customers).
This is evidently your first rodeo. You’re not the first Ponzi admin to assert affiliates are retail customers, nor are you the first to think filing a Form-D makes you exempt from federal securities law.
You’d be wrong on both counts.
There is a difference between a pyramid and a ponzi, IMO. Passive-Earner is MLM, which makes it a pyramid. You are right that MLMs exist in a “gray” or “shady” area as far as the SEC is concerned, yet they continue to exist and operate. We’re doing what we can to stay in the light area of gray and keep it safe for members.
We will just have to disagree on the nature of the products and/or services we offer. The only reason that would be contested is if there were to be a law suit or a federal investigation. My intention is to offer a unique site with features and functions that are very clearly and demonstrably worth what you pay.
At any rate, this has been a very constructive discussion. I don’t mind your negativity in the least. It’s good to face it and learn how best to confront it. Thanks for the opportunity.
You’re engaged in offering unregistered securities and you pay recruitment commissions. That makes you are pyramid/Ponzi hybrid.
Only if they choose to operate in that area. If you’re selling products to retail customers and have significant retail activity you’re not operating in said grey area.
Pseudo-compliance = meaningless bullshit.
There’s nothing to disagree about. You have no retailable products or services.
So run the scam and hope you don’t get caught? That’s reassuring.
via a Ponzi scheme…
Sounds like you’ve learnt nothing. What, you thought your crap about filing a Form-D would be the end of the discussion?
This isn’t Facebook son. Best of luck with the scamming, you owe it to yourself to at least acknowledge it.
The only thing really meaningful in any of this is whether or not we have a “retail” product or service. The rest is moot.
We’re going to have to disagree on that point because I don’t intend to argue it. I think there is enough information on this thread on both sides for readers to judge for themselves whether to join Passive-Earner.com.
What we offer, I can only hope, speaks for itself. You can try it free for 7 days with no obligation.
Thank you again for allowing me to be part of the discussion and posting my comments.
You can’t argue it because Passive Earner has no retailable products or services.
Is there an echo in here?
Oh it does. And anybody who can’t see the Ponzi for the trees is either an investor or running the scheme.
@ brian basser
a form D filing is not going to save you . wisen up .
you seem like a nice guy , it would be sad if you got in trouble.
if you’re working so hard at this , why not create something right and legal ? you’ve only just begun , there’s time to turnaround . firstly, Just Stop selling shares of your company –that is so Not Right !
I’ve looked into all the legalities I can and there is nothing illegal about me selling shares in my privately held corporation. (This is my 3rd startup business; 1st one with MLM comp plan.)
The shares were issued legally by the State of Delaware and I am entitled to sell them to whomever I wish. The only legal requirement (as long as they own less than 25% of the corporation) is that they agree to the shareholder agreements contained within the corporate bylaws available on the site.
Ideally, a signed copy of the agreement would be retained in our corporate records. In this digital business we are using the check box on the form to indicate agreement. I don’t anticipate any problems.
Filing Form D does not exempt the corporation from any compliance, it is a disclosure statement only. It is not required, except if I want to disclose information to the public about my private corporation. This would cancel out any argument that I am selling “unregistered securities”, since Form D would essentially “register” them.
I believe you are confusing publicly traded companies with privately held corporations. The SEC regulations deal with publicly traded companies. We are not an “investment club” trading in public stocks.
We only buy and sell our own shares of the one private company that we own. It may be new and different, but nothing illegal about it that I have found, and I don’t plan to test it in a court.
MLM + shares connected to said MLM opportunity + not registered with the SEC = pending unregistered securities catastrophe.
Whether your company is private or not is neither here nor there (otherwise every MLM Ponzi scheme would use this as an excuse).
The fact of the matter is you’re offering securities to the general public (affiliates) through your MLM opportunity.
The general public (your affiliates) don’t count as Form D approved accredited investors.
Offering shares via an MLM opportunity, as you’ve admitted, is something you haven’t done before. We’ve been down this rodeo a few times…
The MLM is not connected to the shares. Passive-Earner.com is a website run by Landwhale Enterprises, Inc. Owning shares confers no benefits of membership in Passive-Earner.com.
We are only using the web interface on Passive-Earner.com to facilitate the sales. No commissions are paid on sales of shares and sales of shares do not contribute to revenue.
With your concerns in mind, and I have considered this already, is to start a corporate website and move the share sales over there. That would eliminate any confusion.
It makes a ton of difference if you own a privately held corporation or you own shares in a public company. Really, it’s a huge difference. And we have a retail product/service, too. I get where you’re coming from, though. Thanks for the challenges.
Yeah the pseudo-compliance won’t matter if the regulators peek in.
You’re offering the shares through the MLM opportunity to your affiliates. However you’ve set it up is irrelevant, it’s still a public offering of what are currently unregistered securities.
But investment is being made on the implied promise of an eventual >100% ROI. That is key.
Nah. Means dick in MLM.
Selling shares in your MLM company through the MLM opportunity itself? Not gunna last too long if it takes off.
Thanks so much! And you, too, anjali. This whole discussion has been great and incredibly informative. I have much gratitude for your allowing my posts here, and I value your criticism.
I am working with a lawyer that deals a lot with MLM. He was crucial in getting zoograb.com all “compliant” (it’s an MLM, too), so I am trusting him with his advise. We are playing it a little loose here in the beginning. “If it takes off” as you say, we should have things all squared away.
Too little too late. You can’t undo the offering of unregistered securities.
One last thing… I moving forward with the project regardless, not that I won’t take your concerns into consideration.
There are several “early adopters” that love the idea and even more are finding the Investment Portfolio pages effective advertising.
Your readers can decide whether this program is a risk they want to take from the information presented on both sides… all the cards are on the table.
I hope you can take away from this that I’m not trying to scam anyone and my intention is to run a legitimate and long-term program that will earn me and all the rest of the members and owners a whole lot of money.
selling commissionable membership via MLM, with or without products attached, is an illegal pyramid scheme.
members investing in company shares , with hopes of 100% ROI , arising from false profit , is an illegal ponzi.
i hope you are not paying too much for your legal advice , brian basser , if lay persons on the internet can figure what’s wrong with your business !