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


theworldwidescam said...

The only real Scammer is Mr Bob Rip Off Everyone Burtis just check out and see for yourself how many people he has ripped off from $10 to $8,000,000.00 and everything inbetween

Secret said...

A new one to add to the list is Warren Nugent. He first stole ideas and caused partners to breakup at Fountain of Life in Dallas, TX. Then he used trade secrets from their product VaNu and money from the FOL company to form a new company, Terra Biotech. He caused over 2000 reps to lose their lively hoods in his last greedy move and MLM blunder.

He is currently being sued by Fountain of Life for millions and I am betting they will win and shut him down.

jerry john said...

then I simply started tacking the burlap onto the velcro, creating a tuft of fabric in between the spindles. I left enough fabric at the top to allow it to be discretely tucked beneath the mattress.

jerry john said...

I originally wanted wheels with locks, but these were all my Granddad had. I knew I could figure out a way to keep it still, and I did by sitting the wheels in little metal rings from an old curtain rod. Now on to beautifying the mattress. best mattress 2012

jerry john said...

I originally wanted wheels with locks, but these were all my Granddad had. I knew I could figure out a way to keep it still, and I did by sitting the wheels in little metal rings from an old curtain rod. Now on to beautifying the mattress. best mattress 2012

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Anonymous said...

Wow!! I new it. Laundry disc is a scam. Luckily I didn't buy it, but I did test it. Major thumbs down. Thanks for this helpful info.

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Charles Davidson said...

Re: Jim Fobair. He's still operating in the Philippines and New Zealand. Evil Scammer.