From BehindMLM: SEC Reiterate Need For Retail Sales In MLM

SEC reiterate need for retail sales in MLM

Oct.19, 2013 in MLM


As part of my writing here at BehindMLM I find myself sifting through mountains of MLM related information on a daily basis. One topic I find that pops up on a consistent basis is the debate over the importance (or lack thereof) of retail sales by an MLM company.

By using the term “retail sales” in MLM one is of course referring to sales of a product or service (not a third-party offering) by an MLM company to non-affiliates. Non-affiliates can be referred to as non-participants or any other name that denotes them as not participating in the compensation plan and earn commissions.

Some MLM companies attempt to muddy the clear definition of a retail customer by claiming that affiliates who do not recruit are retail customers. It is important to note that the failure to recruit new affiliates does not preclude an affiliate from generating commissions (typically by selling the company’s products), and as such they simply cannot be defined as retail customers (who simply cannot generate commissions no matter what they do or don’t do).

Here at BehindMLM it’s no secret the vital important I place on retail sales in my company reviews. The existence of retail sales and its viability is one of the key indicators I use in my analysis of an MLM company’s compensation plan and business model.

Adopting a common-sense approach to retail sales in MLM, I use a benchmark of around 50%, figuring that if a company can demonstrate that at least 50% of its revenue is from retail sales then they’re well-clear of being a pyramid scheme.

I mean, selling products to retail customers is what MLM is supposed to be about right? So is expecting a company to be at least 50% engaged in this unreasonable?

According to some MLM proponents, very much so.

One common assertion I see used time and time again is the insistence that US regulators do not care if products are being sold to retail customers or affiliates.

A product sale is a product sale and so long it is being purchased on the merit of the value of the product itself and not just to generate commissions‘, or some derivative is the common reasoning used.

The problem with that is of course that you then wind up companies operating in a loophole, ignoring retail altogether and focusing on generating recruitment commissions via product sales, with an inflation in product cost masking what would otherwise be a blatant recruitment incentive.

That however is conveniently ignored.

Continue reading “From BehindMLM: SEC Reiterate Need For Retail Sales In MLM”

SEC Investor Alert: Beware Of Pyramid Schemes Posing As MLM!


Investor Alert: Beware of Pyramid Schemes Posing as Multi-Level Marketing Programs

The SEC’s Office of Investor Education and Advocacy is issuing this Investor Alert to warn individual investors about pyramid schemes, a type of investment scam that fraudsters often pitch as a legitimate business opportunity in the form of multi-level marketing programs.

Have you ever been tempted by an advertisement or offer to make “easy money” or “online income” out of your own home? Multi-level marketing (“MLM”) programs are promoted through Internet advertising, company websites, social media, presentations, group meetings, conference calls, and brochures. In an MLM program, you typically get paid for products or services that you and the distributors in your “downline” (i.e., participants you recruit and their recruits) sell to others. However, some MLM programs are actually pyramid schemes — a type of fraud in which participants profit almost exclusively through recruiting other people to participate in the program.

Pyramid schemes masquerading as MLM programs often violate the federal securities laws, such as laws prohibiting fraud and requiring the registration of securities offerings and broker-dealers. In a pyramid scheme, money from new participants is used to pay recruiting commissions (that may take any form, including the form of securities) to earlier participants just like how, in classic Ponzi schemes, money from new investors is used to pay fake “profits” to earlier investors. Recently, the SEC has sued the alleged operators of large-scale pyramid schemes for violating the federal securities laws through the guise of MLM programs.

Continue reading “SEC Investor Alert: Beware Of Pyramid Schemes Posing As MLM!”

From BehindMLM: ZTeamBiz vow to “bring back” Zeek Ponzi excitement

ZTeamBiz vow to “bring back” Zeek Ponzi excitement

Oct.19, 2013 in Zeek Rewards 3 Comments


Despite the hundreds of millions of dollars lost by affiliate investors in the Zeek Rewards Ponzi scheme, fourteen months after the SEC shut it down there are still those running around professing its legitimacy.

One such group is Robert Craddock’s ZTeamBiz who, in addition to swearing Zeek Rewards wasn’t a Ponzi scheme, look set to spearhead attempts to reintroduce the MLM industry to the Ponzi points revenue sharing model.

[Read the rest of this entry…]

Judge Mullen Approves Sale of Zeek Rewards Real Property

I have added the below filings to the Files website.

U.S. District Court
Western District of North Carolina (Charlotte)
CIVIL DOCKET FOR CASE #: 3:12-cv-00519-GCM

Securities and Exchange Commission v. Rex Venture Group, LLC et al
Assigned to: Senior Judge Graham Mullen
Cause: 15:77 Securities Fraud
Date Filed: 08/17/2012
Jury Demand: None
Nature of Suit: 850 Securities/Commodities
Jurisdiction: U.S. Government Plaintiff


Date Filed # Docket Text
10/17/2013 160 ORDER granting 158 Motion to Approve Sale of Certain Real Property and Approving Procedures for Public Auction of Real Property. Signed by Senior Judge Graham Mullen on 10/17/2013. (Attachments: # 1 Exhibit A) (Pro se litigant served by US Mail.)(cbb) (Entered: 10/17/2013)

If Only This Would Happen Here: Ponzi Victims Apprehending Schemers



Disgruntled Victims Apprehend Fugitive Ponzi Schemer, Hand Over To Authorities

Jordan D. Maglich Monday, October 14, 2013 at 9:05PM

An Indian man suspected of masterminding a massive Ponzi scheme is no longer a fugitive after he was captured – by a group of disgruntled investors, no less – and turned over to authorities.  Badarul Islam, the former managing director of a company known as “Finix,” had been a fugitive from authorities for more than one year after the company shut its doors to investors.  However, his time on the run came to an end as Islam was apparently apprehended by a group of aggrieved investors that had been searching for him.  After his capture, Islam was subsequently turned over to police.

While details remain scarce, Islam is alleged to have acted as managing director for “Finix,” which solicited investors with the promise of outsized returns.  After collecting a “considerable” sum of money from investors, which is estimated to be in the hundreds of thousands, if not millions, of dollars, Islam’s branch closed down and all employees fled town.

Islam had been on the run for over a year before being spotted by investors.  Police have confirmed that an investigation remains ongoing.

From BehindMLM: ZTeamBiz not done fleecing Zeek Rewards affiliates


ZTeamBiz not done fleecing Zeek Rewards affiliates

Oct.13, 2013 in Zeek Rewards 4 Comments


Following the SEC shutdown of the $600M Zeek Rewards Ponzi scheme, a group of merry net winners bandied together and began fleecing their downlines for money.

These net winners formed the cream of the crop of Zeek Rewards net winners, led by Captain Robert Craddock, a Zeek Rewards affiliate himself and former second in command of the company’s “threatening of critics” department.

The money ZTeamBiz fleeced from affiliates who donated was originally gathered to be used to defend all Zeek Rewards affiliates who donated against impending SEC litigation. Shortly after the bulk of the money that would be donated was donated however, this changed to the offering of a cookie-cutter attorney letter, provided at an additional cost.

Where did the rest of the money go?

It is widely believed that the bulk of it went towards financing the legal defences of the Zeek Rewards net winners that formed ZTeamBiz. In the months following the SEC shutdown, a number of legal initiatives were launched by ZTeamBiz affiliates to try to thwart attempts to recover funds they stole from their fellow affiliates.

To date, every single one of these actions has failed.

It is believed the rest of the money was put towards the launch of OfferHubb, which was touted as a viable Zeek Rewards replacement for disenfranchised affiliates.

OfferHubb sought to resurrect Paul Burks’ Ponzi points business model, replacing Zeek Rewards’ penny auction front with that of a daily deals platform.

At least that was the initial plan. When the litigation filed by Zeek Rewards’ top net winners was filed, with the rest of the ZTeamBiz affiliates watching on with bated breath, OfferHubb took a back seat.

Once said litigation was revealed to fruitless, with net winners and affiliates of ZTeamBiz likely having to pay back the bulk of their Ponzi proceeds, OfferHubb resurfaced and eventually launched a few months ago.

With nobody interested in Zeek Rewards v2.0 except those who made the most money in v1.0, OfferHubb all but flopped.

Facing impending clawback litigation from the Zeek Rewards Receivership, the ongoing failure of Offer “Zeek Rewards 2.0″ Hubb and the widespread acceptance by non net-winners that Zeek Rewards was nothing more than a Ponzi scheme, it seems the folks at ZTeamBiz are launching one final effort to convince whoeever will listen to follow them into “new opportunities”.

In a notice titled “update on the events after Zeek Rewards” published on October 10th, Robert Craddock ZTeamBiz wrote

As you know, August 16, 2012 (the day Zeek Rewards was shut-down) seems like a long time ago, and many things have happened, alleged to have happened, and honestly — just never could have happened.

Sadly we have seen rumors and attempts to confuse all Zeek Affiliates and separate them from their hard-earned money. Please understand that the purpose of this email is to provide you with some valuable updates and help you navigate the mountain of information (and disinformation) that has circled the web over the last 14 months.

The circulation of disinformation? I’ll say. Could it be Robert Craddock and the Craddock 12 are finally going to come clean and atone for the mountains of bullshit they pushed onto Zeek Rewards affiliates?

Nah. [Read the rest of this entry…] Posts An “Update” Of Sorts

Zteambiz LogoI know many of you have probably wondered what happened to Robert Craddock, as I have.  The ZTeamBiz website has been “Moving servers” for a few months, as do almost ever Ponzi scam from time to time.  Apparently, they are back on the Inter-Web.

And, we also have an “Update”     ZteamBiz Update

Here’s a brief excerpt from this “Update”, relating to settling with the Receiver:

CAUTION! Although the promissory note option may sound tempting … you might want to think twice. Currently, NO motion(s) have been filed, and to enter into such a “promissory note” document with the intention of defaulting on the agreement may place you in a criminal proceeding — when as of now, this is a civil action.

Um, when i watch the “Judge/Court” TV shows, promissory notes are a civil matter, not criminal. Where did Craddock get his training in law ?  Probably at MLM University, where all these nimrods go to learn how to fleece their fellow-man.

I wonder how Craddock made out with the SEC?  He certainly does not talk about that……..

From BehindMLM: Claims made “FBI Agent Cleared YouGetPaidFast”

Editor’s Note: It amazes me how incredibly low MLM promoters will stoop to making such outlandish and improbable claims just  to make a dollar.


Paul Darby claims FBI agent cleared YouGetPaidFast

Oct.08, 2013 in companies Leave a Comment


As dubious schemes pop up in the MLM industry there’s usually an accompaniment of silly arguments explaining how said scheme is infact not dubious.

These arguments usually begin with the claim that anyone who thinks otherwise is “uneducated” or “just doesn’t get it”, followed by any number of fallacy-ridden arguments.

“We’re legal because we haven’t been shut down!”, “we have a product!”, “you’re just jealous!”, “my upline said…” are just some of the more commonly used arguments we frequently see here on BehindMLM.

(Editorial note: Even as I sit here and write this article, someone just now tried to pull the “we’re legal because we haven’t been shut down!” argument elsewhere on the site…)

Last month Paul Darby launched YouGetPaidFast, a gifting scheme in which participants send each other $7 money orders via the US postal service.

Upon signing up an affiliate is given 4 names and addresses to send the money orders to, after which the recipients mark the money as received. When this happens the newly recruited affiliates moves up the list and is eligible to receive $7 money orders from those they recruit and the new affiliates those recruited recruit and so on.

[Read the rest of this entry…]

Kenneth Bell Seeks Authorization to Auction Off Some Zeek Real Property

While checking the Zeek Docket files today, I ran across this:

U.S. District Court
Western District of North Carolina (Charlotte)
CIVIL DOCKET FOR CASE #: 3:12-cv-00519-GCM

09/30/2013 158 MOTION Motion to Approve Sale of Certain Real Property by Receiver for Rex Ventures Group, LLC.Responses due by 10/18/2013 (Attachments: # 1 Proposed Order Proposed Order, # 2 Exhibit A)(Bell, Kenneth) (Entered: 09/30/2013)
09/30/2013 159 MEMORANDUM in Support re 158 MOTION Motion to Approve Sale of Certain Real Property by Receiver for Rex Ventures Group, LLC. (Attachments: # 1 Exhibit A, # 2 Exhibit B part 1, # 3 Exhibit B part 2, # 4 Exhibit B part 3, # 5 Exhibit B part 4, # 6 Exhibit B part 5, # 7 Exhibit B part 6, # 8 Exhibit B part 7, # 9 Exhibit B part 8, # 10 Exhibit B part 9)(Bell, Kenneth) (Entered: 09/30/2013)

The Motion to Approve (158) begins with this:


Kenneth D. Bell, Esq., the Court-appointed Temporary Receiver (the “Receiver”) for and over the estate of Rex Venture Group, LLC d/b/a, any of its subsidiaries, whether incorporated or unincorporated, and any businesses or business names under which it does business (the “Receivership Defendant”), by and through his
undersigned counsel, respectfully submits this Motion seeking approval of the sale of two parcels of real property:

1. An office building and attached laundromat at 801 and 803 West Center Street, Lexington, Davidson County, NC; Tax PIN: 6725-02-59-4801; Deed Book 2041, Page 2402 (the “Main Office”).
2. A warehouse at 4095 Old Salisbury Road, Lexington, Davidson County, NC; Tax PIN: 6714-01-05-4777; Deed Book 2055, Page 1992 (the “Warehouse”).

The auction and notice procedures are set forth in the accompanying Memorandum in Support of Receiver’s Motion to Approve the Sale of Certain Real Property.

I have added these filings to the website.