Wednesday, May 7, 2008

Ya Gotta "Believe!"

Many friends and supporters have suggested at one time or another that the WWSN write a book about our experiences with network marketing scams and MLM pyramid schemes. There are many entertaining stories we could tell, naturally, but it always seems that most people are only interested in current people, products, and programs. While there is much that consumers could learn by studying the companies that have come and gone in the past, even people who say they recognize the importance of proper due diligence, rarely do any. Why write a book nobody would bother to read?

And who would watch a movie about network marketing, especially one that parodies the industry and lampoons everyone from the fast-talking charismatic phonies who promote the scams to the hapless people who are taken in by their lies and deception?

You should! Billed as a "A Hilarious Movie About Network Marketing", "Believe" is the story of a typical MLM company, complete with an enthusiastic promoter, clueless downlines and marginal products.

"Set in the anywhere-USA town of Springfield, BELIEVE tells the story of Adam Pendon (Larry Bagby) a struggling steel mill truck driver trying to support his family. When the mill unexpectedly closes, Adam's world is thrown upside down by his new unemployment. While worrying about the loss of his job, Adam is approached by a slick, well dressed and confident salesman, Mark Fuller (Lincoln Hoppe), who, it would seem, has a business opportunity and quick fix to Adam's financial problems.

When Adam agrees to meet Mark at a local hotel for a "business" meeting, he is introduced to the unique world of Believe Industries, a multi-level marketing company, and the people who populate it. Dan (Steve Anderson) and Sally Bretenheimer (Ann Bosler) are the loveable losers who can't succeed despite their most desperate efforts. Tom (Brian Clark) and Amy Hawks (Britani Bateman) are the super-focused couple who seem destined for success or a trip to divorce court. And Howard Flash (Jeff Olson) is the self-proclaimed reformed sinner who was living in a trailer park until the business saved his life and made him the wealthiest man in Believe.

Despite his wife's concerns, Adam joins Believe and begins to succeed despite himself. He quickly finds himself rocketing to super-stardom within the ranks of Believe as his wife grows increasingly concerned with how the business is changing her husband. When Adam realizes Believe is misleading his fellow Believers at the company's over-the-top convention he finds himself at a crossroads; does he turn a blind eye and enjoy the wealth and fame he is amassing or does he walk away from it all?"

Don't miss "Believe!" It will make a believer out of you!

Saturday, May 3, 2008

The Worst Kind of Scammers

How does the WorldWide Scam Network choose which scams and con artists to focus its attention on? There are thousands to choose from, of course. And at one point, we made an effort to report on as many as possible - and were quickly overwhelmed. We soon realized that we needed a system by which we could categorize and analyze network marketing programs so that we could focus our efforts on the worst offenders.


There are many different types of Internet MLM scams:

1. Money games and Ponzi schemes

2. Fraudulent product scams

3. Recruitment commission schemes

4. Front-loading get-rich-quick scams

5. Personality scams featuring "MLM Legends"

6. Schemes that brag about high ethics, honesty, integrity, caring for others, giving to others, saving the planet, protecting the children, and helping the environment.

7. And numerous scams based on religion, New Age philosophies, ancient Chinese remedies, alternative medicines, nanotechnology, holograms, structured water, quantum physics, fruits and berries from faraway lands, and even heavenly intervention.

Most are a combination of two or more of these and the MLMs with the most identifying characteristics of a scam are the ones that the WWSN focuses its attention on.

The first scam the WWSN reported on back in 1997 was the OneSource WorldWide Network led by Jim Fobair and selling the "Laundry CD". Fobair's scheme included all but one of the components listed above.

It was first and foremost a money game based on front-loaded product. The "Laundry CDs" were sold by the CASE at around $1,800 each and your goal was to recruit as many new people as possible and convince them to buy as many cases as they could afford. If you could sell a few Laundry CDs to customers not in the program as well, that was fine, but you were instructed via Fobair's "Mega-Marketing" conference calls and e-mail and fax blasts that you should use your own supply of Laundry CDs to pass around to potential recruits "like candy" - they were little more than expensive marketing tools to build your business with. And build it they did, selling more than $65,000,000 worth of those worthless hockey pucks in their first year of business. This was what Jim Fobair called his "proven plan of action".

Fobair was already marketing himself as an "MLM Legend" after an early career that took him from selling mattresses at Slumberland to pushing vitamins at Herbalife and later Omnitrition. OneSource was one of the first big MLM players on the Internet and they pioneered the abuse of the web by publishing thousands of ugly affiliate web sites and generating tsunamis of spam in every direction. Much of what is wrong with the Internet today is a result of network marketing abuse that goes back to the launch of OneSource and the Laundry CD.

Fobair was also a master of manipulation and marketed the Laundry CD as a way to "save the planet" and "protect our children". He claimed that the Laundry CD "uses quantum physics, not chemistry" to clean, but that "much like the formula for Coca Cola, the secret behind the Laundry CD is proprietary and cannot be revealed".

It also couldn't be explained using any known physics or science, nor could it be tested by any legitimate independent agency. And for some reason, Fobair saw no need to seek a patent for his revolutionary new product...

In fact, Fobair admitted in a television report that:

"I don't really quite understand, it's kinda like a fax machine - ya know, you push play and a fax goes from Minneapolis to Dallas, but, I don't know how it works."

Audio Clip - Fobair and the Laundry CD

Pseudoscience surrounding the Laundry CD included gibberish about "structured water technology" and how the quantum physics inside the disk made water "slipperier", but when tested professionally, it was shown to be nothing more than a Nylene plastic container filled with tap water and Blue Dye #5.

Ten years later, it is hard to imagine that intelligent rational people ever fell for such obvious nonsense. How could anybody take this mattress salesman seriously, when even HE admitted he had no idea how the darn thing worked? But people did and Fobair managed to extract $65,000,000 out of the pockets of honest hard-working friends and relatives. Read some of the hate mail the WWSN received in its very first year on the net from OneSource true believers:

WWSN Fan Mail

The FTC eventually shut the company down. And you would think that the man responsible for stealing that much money out of the pockets of gullible consumers with an obvious pyramid scheme and a fraudulent product would be punished in some way...

But all Jim Fobair got was a warning and a slap on the wrist. This is the way the FTC and the FDA regulate the MLM industry. One former agent actually told the WWSN that the prevailing opinion at the FTC is that people who lose money in an MLM scam - deserve what they get.

Such was the inspiration for the WorldWide Scam Network. And Jim Fobair was an inspiration for many of the "MLM Legends" who would follow in his footsteps, such as Phil Piccolo, Mark Yarnell, Jim Brown, John VanDeurzen, and later Bruce Bise, Adam Gilmer, Alan Catalan, Richard Slaback, David Schmidt, and Andy Baechler. In Part I of our report, we will consider the career of Phil "The One Man Internet Crime Wave" Piccolo, from his early beginnings working alongside Jim Fobair in OneSource to his current status as the biggest MLM con man on the Internet.

Part I
Give Me That Old Time MLM Religion

Thursday, May 1, 2008

Lifewave Patent Rejected

It has been more than three years since Lifewave nanotechnology patch inventor David Schmidt first asked the WorldWide Scam Network to submit any questions we had about his company and his nontransdermal energy patch product line. Questions were submitted, but answers were never received.

Those original questions and our analysis are still posted at the top of the WWSN home page:

The Lifewave Patches & Dr. David Schmidt Due Diligence Worksheet

One of those questions was about the "Lifewave Patent Application", which asks:

Marketing the Lifewave patch with only the protection of a "Patent Pending" is risky, at best. Aside from attorney's fees, the cost to file for the patent application is only $75.

With new "patches" appearing on the MLM market all the time, Lifewave should have acquired a real patent before proceeding to market the product. Even though proof of efficacy is not required, the patent itself could yet be denied for many reasons.

If this was just a new version of a multivitamin, the risks would be minimal.

But the Lifewave patch science and product claims are far beyond anything else currently available on this planet and will be worth many billions of dollars. Rushing ahead to market the patches without a formal patent is unbelievably shortsighted and does not indicate good legal advice or common sense. Why was Lifewave willing to risk so much just to enter the network marketing arena? The Lifewave company will be bigger than Microsoft. Would Bill Gates have launched his company and his product without complete Patent protection?

Everything about David Schmidt and his goofy patches reeks of scam, from his lack of a curriculum vitae, to his lack of education, his silly theories about patches that "communicate with your body like a cell phone", his psuedoscience explanations of nanotechnology and resonant frequency transfer, and even his wacky Dr. Haltiwanger.

Like most fraudulent MLM products, much is made of their patent application. This is supposed to convey a sense of legitimacy and credibility upon the product and its creators. And thousands of gullible network marketing lemmings swallow the bait whole and proceed to commit their time, money, emotions and effort into selling worthless placebo products to their friends and loved ones.

The Lifewave company is a mess - their bills are not being paid, their best people have already left the program, their product line is a joke, and they still do not have any legitimate independent studies which prove their glycerin patches do anything but empty your wallet.

And yet they always seem to be able to find another dumb jock to write testimonials.

The company limps along, thanks to forced auto-ships and monthly sales requirements to affiliates, and they've aimed their marketing efforts towards the Far East, where they hope that they will find concumers more accepting of their ancient Chinese mumbo-jumbo explanations of meridian points, acupuncture, Chi, and tuning forks.

And this is not an attack on acupuncture or New Age science and philosophies; there is much to be learned there.

But when an MLM scam artist such as David Schmidt bastardizes true science and New Age philosophies to sell worthless patches in an MLM marketing scheme such as Lifewave, he hurts and offends everybody.

So the U.S. Patent Office has had three years to review David Schmidt's lengthy and obtuse patent application. Greater minds than ours with genuine scientific expertise, education, and experience have gone over Schmidt's theories with a fine-toothed comb.

And what was their decision?


You may read the final statement here:

Or you can look at it this way:

It took the Patent Office three years to tell us what the WorldWide Scam Network was saying three years ago-

David Schmidt is a fraud.

Lifewave patches are a fraud.

Anyone who buys and/or sells Lifewave patches is promoting a scam.

Nevertheless, thousands of MLM monkeys wasted three years of their life worshipping at the altar of "Dr." David Schmidt (he signed the original patent application as "Dr." David Schmidt - he attempted to defraud the Patent Office right from the start!). These people refused to consider or discuss proper due diligence and chose instead to "believe in" David Schmidt and all of the dim-witted athletes who will wear and endorse Scotch tape and a cotton ball dipped in honey, if there is a bribe attached.

People need to wake up and get with the program. Due diligence is not something you should leave to the patent office. If you don't like what the WWSN has to say, then do your own research; ask questions and get answers.

But don't let snake-oil salesmen and con artists such as David Schmidt steal your money, your life, and your reputation using nothing more than scientific-sounding technobabble and breathless testimonials.