Lyoness was initially launched in 2003 in Austria by CEO Hubert Freidl. Despite now operating on a global scale and trading as “Lyoness International”, Austria remains the initial country that Lyoness launched out of and is naturally one of its most developed markets.

A decade later however and things don’t seem to be going all that well for Lyoness in their home country. Hundreds of investors have filed lawsuits against the company demanding refunds and Austrian authorities have launched a criminal investigation. [Continue reading…]

Harmless old small-town magician or devious mastermind behind the $600M Ponzi scheme that has devastated the MLM industry’s reputation?

Despite a the secret recording of a detailed discussion with initial investors laying out in detail the history of the Zeek Rewards’ Ponzi scheme, the debate surrounding the extent of Burks personal involvement and awareness he was running a Ponzi scheme has almost been as hotly debated as the opportunity being a Ponzi scheme itself.

Breaking his silence to the Associated Press for the first time since the SEC fined him and shut down Zeek Rewards, Burks had little to say to those that invested in Zeek.

Remorse and an apology?

Oh hell no. Fuck all y’all and the horses you rode in on! [Continue reading…]

One of the key factors in the perpetuation of the $600M Zeek Rewards Ponzi scheme was the company’s affiliates being able to deceptively advertise their accumulated Ponzi points as actual revenue.

Despite the rhetoric about retail customers, publishing spam on the internet counting as “work”, the mythical success of the Zeekler penny auction and what not, at the end of the day Zeek Rewards affiliates pumped money into the scheme and were paid new investor money – based directly on how much money they put in themselves.

How?

For each dollar an affiliate invested, they were given a “VIP point” (after dumping some auction bids on fake customer accounts and publishing spam ads for the company). Each VIP point paid out a share of newly invested money daily, for a total of 90 days before expiring.

The problem lay with affiliates re-investing their daily ROI back into new points and simultaneously claiming that the money was actually paid to them first, before they re-invested it into the scheme.

The reality is that this money never existed. All that happened was a virtual transaction and the creation of new Ponzi points.

Analysis of Zeek Reward’s financials following the SEC bust revealed affiliates had generated roughly 3 billion VIP points through initial and continued re-investment.

If affiliates set their cash out at 100% and Zeek Rewards paid enough to ensure that no affiliates lost money over 90 days on their investment, this equated to a daily payout of $45 million.

How much money did Zeek Rewards have in their accounts?

$225 million dollars.

Taking in on average $5 million dollars a day for the month of July 2012 (the month before the SEC stepped in), it’s easy to see just how fragile the daily ROI house of cards was. And with ever-growing VIP point balances affiliates were generating, how ultimately it was destined to collapse under its own weight.

Despite all the points Zeek’s affiliates were generating, the money just wasn’t there to back it.

That of course didn’t stop affiliates from marketing their imaginary returns as actual earnings, despite never actually seeing the money (because it didn’t exist).

It’s sort of catch-22 if you think about it. Affiliates didn’t need to see the money because they believed they were re-investing it. This worked for Zeek Rewards because they didn’t have the money and played into re-investment to generate ever-increasing returns being a key component in the scheme.

Now, almost a year after the closure of the scheme and amidst a battle between initial investors who withdrew actual money and claim there were “no victims” in the scheme, those who invested later and lost their money and those who believe they lost money because the scheme was shutdown, despite the fact Zeek Rewards didn’t have the money to pay them, Receiver Kenneth Bell announced yesterday that affiliates will not be able to claim imaginary earnings or claim VIP point balances as actual money.

Why? [Continue reading…]

Undoubtedly if one was to credit a single source for the current rash of Ponzi scheme “daily revenue share” companies infecting the MLM industry, it would have to be Zeek Rewards.

Under the guise of a penny auction, Zeek Rewards let its members invest in the company and paid out a daily ROI over 90 days. The business model hinged on affiliates receiving >100% than the money they invested over the 90 day maturity period.

Zeek Rewards ran from January 2011 till it was shut down by the SEC in August 2012 for being a $600M Ponzi scheme. Following the SEC’s investigation it was revealed that at best, Zeek Rewards only had enough invested funds in reserve to continue paying out affiliates for 5 days ($45 million USD a day).

Since Zeek Rewards was shut down, those of us observing the industry has seen an explosion of Ponzi schemes popping up. Most, if not all of these companies seek to recapture the inherent addictiveness of affiliates investing money and then watching virtual earnings grow via a daily paid ROI.

The problem is that fundamentally, every single one of these opportunities still boils down to affiliates investing their own money into the company which is then used to pay out existing affiliates who invested earlier.

One of the closest imitators of the Zeek Rewards “daily revenue share” Ponzi scheme I’ve seen thus far has been AddWallet. The company has gone to great lengths to replicate the design, look and feel of the Zeek Rewards backend and is heavily marketed towards ex-Zeek Rewards affiliates.

With a business model and compensation plan that simply exchanged penny auction bids with advertising credits, naturally questions have arisen from prospective investors curious as to why, once the scheme grows big enough, the SEC won’t just simply shut down AddWallet too.

Seeking to address those concerns, AddWallet held a conference call a few days ago. The gist of the explanation being not that AddWallet is any different to business model and compensation wise to Zeek Rewards, but rather that being based offshore, AddWallet are confident the they are safe from the SEC. [Continue reading…]

Level One Network went into prelaunch in late February 2013 and is headed up by CEO Dan Miller.

No contact details for Level One Network are provided on their website, however the company’s domain registration provides a Minnesota based address in the US.

On official Level One webinars, in which he claims to have been ‘involved in online marketing for over a decade‘, Miller also credits himself as being the CEO of “Click Marketing Inc”:

Click Marketing Inc. appears to Miller’s parent company from which he launches other companies from.

Prior to Level One Network Miller launched Lead Net Pro in October of 2010, with the opportunity still being active today.

Lead Net Pro is a $300 “harvesting and extraction” tool that scrapes the internet for “names, addresses, emails, phone numbers 365 days a year, 24 hour a day”.

Once this information is scraped, Lead Net Pro then allows affiliates to mass mail owners of the harvested information.

A “phone broadcasting service” is also included, allowing Lead Net Pro affiliates to harass call up owners of the harvested information and market to them.

Affiliates in Lead Net Pro are paid 100% ($300) commissions upon recruitment of new affiliates into the company.

Read on for a full review of the Level One Network MLM business opportunity. [Continue reading…]

CeraCoat Direct is the network marketing arm for CeraCoat’s product line. Launched in 2009, CeraCoat Direct appear to based in the UK and provide a London based address on their website.

Both CeraCoat and CeraCoat Direct were founded by Elio Keller (photo right), with CeraCoat based in Switzerland and founded in 1998.

I’m not entirely sure what the relationship between the two companies is, but on the CeraCoat Direct page another company, “Success One Ltd”, is listed as the ‘exclusive Direct Sales Distributor for Ceracoat products‘.

Success One Ltd appears to be the parent company of CeraCoat Direct, with Keller (photo right) serving as the President of Success One Ltd. Whether Keller personally owns Success One or not isn’t clear.

Prior to CeraCoat Direct and Success One Ltd., Keller doesn’t appear to have any experience within the MLM industry.

The CeraCoat website does however credit Keller as having ‘worked for companies like CocaCola, Bahslen, Villiger and Buhler‘.

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

There is no information on the Mobile Blog Pro website indicating who owns or runs the business.

The Mobile Blog Pro website domain (“mobileblogpro.com”) was registered on the 29th of January 2013, however the domain registration is set to private.

Further research into Mobile Blog Pro reveals affiliates of the company naming Rune Fjortoft as the owner of the company, with Fjortoft offering unofficial tech support on various MLM income opportunity forums.

Fjortoft (photo right) has a history of involvement as an affiliate with several dubious affiliate programs and MLM companies, including Traffic Buddha, Just Been Paid and FastCashLevels.

Fjortoft’s last MLM venture, Instant Cash Matrix, was launched in November 2011 and paid affiliates roughly $2.33 per new affiliate recruited each month.

Just over two months later, the scheme collapsed with Fjortoft sending out the following update to the company’s affiliates:

Hi, I am really sorry to tell you all, but the site is gone forever.

Something happened at the hosting company I was using
resulting in me loosing (sic) the website and all backups were compromised as well.

A bit of an ironi (sic) as one of my arguments when promoting the site was it’s quality hosting and my professionalism.

Well, life is funny sometimes. It never pays of to be high strung.

My humble appologies (sic) to all.

Rune F

Read on for a full review of the Mobile Blog Pro MLM business opportunity. [Continue reading…]

Yesterday we broke the news that back on March 15th eAdGear, parent company of GoFunRewards had filed a lawsuit against Randal Williams and JubiMax (owned by Williams and the parent company of JubiRev).

Buried within the paperwork eAdGear had filed for the suit was a “Notice of Pendency of Other Action” that revealed the existance of another lawsuit, but this time with Williams suing eAdGear and GoFunRewards.

The suit was filed on the 21st of February 2013 in the Western District Court of Texas (case number 5:2013 CV00125), listing eAdGear Holdings USA (a Califonia based company), eAdGear Inc. (a California corporation), GoFunPlaces Inc. (a California company), SeaFreed Travel (a Florida corporation), Francis Yuen (COO of eAdGear), Charles Wang (CEO of eAdGear), Mike Driggers (Vice-President of GoFunPlaces), Paul Nash (“software architect” of GoFunPlaces) and Kent McLaughlin as defendants and Randal Ray Williams as the sole plaintiff. [Continue reading…]

Back when I first reviewed iWowWe in September 2011, the company offered two primary products, video email and “video meeting” (conferencing).

This was initially offered as a package at $69.95 upfront and then $20 a month recurring.

This was the only way to buy iWowWe’s products and provided access to the compensation plan. As such there was no option to be a true retail customer of the company.

Coupled with a matrix-based compensation plan, this effectively led to affiliates being only able to recruit affiliates and being paid commissions out of their monthly membership fees.

In September 2011 I noted several changes to iWowWe’s compensation plan. iWowWe split their product package into a Basic ($75 upfront and $20 a month) and Premium ($195 upfront and $20 a month) offering, increased the compensation matrix from 3×7 to 3×9 (with additional legs possible) and introduced membership ranks.

Once again there was no separation of retail customers and affiliates, with both the Basic and Premium Packages offering access to the compensation plan. The membership ranks introduced used recruitment criteria and given the strong impact they had on an affiliates commissions, were at the core of the new plan.

For whatever reason, the matrix based compensation plan hasn’t worked out for iWowWe and as of March 2013 they’ve ditched it altogether.

Introducing the third re-incarnation of the iWowWe compensation plan since I’ve been tracking the business, today we look iWowWe’s new binary-based compensation plan. [Continue reading…]

I received an anonymous tipoff this morning informing me that GoFunRewards’ parent company eAdGear had filed a civil lawsuit against former President Randy Williams.

Sure enough when I checked the newly filed cases list of the North District Court in California, there it was:

As per the information above, the suit was filed in San Francisco on March 15th and has been assigned case number “13-1186”. [Continue reading…]