International Association to Expose, Study and Prevent Pyramid Schemes
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Pyramid Scheme Alert
Pyramid Scheme Alert is a non-partisan, non-profit, all-volunteer consumer education group.
Contact Robert L. FitzPatrick, Pres. at
info@pyramidschemealert.org
Website Update - August 2009
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Donald Trump: Pied Piper of MLM
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Multi-level Marketing (MLM) has been a significant force in America since 1980. And in most of that time, it never had an iconic human face - a Jack Welch, Bill Gates, Ray Krock, or a Lee Iacocca. Usually, when a MLM executive was seen on TV it was due to a lawsuit or a government prosecution.
But, now MLM does have its own live personality. A human face has been put on the "unique" business model. It is the face of Donald Trump. Trump has launched his own MLM scheme, Trump Network, which claims to sell health products. Before announcing his new company, Trump had been pitching for the MLM, ACN, but many MLMers took his endorsement of that scheme as an endorsement of the industry.

Now, the MLM world is electrified by Trump's launching of his own MLM company. The MLM blogosphere pulses with pride. They point to Trump as proof of their system's legitimacy. If Donald Trump says its legit, surely it must be! Right?

Well, no. However, Trump's track record in business is a template for MLM schemers and wannbe schemers.

See more on Trump's "net worth" tricks, his maneuvers to avoid paying debts and frequent bankruptcies.

New MLM Scheme, IJango, Called "Pyramid Scheme" by Dallas BBB (but there is  more to the story)
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The Better Business Bureau of Dallas Texas is warning consumers that the new multi-level marketing scheme, IJango, is an illegal pyramid scheme.
Why is the BBB targeting this one MLM start-up? Is it engaged in practices all that different from hundreds of other MLMs?

No, not really, and therein lies a bigger story. BBB's are reluctant to investigate MLMs. The Dallas BBB was sued in 2006 for questioning another MLM. And then there is the question of the characters behind this new MLM. The ghosts of the MLM disaster, Excel Communications, are rising again. See the full story.
MLM Scheme, Stream Energy of Texas, Sued for Pyramid Scheme Operation
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The MLM scheme, Stream Energy and its marketing arm, Ignite, based in Texas, have been sued for operating a pyramid scheme. The suit was filed in United States District Court  for the Southern District of  Texas, Houston Division.  The plaintiff is  Juan Ramon Torres represented by the  The Clearman Law Firm in Houston. The suit is seeking class action status.

According to the suit, Stream Energy defrauded investors when promoting the Pyramid and omitting material facts for the purpose of defrauding  investors.   Examples of  omissions cited in the complaint include:    
-- Failure to reveal that Ignite's multilevel marketing program is an illegal pyramid scheme.   
-- Failure to reveal that under the Pyramid, the majority of investors will lose their investment.
-- Failure to reveal that between July 2005 and June 2008 and July 2007 and June 2008 the Executive Directors' income increased by 262% while, during the same period, the Qualified Directors' income decreased by 264%.
-- Failure to reveal that the Texas market for the Services Program is quickly becoming saturated and that any other expansion of the market will quickly become saturated as well.     
-- Failure to reveal that the Texas market for Stream retail customers
is quickly becoming saturated, i.e., between December of 2005 and
June of 2008, the ratio of retail customers to directors fell from 5.5
to 1 to 2 to 1.   

The full text of the complaint is available.
Finland Hit by Madoff-style Ponzi
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Ponzi schemes are one of the most destructive forces plaguing market economies all over the world. Sadly, the United States appears to be the inventor of this type of fraud - they are named for Charles Ponzi who ran the namesake fraud in Boston in 1920. They have morphed into many new forms, multi-level marketing (also invented in the USA) as the latest and largest new format. But, the original mode, created by Ponzi himself, remains active. Finland has recently discovered that thousands of its citizens were duped in one of them, a near clone of Charles Ponzi's original scam and a close relative of Bernard Madoff's. It was called WinClub or WinCapita.
Report on FTC Neglect and Corruption Now Available
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The report, "The Main Street Bubble: A Whistle Blower's Guide to Business Opportunity Fraud; How the FTC has Ignored and Now Protects It" is now available to the public at no charge. If you want a copy of the report in PDF format, email PSA. Include the words "FTC Report" in the subject line.

In the wake of the Bernard Madoff Ponzi scheme collapse and other Wall Street frauds, there have been shocking revelations about neglect, collusion and incompetence at the Securities & Exchange Commision (SEC). A similar pattern developed at United States Federal Trade Commission (FTC), the federal agency charged with investigating and prosecuting "business opportunity frauds" and pyramid schemes.

In 2001, virtually all consumer protection in this area stopped at the FTC.  What happened to cause this radical change? How did the FTC move from protecting consumers to protecting pyramids?

The whole story has been researched and presented in a new report authored by Pyramid Scheme Alert president, Robert FitzPatrick, with help from many other consumer activists. The 21-page report details political influence-buying, conflicts of interest, and failure to protect the public. The story is eerily similar to the recent revelations of the SEC, which led to Wall Street frauds and the Bernard Madoff scam.
No More Silence: Take Action
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Over the last eight years, Pyramid and Ponzi schemes have grown and spread. The Internet is now choked with "cash gifting" scams and "matrix selling" frauds. Pyramid selling scams have multiplied and now boast that the Recession will bring them more desperate "recruits." The false promise of income from an "endless chain" recruitment scheme is the lure of these multi-level marketing scams. Many of the "job" and "business opportunity" solicitations on the internet are nothing more than pyramid schemes, flim-flam frauds.

Consumers now have a way to fight back. A petition for stronger regulation is being gathered on the Pyramid Scheme Alert Website.
To Read and Sign the Petition, Click Here
Special Reports for Consumers...
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 False Profits Blog for Analysis, Commentary, Discussion
Contact Information
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Pyramid Scheme Alert
Tel: 704-334-2047
Fax: 704-334-0220,
Email: info@pyramidschemealert.org
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