Labriola: TelexFree bankruptcy “the most awesome thing”
In the wake of TelexFree’s emergency filing for Chapter 11 bankruptcy over the weekend, Steve Labriola was once again abandoned by TelexFree’s owners and left to face the company’s affiliates alone.
Appearing telephonically on a hastily announced call and sounding more spectator than corporate management, Labriola tried to appease TelexFree affiliates with what little information he had.
There are tons of questions out there I know, and I don’t have all of the documentation back from our lawyers on the things that I can and can’t say.
All I can tell you is that the Chapter 11 we filed was to help us reboot, rebuild and reformat our company, so we can move forward and build.
This is what we want as a team. This is what we want as a corporation and this is what all of you will see will be the best thing going forward.
TelexFree’s CEO in hiding Stuart Macmillan was absent from the call, with Labriola stating this was conveniently due to his being “on a plane, heading down to meet with the new platform company”.
Right. [Continue reading…]
TelexFree file for bankruptcy in the US
It wasn’t even a week ago that I wrote about the maths behind TelexFree’s 2013 profit and loss statement not adding up.
Using conservative figures, I estimated that by the close of 2014 TelexFree would be liable for around $1.14 billion dollars. With the company taking in $689 million in 2013 (what would probably be their biggest year investment wise), it was obvious that the company was going to collapse.
Even if we ignore every commission except AdCentral ROIs, and attribute TelexFree’s entire commission payouts ($622 million) to AdCentral ROIs, that still leaves a deficit liability of $518 million going into 2014. And remember, we’ve totally discounted any other commission payouts.
The latest round of problems for TelexFree investors began a few days ago when their payouts were delayed. Typically paid on the Friday, affiliates were still left wondering where their money was come Sunday.
Unofficially this was apparently due to issues with their payment processor, however the real reason finally surfaced a few hours ago.
TelexFree is bankrupt. [Continue reading…]
Ming Xu repentant about WCM777?
Roughly two weeks ago we saw the SEC finally move in and shut down Ming Xu’s WCM777 Ponzi scheme. As I understand it, these last few weeks Xu has made himself available to the SEC as they continue to tie up any loose ends pertaining to the case.
In a series of tweets that hint at a finality to Xu’s personal input into the SEC case, a much more sombre sounding Xu shed the briefest of light on his side of the story. [Continue reading…]
Zeek’s top Ponzi pimps “delaying” victim payouts
Someone I don’t ever see myself envying on a professional level is the Zeek Rewards Receiver.
Charged with wading through the haphazard mess of records and accounting that Paul Burks and his crew kept, Kenneth Bell is now working on recovering Ponzi funds from some of the MLM underbelly’s worst serial offenders.
And true to their nature, Zeek Rewards’ top Ponzi pimps refuse to go down without a fight.
Shameless and hell-bent on keeping the money they stole, they’re still doing everything they can to delay the returning of money to their victims.
FBI launch Herbalife criminal investigation
Due to the lack of information that usually surrounds regulatory investigations in the US, this one’s going to be brief.
Last we checked in with Herbalife’s regulatory woes, the company acknowledged that they were under an FTC civil investigation.
Now comes the news that the FBI and Department of Justice are also involved… [Continue reading…]
Worldwide Solutionz: ROI source is “proprietary”
When Zeek Rewards burst onto the scene and began promising affiliates a 125% ROI over 90 days, people were naturally suspicious of where the money was coming from.
Despite appearing to already have covered this base with the attached Zeekler penny auction, Paul Burks would infamously go on to insist that how Zeek Rewards generated 125% for every dollar invested with it was a “proprietary information”.
Of course this later revealed to be complete baloney by the SEC who, after shutting down the $600M+ Ponzi scheme, observed:
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.
Burks is solely responsible for determining the amount of “net profits” to share in the Retail Profit Pool.
Burks unilaterally and arbitrarily determines the daily dividend rate so that it averages approximately 1.5% per day, giving investors the false impression that the business is profitable.
Zeek Rewards’ “proprietary information”?
Mastermind Paul Burks sat in his office each day and told the system to use new affiliate money to pay out existing investors.
Now, almost two years later, another scheme that promises a >100% 90 day ROI is also claiming the source of their ROI funds is “proprietary”. [Continue reading…]
Origin Unite Review: Micronutrient donations?
Origin Unite launched around late 2011 early 2012 and on their website name a “Fred P. Stege” as the company’s CEO.
The Origin Unite website domain (“originunite.com”) lists a Mark Moller-Bengtsson as the domain owner, with a supplied address in Tripiotus, Cyprus. No corporate address is provided on the Origin Unite website, so presumably Cyprus is where the business is located out of.
Bengtsson’s name doesn’t appear anywhere on the Origin Unite website, however his LinkedIn profile lists employment with “Origin Pure Corporation Limited” from June 2011 to December 2013.
Origin Pure appears to be a sister company to Origin Unite, offering different products. I’m not entirely sure whether it’s a completely separate opportunity, as the compensation plan link on the Origin Pure website was not working at the time of publication.
That said, further research reveals both companies come under the parent company “Origin”, which is claimed to be based out of Switzerland:
The Origin online store, functioning at the internet address originunite.com (hereinafter referred to as the “online store”), is operated by and belongs to the company Origin (hereinafter referred to as “Origin”), with its registered office in Switzerland, Grabenstrasse.
Origin is the sole distributor of Origin’s products and marketing ideas bearing the “Origin” trademark. Origin is the sole authorised online store which offers marketing materials with “Origin’s” trademarks. The trademarks of “Origin’s” include: Origin’s, Origin.
Clear as mud. Why the need for two separate companies I can’t say, but it might possibly be due to the donation-based nature of Origin Pure’s business model.
On the executive side of things, Fred P. Stege appears to have been primarily involved in MLM lead generation and marketing. One of the earliest examples I was able to find was a paper Stege wrote in 2002 called “How to write so people buy like crazy”. The paper was published by “Madison Touche Publishing”, which I believe is a company Stege owns.
Another publication Stege published under the Madison Touche Publishing banner is “How to recruit your way to millions”.
In the publication Stege, who claims he is a “top 1% money earner and master trainer”, promises to reveal ‘doable down to Earth, no holds barred, raw, and real network marketing recruiting methods‘.
When you learn and apply the strategies revealed in these pages, recruiting will become easy, fun and enjoyable.
You will never again have to beg anyone to take a look at your MLM opportunity – instead, they will move heaven and Earth to meet with you.
As the title suggests, the paper focuses on the recruitment of new affiliates, and promises success if enough new people are recruited into a downline, irrespective of the MLM opportunity being pushed.
There is no mention of focusing on retail product sales anywhere in the book’s 133 pages.
Later opportunity launches of Stege’s include “MLM dynamite” (1998) and “Traffic Oasis” (2002). Both of these opportunities revolved around lead generation and are now defunct.
Read on for a full review of the Origin Unite MLM business opportunity. [Continue reading…]
TelexFree’s 2013 profit-loss doesn’t add up
A profit & loss statement recently filed in the US state of Alabama provides some insight into the financials of TelexFree.
Marked as an exhibit of an “application for interexchange authority”, the statement reveals that for the year 2013, TelexFree took in $689 million USD from their affiliates.
Affiliate commissions and other expenses ran up a liability of $652 million, leaving TelexFree with a “net income” of $36 million.
On paper that sounds great… until you consider TelexFree’s business model. [Continue reading…]
Paymony Review: Digital currency Ponzi scheme
There is no information on the Paymony website indicating who owns or runs the business.
Launched in late 2013, the Paymony website domain was registered on the 28th of November 2013 however the domain registration is set to private.
Paymony does have an “About Us’ section on their website, but only the following vague marketing copy is provided:
The Paymony is a company of Andpry Inc Group focused on developing products and technology services, partners in Silicon Valley (Silicon Valley – California – USA) having a differential ease of usage.
All marketing is done electronically, where we enjoy the Relationship Marketing as main channel, generating a distribution fair and equitable.
Formed by experts of wide experience in the areas of technology, marketing, knowledge management, information architecture, usability and web solutions.
Right.
As always, if a 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. [Continue reading…]
SiteTalk and OPN to target US market?
When we last checked in with SiteTalk, they’d ditched the Unaico name and reinvented themselves as “The Opportunity Network”. Both The Opportunity Network (OPN) and SiteTalk are still chugging along today, with news from the company last month indicating a new push into the US market.
If you’re wondering why SiteTalk had previously abstained from the US market, CEO Frank Ricketts explained the situation earlier this year at a SiteTalk event. Ricketts revealed that three years ago he ‘blocked the USA market for the OPN business opportunity:
We are a scam, we are illegal, we are running a pyramid system everywhere around the world. You can read that in Google.
So if we are a scam, we’re a pyramid, we’re illegal – what’s the problem with not being in North America? Why not do this in North America as well?
The reason is because one aspect of our business, that our legal adviser said that the authorities would probably say it’s 70% ok, but 30% maybe not.
And in the most important market in the planet, we decided that that risk was too high.
When I reviewed The Opportunity Network in late 2013, I identified a complete lack of retail activity within the business. It’s likely that 100% of the commissions being paid out of affiliate money is the root problem of the “30%” Rickett’s mentions above.
Another potential red-flag is the virtual stock exchange SiteTalk ran under their Unaico brand. Early investors were promised shares in a SiteTalk IPO, which eventually manifested itself as a listing on the Cyprus Stock Exchange’s “Emerging Companies Market”.
SiteTalk is listed under the stock code “STC” and company name “Global Digital Systems PLC”, with a current share price of €0.248 EUR per share.
In any case SiteTalk has persisted and appear to have gained a significant following in China of all places. At the time of publication Alexa estimate that 37% of SiteTalk traffic originates from China, and ranks SiteTalk as the 648th most visited site in the country.
Evidently though being popular in China hasn’t reaped the economic rewards SiteTalk’s owners might have previously thought it would.
A “statement of comprehensive income” filed on March 31st 2014 reveals SiteTalk generated €723,553 EUR in revenue. That sounds alright until you consider “sales” and “other expenses” during the same period set SiteTalk back €3,816,365 EUR.
The end-result is a 19th December 2012 to 30th September 2013 net loss of €3,092,812 EUR.
Obviously not looking for a repeat performance this year, this is likely to the be primary reason for SiteTalk’s recent push to enter the US market. Currently the percentage of US traffic visiting SiteTalk is so insignificantly low that Alexa do not track it. The smallest recorded percentage by country is Venezuela, who account for 0.5% of SiteTalk’s global traffic.
Nonetheless earlier this year, via a series of press-releases, SiteTalk announced to the world its plans for the US. [Continue reading…]