Barb Doyle sent me this information and I was able to find it in the LA Times.

This is from the LA Times online newspaper.

http://www.latimes.com/technology/la-fi-wrap28.3sep28,1,7398644.story?coll=la-headlines-technology&ctrack=1&cset=true

Internet Pyramid Scheme Alleged

The Securities and Exchange Commission is seeking to shut down a network of 25,000 websites, accusing operators of running a $15-million pyramid scheme that promises to shower participants with easy cash.

Prosperity Automated System, which bills itself as a marketing network, "is destined to collapse and leave the vast majority of investors with substantial losses," the SEC said Wednesday.

The complaint targets the network and its creator, William M. Osterhout of Citrus Heights, Calif.

The websites, with such names as lazyandrich.net and profits4doingnothing.com typically offer testimonies from people claiming to make thousands of dollars by buying into the group, the SEC said.

One site says the network "Showers You with Hands-Free Cash!"

Visitors to the sites fill out forms and are later called by representatives selling memberships for as much as $3,895, the SEC said. New members are issued their own websites and eventually can receive a share of the money when more people buy memberships via their sites, according to the allegations.

"Websites that come with the memberships do nothing but sell more memberships," said Stephen Donahue, an SEC enforcement official in Atlanta.

Though some websites offer links to products or services, "those were attempts to cloak what is a fraudulent pyramid scheme, giving it the appearance of multilevel marketing," Donahue said.

The defendants' attorney, D.J. Poyfair, could not be reached for comment.


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Thank you Barb Doyle for this heads up.

Kenneth R Sword Jr

Thank you Ken & Barb.

 

We were wondering when this would would come to the fore.

Hate to sound like an old Parrot, but the following should be kept to heart.

How to Choose a Network Company &
What Makes a Great Opportunity?




#1 - Low-Unit Cost
When picking a Network Company to represent, study carefully its product or Products. Is the unit cost competitive to similar products offered through other Networks and through normal Marketing methods.


#2 - Highly Consumable

To have a successful residual income, the product needs to be consumable. This simply means people order the product month after month, and you continue to receive commissions based on their purchases. Study carefully the Companies retention rate. If you have to replace 50-60% of your business every couple of months, you will have a hard time developing a High level Residual Income

#3 - Uniqueness of Product

Look for a Product or Product that is not in everyone's Sales Kit. You want the Product to possess certain exclusivity, a product that can not be purchased at the Corner market or Box Store. Is the product patented or are their manufacturing nuances that make it difficult for the total product to be easily Duplicated.

#4 - Exemplary Management Team

In order to feel confident of the staying Power of the Company and Product you chose, you need to study and understand the business Structure and the Management Team. Is management familiar with the uniqueness of Network Marketing or are they comprised of Trophy executives hired for their Name recognition or Notoriety in un-related fields. A Company with staying power needs a team who has experience in international, multi-million dollar businesses. People who have done this before, and are knowledgeable in multiple areas.

#5 - Profits for the Company & Distributors

Study the financial position of the Company. Be cautious if figures are not available.
What is the Company debt ratio? Have they changed marketing plans several times?
Is the Compensation Plan easy to understand? Is there a big discrepancy between actual Sales Dollar Volume and Credited Volume? Is 100% of commission percentage actually paid, or is there a lot of breakage? Look for Companies that pay 100% of stated commission and are on sound financial footing. Also be wary of Plans that require large up-front costs, and/or require carrying large Inventory

#6 - Timing, Timing, Timing

Is the Product and/or concept, in tune with Current Trends or better yet, are they a little ahead of the curve. Are you choosing a business that is on the cutting edge of a growing Market? Think of the rapidly expanding Global position and where can this Company fit in the Global Economy.

#7 - Presentation and Duplicability

Can the presentation be made quickly, easily and understandably? The secret in Duplication is that almost anyone, with strong desire to succeed, can be successful. Is the system cross generational? Is it Non-gender specific? Are the requirements for Start-up easily affordable to large cross section of the Global population?

If the Company or Companies can stand up to 6-7 of these criteria, you have a very good chance for high degree of Success. If only 4-5 apply, I guarantee you will work too hard to gain too little, and if only 3 or less fit, run for the hills and close your check book.

Success in Network Marketing needs the above criteria for the Product and Company;
But more importantly it needs the individual to be willing to change their lifestyle and thought process.

We will discuss that in a future Article.

Hi Kenton,

Thanks for the warning. I stay away from stuff like that.

Have a great weekend,
Angela

Tell me about it.

http://www.papierre.com

Yep this is coming for the paid to surf propgrams too... People that earned money will be made to pay it back AND could be thrown into the IRS Audit mess... We did play with the surfs for advertising, so we'll see what happens. We sure don't waste our time, money or reputation on them now... LIVE AND LEARN... Thanks for sharing Kenneth... Linda/CMAS, BS, RN AOL & Yahoo IM TxBizNurse BizNurse@satx.rr.com