Despite a lack of retail a key focal point in several MLM-related enforcement actions over the past few years, there are still those who argue the legitimacy of chain-recruitment autoship schemes.

Typically in this business model, retail is either insignificant or absent altogether.

Instead, products are sold exclusively to affiliates, with participants in such schemes arguing that because affiliates are consumers, their purchase of product constitutes a retail sale.

The latest attempts to justify autoship recruitment can be seen over the past week in our LifePlus Review (comment #2 onwards).

What participants in non-retail MLM opportunities rarely touch on is that the recruitment of other affiliates who also purchase products is how they make money – with recruited affiliates then also required to do the same.

In other words its chain-recruitment. And no matter how much the value of the products is professed, at the end of the day it’s still a closed-loop income opportunity.

This is significant because without retail, there’s no way to determine actual product value. Logically speaking if a product did have market value, affiliates would be able to sell it to retail customers.

From an enforcement and compliance perspective, this results in the effective value of the product reduced to zero. In other words, it exists solely to perpetuate a recruitment-driven pyramid scheme.

Earlier this month the University of Illinois at Chicago and the SEC held a joint symposium to raise awareness.

The issue?

Combating Pyramid Schemes and Affinity Frauds.

Speaking at the event was Andrew Ceresney, Director of the Enforcement Division (typically the guys behind SEC litigation against MLM companies).

Not surprisingly, in his address Ceresney re-enforced the importance of retail in legitimate MLM. [Continue reading…]

JM Ocean Avenue came about following a merge between Ocean Avenue and JM International in 2014.

Ocean Avenue was launched back in 2012 by Fred Ninow and Ken Dunn. JM International was founded in 2009 by Joe Zhou, but outside of China is relatively unknown.

JM Ocean Avenue claimed the merger between the two companies ‘create(d) opportunities for distributors and customers by expanding to 25 new markets in six continents‘.

A month prior to the merge in June, 2014, Ken Dunn left Ocean Avenue. A year later in June 2015, JM Ocean Avenue affiliates began advertising HopRocket.

As above, HopRocket was initially billed as a “brand new JM Ocean Avenue opportunity”. At the time, it was claimed the JM Ocean Avenue affiliate-base had been pre-loaded into the company.

That fell apart a month later in July, with four JM Ocean Avenue executives (former Ocean Avenue staff) resigning.

HopRocket continued on as an independent MLM opportunity launch, now very much separated from its JM Ocean Avenue roots.

JM Ocean Avenue meanwhile moved its US headquarters to Los Angeles (the Ocean Avenue staff who resigned were based in Utah).

To date I haven’t seen specific clarification of what went down between JM Ocean Avenue and the four executives who resigned.

Today JM Ocean Avenue is headed up by Joe Zhou (right), who serves as Chairman.

Joe Zhou started as an independent business owner at a direct selling company with a worldwide reputation.

There he gained practical experience and knowledge about direct sales and soon became one of the most successful and recognized direct sales team leaders in China.

In 2006, Joe became the Vice Chairman of a newly established direct sales enterprise. In just 3 years, he was able to establish a name for that enterprise in China and lead it to become one of the most recognized direct sales companies in China.

Since 2009, Joe Zhou founded JM International and has since worked tirelessly to take the company to dozens of global markets, which are now encompassed in seven major regions.

I wasn’t able to establish whether the current JM Ocean Avenue management run the company from within the US or elsewhere.

Read on for a full review of the JM Ocean Avenue MLM business opportunity. [Continue reading…]

BehindMLM first reviewed CeraCoat Direct back in early 2013. Decent enough compensation plan and product, but a major problem with the opportunity was a lack of retail.

At the time, only affiliates were able to purchase products from CeraCoat Direct.

In late 2014 we reviewed Globally Positioned Partners, who at the time were the exclusive distributor of CeraCoat Direct products in the US.

CEO Ken Howard claimed that in its first year, Globally Positioned Partners ‘could easily grow to $100 Million Dollars‘.

GPP could easily achieve and sustain triple digit annualized growth of over 100% per year for the next ten years, which could potentially see GPP grow up to $50 Billion Dollars in annualized sales in just 10 years!

That didn’t happen.

Globally Positioned Partners followed CeraCoat Direct’s problematic compensation plan, with affiliates required to purchase products in order to qualify for MLM commissions.

A few months after our review, Globally Positioned Partners changed their compensation plan.

Retail commissions were finally clarified, with residuals paid out via a unilevel compensation structure. Unfortunately it was still entirely possible for an affiliate to self-fund commission qualification, and then focus solely on recruiting others who did the same.

A few months later in mid 2015, CeraCoat Direct severed all ties with Globally Positioned Partners.

Commenting on the split, CeraCoat Direct Founder Elio Keller lamented:

Ken was not successful and did create a lot of negative image, so we had to stop with him.

I did choose the wrong person, but it’s my fault, because I listened to his “crazy plans” and when he told me he was an MLM expert, I trusted him.

Big mistake, but we have our worldwide business and exist for over 20 years, so Ken was just a “lost of time and money” and now we are looking to the future.

A lot of persons warned me about Ken, but it was too late. Now I saw they were all right. . .

Around the same time CeraCoat Direct announced a new partnership with CeraCoat Unlimited, who were to take over distribution of CeraCoat Direct products in the US.

Unfortunately there is no information on the CeraCoat Unlimited website revealing who owns or runs the company.

The CeraCoat Unlimited website domain (“ceracoatunlimited.com”) was registered on February 9th 2016, with “Owen Greeson” listed as the owner.

The address used to register the domain is a residential address in the US state of Georgia, which matches the CeraCoat Unlimited corporate address provided on their website.

A Google search on the address reveals several results tying the address to Greeson.

Nothing much comes up with respect to Greeson’s prior involvement in the MLM industry, with his history and credentials unknown.

Read on for a full review of the CeraCoat Unlimited MLM business opportunity. [Continue reading…]

Hot off their acquisition of SiteTalk back in January, UniverTeam appears to be OneCoin’s newest source of gullible investors.

As of yet no official announcement has been made by OneCoin, however in the last few hours UniverTeam investors have begun announcing a merge between the two companies on social media.

The caption above reads “OneCoin company buys UniverTeam”. [Continue reading…]

BehindMLM reviewed Basic Reset late last year in December. The compensation plan looked good and the products fit their purpose, but what caught our eye were medical claims and testimonials published on the Basic Reset website.

Further research revealed Basic Reset affiliates making all sorts of claims in their own marketing material.

We highlighted this as a potential red-flag, as historically the FDA frown upon such claims in MLM advertising. Regardless of whether an MLM company or its affiliates make the claims, it is usually the MLM company who attracts the attention of the FDA.

Following publication of our review last December, the FDA purportedly paid Basic Reset a visit.

The FDA visit was discussed in a Basic Reset corporate call recently hosted on March 3rd. As reported by affiliate Randy Steen, you’re not going to believe the outcome. [Continue reading…]

LegalShield has leveled a series of scathing criticisms at the Direct Selling Association and its member companies.

A press-release published on LegalShield’s website on March 2nd cites “concerns about the lack of enforcement of the DSA’s Code of Ethics for its members” as the primary reason LegalShield has revoked its DSA membership. [Continue reading…]

Alleging Lyoness’ Terms & Conditions were “incomprehensible”, the Association for Consumer Information (VKI) in Austria took legal action against the company back in 2013.

In their lawsuit VKI referenced “61 vague and inexplicable clauses”. The consumer advocacy group claimed they’d ‘never seen so many incomprehensible clauses in one contract‘.

The contracts signed by the members contain many clauses the violate the applicable Austrian legal requirements.

Therefore the VKI has filed a lawsuit against Lyoness, through which we want to force Lyoness to stop using these clauses. As well as, most importantly, prohibiting them from relying on the content of those contracts that were signed earlier.

VKI sought to legally challenge the validity of Lyoness’ Terms & Conditions, which would force Lyoness to process refund requests from affiliates.

VKI won their lawsuit last year, however Lyoness were quick to file an appeal.

The Vienna Court of Appeal has now heard the case, with a decision made earlier this week rejecting Lyoness’ appeal in its entirety. [Continue reading…]

Not entirely sure why, but a new order in the Zeek Receiver’s litigation against Canadian net-winners has “reset” the trial with a new date in September.

Jury Trial reset for 9/6/2016 10:00 AM in Courtroom 2-2, 401 W Trade St, Charlotte, NC 28202 before Senior Judge Graham Mullen.

The trial had otherwise been scheduled to take place next month in April.

Bit of a ways off, but stay tuned nonetheless…

Footnote: Our thanks to Don@ASDUpdates for providing a copy of Judge Mullen’s March 2nd order.

Update 7th September 2016 – As per a 15th of August order, the Canadian Zeek net-winner trial has been rescheduled for February 13th, 2017.

No reason for the reschedule was provided.

Last we checked in with criminal proceedings against Kristi Johnson, her sentencing had been delayed until the resolution of Troy Barnes criminal trial.

Through the Achieve Community Ponzi scheme, Kristi Johnson and Troy Barnes solicited around $6 million dollars in fraudulent investment.

In the aftermath of Johnson’s guilty plea mid last year, she’s since forfeited $2.6 million in assets. [Continue reading…]

According to the “about us” page on the Life Leadership website, the company was ‘founded in November 2011 by eight entrepreneurs‘.

One of those founders appears to have since left the company, with the Life Leadership website today only listing seven; Orrin Woodward, Chris Brady, Tim Marks, Claude Hamilton, George Guzzardo, Bill Lewis and Dan Hawkins.

Of Life Leadership’s founders Orrin Woodward appears to be the most prominent, serving as Chairman of the Board.

Woodward (right) got started in MLM back in 1993, as an affiliate with Amway. This later morphed into a tool business, selling marketing and motivational tools to other Amway affiliates.

In 2001 Woodward took his tool-selling business fulltime, with the launch of “Team”.

As Team evolved over the years, it eventually morphed into a fully-fledged business opportunity of its own. This purportedly attracted the ire of Amway management, with Woodward and the company parting ways in the summer of 2007.

That same year Woodward claims his tools helped Amway generate some $200 million in sales.

The split between Woodward and Amway purportedly saw Team’s immediate sales plummet. Amway followed up by filing a lawsuit against Woodward.

It wasn’t until an agreement was reached with Monavie was reached later in 2007 that Team’s sales picked up again.

In 2008 Woodward purportedly made $6 million through Team and Monavie. That same year Forbes described Team as

one step ahead of all these juice selling schemes. It is a pyramid atop a pyramid.

Amway’s lawsuit was confidentially settled in 2010. The following year Team was renamed Life Leadership and continues to operate to this day.

Read on for a full review of the Life Leadership MLM business opportunity. [Continue reading…]