Wednesday, October 06, 2010

You don't need a machine-gun to be a racketeer.

I'll admit that when this news alert arrived in my inbox this morning, I thought it might have something to do with the ballsy and groundbreaking work being done over at Salty Droid (whose site, by the way, appears down, at least as I attempted to link to it just now. Let's hope this is just a temporary glitch and not a sign of something more troubling). However, the lawsuit at hand seems unrelated to what the Droid calls "The Syndicate"in terms of the principals involved, anyway. The actual business model sounds disturbingly familiar.

You gotta love the breezy, Brothers Grimm opening of the introduction to the class-action lawsuit, Mattern et al v. PushTraffic et al, as follows:

Once upon a time when the only mail was at the post office, con artists placed ads in magazines advertising: "Make Money at Home Stuffing Envelopes" or "Typing at Home." The unfortunate victim would pay $10 to learn how to get started in the envelope stuffing or typing at home business - and in exchange for their cash would be provided [a] copy of the same ad that had caught them along with instructions to place ads to snare other unsuspecting souls....
The lawsuit goes on to note that the Internet has exponentially raised the stakes here—providing scammers with access to millions (if not billions) of potential marksthen devotes the balance of its 84 pages to explaining why this "criminal enterprise," led chiefly by defendants John Paul Raygoza and Big John Denton*, meets the tests of the Racketeer Influenced and Corrupt Organizations Act, or RICO.

T
he suit describes the plaintiffs as "a diverse group living on four different continents," and pointedly alleges that defendants Raygoza and Denton have taken scamming "to new heights by specifically targeting the elderly, unemployed, and disabled and, not content with making off with tens or hundreds of thousands of dollars at a time, have siphoned off tens of thousands of dollars from individual plaintiffs' credit card accounts...."

I haven't had time to explore whether this is one of the earliest shots of its type across SHAMland's bow, but if Droid is right, there may be more of these RICO actions to come...

* He's identified exactly that way in the lawsuit. For all I know it's his legal name.

37 comments:

Cosmic Connie said...

Hi, Steve: Droid's site seems to be working okay. It was down for quite a while the other day due to a technical glitch -- nothing sinister, thank goodness. If it was down for you earlier today you might just need to exit and restart your browser, or even reboot your computer, and the link should work just fine.

And "The Syndicate" is actually what those Internet Mobsters call themselves -- Droid didn't make that up. Several folks on Droid's blog have discussed the possibility of RICO suits in connection with the IM'ers' activities.

But this latest development you reported makes me wonder when a certain company in Utah that, among other things, handles a certain New-Wage guru's high-priced "coaching" program, will come under similar...um...fire.
http://tinyurl.com/2eat24f

Steve Salerno said...

This stuff is reaching critical mass, no question. Almost since I started doing media for "SHAM" in '05, people have been asking me about the viability of legislation that would tamp down on some of the more outrageous/absurd self-improvement claims and programs. I didn't really see a way, at the time. But a lot has happened in internet marketing since then--that's the segment that's really exploded--and RICO prosecution as well as more aggressive price-rigging and "mail fraud" oversight may be the back door in.

Once JAR's trial starts in Feb--if indeed it commences without further delay--the media tie-ins and spinoffs that throw added light on all this crap should leave little or no room for inaction.

some perspective said...

Mr. Salerno, I have now read your material and the material you mention on "Salty Droid's" site. I fail to understand what all the uproar is about. The American way is to make money. This is a capitalist system, is it not. Where does it say everyone has to benefit equally from a product or program? We don't apply that standard anywhere else in society. Not everyone who buys a new Toyota likes it. Not everyone is happy with their new toaster. Women see ads that make them buy dresses, then they don't like the way those dresses look on them when they get them home. In the big scheme of things these costs that so annoy you when they're related to self-help are negligible when compared to so many of the other costs in life that consumers willingly bear. The "willingly" is a key word as well. Nobody twists anyone's arm to do these things. For example I watched your ABC special on Hulu the other day and there's that guy, the young man who keeps spending all this money on law of attraction products even though he's broke. So we can laugh at him or we can pity him but in the end it's his decision. Isn't it? And evidently he feels he's getting something out of it or else he wouldn't keep coming back for more.

Also keep in mind that a car or a dress or a toaster probably isn't going to make a meaningful difference in anyone's life. These products and services, if they click for a person could make a huge and lasting difference.

Show some restraint here. These people aren't the devil or the antichrist. They have an investment and they want to keep costs low while maximizing profits. That's a business model that every single businessperson in a free society can relate to. And you're talking RICO?!

Steve Salerno said...

"Perspective": I don't have a lot of time now but I want to thank you for sharing that, well, perspective, which is provocative and interesting, and not the usual fare you get from defenders of self-help. I'm sure I'll be back to this later. I don't want to blow it off in a few words when it deserves more. Perhaps others will have something to say in the interim.

Cosmic Connie said...

Some perspective: Few critics are actually saying that purveyors of self-help products are evil or the Antichrist. But many in the SHAM and IM industries resort to sneaky, deceptive, and sometimes borderline-illegal tactics -- if not outright illegal ones -- in order to sell their often dubious products and services (or frauducts and flopportunities, as Salty Droid likes to say).

Did you actually watch the little video presentations on Salty's recent blog posts? Especially on the October 4 post, the IM "Syndicate" members actually talk about stuff like price-fixing and engaging in deceptive advertising. It may not be evil in the sense that the Holocaust was, and I honestly don't know if it's RICO-worthy, but it's definitely a red flag for consumers and potential investors in these guys' schemes.

When mentioning the young man at the end of the ABC special, you wrote, "The 'willingly' is a key word as well. Nobody twists anyone's arm to do these things."

That's not quite right, though. As it turns out, James Ray -- who was the focus of this ABC special, if it's the one I'm thinking of -- DID use a lot of immensely hard-sell tactics to get people to sign up for his priciest events. Some of the things he did amounted to arm-twisting. This has been discussed at length on various critical forums, and Connie Joy's new book, "Tragedy in Sedona," details some really unethical stunts Ray pulled in order to persuade people to sign up for his stuff.

Many of the IM gurus do the same kind of thing. I'm not saying that consumers have no responsibility in these matters, but let's face it: they are being manipulated. Just because car manufacturers and clothing designers do it doesn't make it right for pop-spirituality or self-help gurus to do it. In fact I would think we should hold those gurus to a higher standard of behavior since they are being paid to tell people how to live their lives. Besides, a $10,000 retreat is a lot more expensive than a dress or a toaster, and of more questionable practical value than a car.

I realize that value is in the eye of the beholder. But I think critical blogs like Steve's and Droid's can help people make a more informed decision before they invest time and money in something that might be either useless or harmful.

I could go on and on about this but it's late so I'll just wrap it up with mentioning a conversation I had with the guy who happens to be Kevin Trudeau's VP of Marketing (and was once the same for Joe Vitale). In a blog post summarizing these talks I covered some of these issues...
http://tinyurl.com/27mzj85

And hopefully Steve will be able to get back with some thoughts, and maybe Droid will pop in too.

mcmember said...

80 year old grannies are not going to make thousands of dollars from SEO and affiliate scams. The Raygoza criminal organization was using the the old fashioned telephone boilerroom to put the bite on the vulenerable and raping their credit cards their credit cards for $10,000 or more a pop. I don't see how anyone can defend this nonsense unless they are part of it.

Steve Salerno said...

Again, quickly: I once interviewed a high-ranking official at the FTC on another matter. We were talking about prosecuting fraud/false advertising claims. He said to me, "The problem often is, if the claim being made is vague and open-ended, then it's almost impossible to hold the advertiser accountable for failing to live up to it." So if a SHAM product says, "This program will change your life!", I don't think there's any chance of a successful prosecution for false advertising, no matter how disappointed buyers may be, and even if they end up feeling totally scammed. The claim is just too vague.

That means the only possible way of attacking these charlatans is on the other end of the bargain: the tactics they employ in an effort to rig/churn/divvy up the market. If you're looking for a good self-improvement program, and they all cost $4000--and if it can be shown that the reason they all cost $4000 is that the various gurus conspired to support that level of pricing--then that is unfair to the consumer, and should be addressed legally.

However, I'm not optimistic about that avenue, either. Regardless of what The Syndicate is doing, there are still so many freelance gurus and other non-affiliated IM pitchmen selling their own products for far less. I don't think prosecutors would be able to meet the bar of demonstrating that these jokers enjoy a sufficient stranglehold over the total market that their practices qualify as anti-competitive. I hope I'm wrong. There has to be some viable way of policing these scammers.

Now, if somebody could prove that they're all sharing the proceeds of these supposedly independent operations...that would be another matter.

some perspective said...

What I object to is using the hammer of government every time somebody doesn't like somebody else's business model. There is far too much of this going on already with government meddling in everything, telling you what you can and can't say as a private individual, can and can't do at the micro level, running our lives. I'm not some Tea Party nut, I'm just a private citizen and a businessman who thinks you should mostly leave the free market alone and let things work themselves out unless there is some atrocity going on that needs to be policed. These things you're writing about here are laughable compared to the sweatshops of the early union period or for that matter the way businesses are run in almost any other nation but here.

I don't agree with this effort to ban talking on cell phones while driving either. Or even texting. Leave people alone until they actually DO something as a result. Don't make it a misdemeanor to use a cell phone while driving, but make the law so that if you actually have an accident that injures someone seriously while you're on your cell, you get life in prison, no second chances. Something like that. Don't penalize everyone for something that only happens to a minute percentage of people. And don't make an entire industry suffer because a few people are unscrupulous.

And no I am not an internet marketer.

RevRon's Rants said...

some perspective, let's play with your Toyota analogy here, just to make it more... analogous. Suppose Toyota was selling cars, the advertising for which promised that the vehicles would "carry them along life's highways & byways," but neglected to mention that the cars they were selling consisted only of a frame and body. Only when a consumer orders and buys the car (in which they aren't offered a test drive, by the way) do they discover that it is far from being capable of propelling them anywhere. They call customer service and are told, "Oh, you'll want to buy an engine. It's what you really need to get yourself going." After buying the engine, which purrs nicely but fails to generate any form of lociomotion, they call the company again. This time, "All you need now is a transmission. Once you have that..."

And so it goes, with subsequent calls highlighting the need for such incidentals as wheels, fuel tank, ad infinitum. It turns out that the consumer would have been more successful in satisfying their desire to travel had they bought a bicycle or a mule.

It's easy to scoff at this analogy until you realize that it is a perfect example of the tactics used by many self-help scammers and IM "gurus." If you think that such practices are acceptable and undeserving of being observed and exposed, I'd really like to know the name of your business.

I frankly find your second comment, where you assert that activities like texting while driving shouldn't be outlawed, and that only those instances where actual harm is done should be prosecuted, is patently absurd and unworkable in a civilized society. You might as well make it legal to drink and drive, like it was when I was younger. Never mind the thousands of lives that have been saved by cracking down on the behavior as well as the harm.

What so many of the staunch Libertarians and Tea Party folks seem to overlook is that in a large and complex society, it becomes essential for the government to maintain a degree of regulatory presence in the affairs of companies and private citizens. Not so much from an ideological perspective, but from an efficiency and viability perspective. Those who call for the complete removal of government influence from their lives are being, at best, unrealistic and uninformed. Those who represent the driving force behind such nonintervention aren't being unrealistic, however. Their motives are far more cynical and disingenuous. Ford's internal reaction to the explosive Pintos of the '70s is a good - and hardly a unique - example.

some perspective said...

Yes, I take the same stance on drunk driving. If there's a terrible accident and liquor is involved the punishment should be extreme. I believe in capital punishment and that is a case where it's use is warranted. Up to that point, leave it up to the individual whether he wants to take the chance. I know many people who can have a little buzz going and still be fine behind the wheel. That's not the point though. Get the government out of life until it's absolutely necessary. If you really want to penalize somebody here, penalize the people who buy all this crap for being idiots. There are many elements of a free market society that exist and thrive because of idiocy on the part of the consumer. Why aren't we throwing the executives of Coach in jail for making $1000 purses? No one needs a $1000 purse and anyone who thinks she "gets something" out of walking aroudn with a $1000 purse is an idiot. So is the company that builds it's business model around taking advantage of that idiocy unscrupulous? If not, why not. It's the same exact principal.

Steve Salerno said...

Hmmm....

RevRon's Rants said...

Sorry, perspective, but Social Darwinism (which is essentially what you are proposing is both unworkable and contrary to the moral fabric upon which any civilized culture is based. I've previously offered Hong Kong as an example of a virtually unregulated society, where every individual is wholly responsible for their own well-being. Few restraints - and fewer protections - have created a society where there is a wide chasm between economic, social, and political classes. The suffering of the majority of individuals there is unimaginable to anyone who is accustomed to a society built upon a commitment to the rights and well-being of the populace. Inherent in that commitment is the willingness to inhibit the abuses of the many by the few. And lacking a universal allegiance to that commitment, regulations that reflect the common interests of the society are essential.

Finally, I've yet to hear of anyone who ruined - much less, ended - their life over a purse, yet quite a few have done so as a result of believing in some huckster's promises. Surely you can see the difference.

some perspective said...

Wait, you've yet to hear of anyone who "ended their life over a purse?" You've got to be kidding me- and probably yourself. What about the countless people who spend themselves into insolvency and hopelessness by reckless consumption. How many more stories do you need to hear about people who live beyond their means buying things just like $1000 purses, then end up putting a gun in their mouth or jumping off a bridge (or under long term treatment for depression?). Actually I think that should be our real crusade here, to stop people from spending their money recklessly on stupid, overpriced things. We need a new law that bans the sale of everything that isn't absolutely necessary or exactly as advertised thus protecting people from temptation and themselves. No more BMWs, no more giant screen plasma TVs, no more diamond rings. There should be a special government unit formed to investigate diamond ring outfits by themselves- have you seen the way their advertising exploits young love and shames men into spending thousands of dollars they don't have? And they do this knowing half of all marriages fail, so the promise of "everlasting love" is patently fraudulent. Besides which you might end up in the poorhouse and regret it later. Sounds like a good idea to me! Let's start a petition here on Shamblog.

Anonymous said...

"Perspective": It's a clever argument but you're missing or purposely distorting the point. Everybody knows what a diamond ring is. We decide whether or not we want it and if we buy it, we get what we thought we were buying. That is not at all the case with self-help and especially some of the worst IM products which use strong-arm sales tactics to get people to commit on programs that are nothing like what's suggested by the advertising.

RevRon's Rants said...

I follow your logic, perspective, but to be blunt, it is patently bipolar, sans anything resembling perspective. Are you unable to discern (or unwilling to acknowledge) the difference between persuasion and coercion? Between insinuation of benefits and outright guarantees?

How many BMW ads have you seen that flatly stated that the purchase of one would result in the buyer gaining prestige, respect, self-esteem, or an increase in the number of sexual partners? Yet you claim that the actual marketing efforts used by companies such as BMW are equivalent to the techniques of hucksters who flatly state that their "products" are infallible paths to affluence, spiritual awakening, and perfect relationships (however such relationships are defined by the potential consumer). Furthermore, if a BMW (for example) fails to perform as promised, the company provides a clear mechanism for recourse in their warranty. The hucksters, on the other hand, refuse to even consider the fallibility of their offerings, typically telling the unhappy customers that the failure was their fault, and that the customer obviously failed to properly apply whatever cosmic "law" was revealed in the product.

I wonder how you would react if you were to go out and buy a BMW that simply failed to run. Would you simply accept the notion that you were an idiot for buying the thing, then write off your expenditure as a "good lesson?" I suspect you'd be availing yourself of every form of recourse available under the law, and likely screaming for some kind of regulation to inhibit the intentional marketing of a product that was sold despite significant known defects.

And would you expect your own customers to take the same approach should one of your products not perform as promised? Once again, if that is the case, I think you should divulge the name of your business, so that at least a few potential customers could be appropriately forewarned.

RevRon's Rants said...

And for the record, I haven't heard of anyone who ended their life over a purse. Have you? One of your customers, perhaps? :-)

some perspective- over and out said...

This is what you people do when you're challenged, you make it personal. So now I'M bipolar, it was one of MY customers who killed herself over a purse, etc. Somebody else said earlier I couldn't possibly have the opinion I have unless I'm an internet scammer. I guess there's only one valid opinion on this.

You don't want perspective, you want only agreement. I read a lot of this blog before posting here. I read your post about tyranny of the negative. This must be tyranny of the positive. It's every bit as bad.

I said what I had to say and I stand by it.

Steve Salerno said...

Perspective: I think you got your tyrannies confused there, but your point is taken. Still, I hope you keep reading. There were valid points raised in response to your observations, and they weren't all personal accusations.

RevRon's Rants said...

Perspective, "you people" need to stop twisting what is written. I never said that you were bipolar. Having never met you, I have nothing upon which to base a psychiatric diagnosis. The *logic* which you describe in your comments, however, fits the description quite well, swinging wildly from one extreme to another, whilst ignoring the vast nuances that dwell between those extremes.

My objective is not to garner your agreement, but rather to point out the incongruity I find so evident in your assertions. If you will but approach the subject more dispassionately, perhaps you wouldn't be so prone to internalizing and personalizing the inevitable criticisms.

I too stand behind my statements. If there was anything that could be construed as personal, it would be my implication that your attitude toward your own customers - if it reflects your statements here - falls short of what most people would expect from a reputable proprietor. If your own business practices are *not* consistent with those you defend in your comments, it begs the question as to what you hope to achieve with those comments. "We people" would dearly like to know.

RevRon's Rants said...

Hurt feelings aside, I'm genuinely curious as to whether anyone has actually killed themselves as a result of having purchased an expensive purse. You imply that such incidents have indeed occurred, and I'd sure be interested in hearing the details.

I'll wait.

Cosmic Connie said...

I've argued pretty consistently -- and some have said irrationally -- against tighter government regulation of the self-help industry or most other industries for that matter. You won't see me smugly waving "Atlas Shrugged" over people's heads, but I do have a bit of the Libertarian in me.

However, I think the self-help industry, and many others, would benefit by more consistent enforcement of existing regulations. I'm still up in the air about RICO, though; that seems kind of extreme to apply to most of the goo-roos, with the theoretical exceptions that Steve mentioned in one of his comments.

But as I and many others have also argued before, self-help products, services and events are not, not, NOT just another mundane consumer product such as purses, lite beer, or toasters. Everyone from Peter Wink to nameless commenters has tried to make that argument to me and it doesn't hold water, IMO. After all, many self-help gurus claim to sell products and teach techniques that tinker with people's emotional and mental well-being (not to mention their physical health). Yes, I know that manufacturers of vitamins and supplements and legal drugs make the same claims, but they are subject to oversight by government agencies and if they make deceptive claims they generally get called on it.

And again, when you consider the coercive techniques James Ray and others use to suck people into their sales funnel, we are not talking about something as benign as plopping down a grand for a designer bag.

But I am enjoying the argument here.

Steve Salerno said...

Thanks, Con. Some wider context, as is usually the case from you.

I fear, however, that the argument has ended, assuming "perspective" was sincere in his "over and out." It's a shame, actually. How I wish a Vitale or a Byrne or a Katie or a Kern or--might as well dream big--a Robbins would show up to debate this with us. I don't think this issue is limited to internet marketing, after all; the overtones and implications go all the way to the top of SHAM's core philosophies and braintrust.

The problem we have here is really typical of today's black-or-white society: Sean Hannity's board consists almost entirely of right-wingers urging Sean to keep giving those Commie bastards hell, and Rachel Maddow's board consists almost entirely of liberals sharing her dismay at the evils of Flyover Country and wondering "What's the Matter with Kansas?" It's like I basically said to the Nation's Katrina vandenBabble the other day on Twitter: Is your whole point in life to dig up and/or exploit nasty shit about Republicans? To just throw something out there, retreat back into your Lib-o-Cave and do your mean-spirited giggling till you think of some more nasty shit to say?

Meaningful "engagement" is a thing of the past; we all just circle our wagons and fire our sniper-shots at the other side.

RevRon's Rants said...

"Meaningful "engagement" is a thing of the past; we all just circle our wagons and fire our sniper-shots at the other side."

Once it is established that folks are shooting blanks, there's no need to circle the wagons. And refusing to respond to challenges, attempting instead to paint themselves as victims of abuse, makes it pretty obvious that there aren't any real bullets in the gun. All that's left at that point is to jump in those wagons and haul ass.

Steve Salerno said...

Oh, I don't know, Rev. If this is a reference to our now-departed "Perspective," I don't think his case can be dismissed as "shooting blanks"--simply because we may differ. I actually think he made some interesting points and parallels, especially since his observations about $1000 purses are not very far from the argument I tried to mount in my posts on vanity taxes.

(As a refresher course or an intro to the topic for anyone who doesn't know/remember what I'm talking about, here's a more formally made argument, from the Los Angeles Times:
http://tinyurl.com/ycjqa8p)

RevRon's Rants said...

Don't you think it's a long stretch between imposing a vanity tax and blaming purse marketing activities for suicides?

I'd have no problem with a vanity tax, beyond the difficulty in establishing the appropriate point at which an item becomes taxable. You know that any attempt to draft such legislation would be aggressively gamed by both the producers and the customers of the "vanity" products, probably to the point where a can of Mountain Dew would be taxed, while a Lamborghini wouldn't. And the prospective Lamborghini drivers would scream that they were being oppressed, while the dwellers of Appalachian shacks would just pony up. On the other hand, I expect that the Mountain Dew folks would mount their own attack, as well.

Steve Salerno said...

Ron: I think you're using the term "vanity tax" in its traditional revenue-generation sense, not in the more specific, cultural sense I used it in my SHAMblog posts and my Times piece. If you reread the indicated essay, I think you'll see the parallels more clearly.

I think there is no question that today's spirit of acquisitiveness--whatever it is that drives people continually towards more, bigger, better, faster, gaudier, pricier--is certainly responsible for a great deal of emptiness and unhappiness and, ultimately, may cause some small percentage of afflicted folks to "opt out." Especially when they realize they can't afford the next level, or simply can't sustain the level they have now. I don't think that's a stretch at all.

RevRon's Rants said...

But which is at the core of the problem, the acquisitiveness or the hunger that feeds it? Do the purse manufacturers claim that their product will do anything besides hold cosmetics, keys, and the assorted can of mace? Do they promise enlightenment, success, and virtually anything else the customer might want? An exclusive big-ticket item might *imply* such things, whereas the hustledorks *promise* them. And that's where I part ways with our commenter (well, one of the areas, anyway).

Stever Robbins said...

Hey, Steve. I'm a Robbins, but at least as these things go, I'm not going to be defending the marketing practices of the SHAMfolk. Though I must say that after watching the video at http://www.justaskbigjohn.com, I had to look in the mirror and ask myself if I was, indeed, as manly as I'm supposed to be. (If you haven't watched the video, it has to be tongue-in-cheek. ... I hope!)

I'm about to hire a marketing firm to market personal productivity systems based on my new book, ala David Allen's Getting Things Done. I don't know if teaching people to label their file folders well or use graph paper to track multiple projects counts as "self-help," but if so, I'm indeed about to become a purveyor of self-help of the stationery variety.

Perhaps in a few months I'll be able to connect up to your blog from my new mansion or my Rolls and give you a perspective on the whole internet marketing biz. For just $49.97, of course.

(In case you didn't know, "7" is the new "9")

Steve Salerno said...

SR: I don't know why I continue to let people use my blog for shameless self-promotion. I guess I'm just a sucker for a pretty face.

I'll give you this, you were relatively smooth and clever about it.

mcmember said...
This comment has been removed by the author.
Steve Salerno said...

Re Seychelles: Did I miss something here?

Mr S said...

Some Perspective's argument reminded me of what people are taught to say, to overcome objections when potential customers are resistant to your pyramid scheme.
You try and claim that all business and marketing is just the same and that you aren't doing anything different from big firms.

Elizabeth said...

One thing is clear: greed, which is as American as apple pie, makes people even stupider than they usually are.

Sadly, Raygoza et al.'s machinations seem to be the American way of doing business these(?) days -- from the top financial honchos on Wall Street to schmucks like those two whose recorded conversation Salty Droid posted on his site.

BTW, it's a hilarious video, even though it makes one want to vomit. Masterminds, indeed. (And 630+ comments? Wow.)

Ann said...

What people like "perspective" are missing in the John Paul Raygoza story is the fact that his "boiler room" agents call "prospects" claiming to be someone the prospect has previously purchased material from and has reason to trust - a lie to gain trust.

Next step is to express concern and a desire to "help" the prospect - again a lie to gain trust.

Third step is to promise personal help in return for FUTURE PAYMENT.

Fourth step is to obtain prospect's CC # - don't need name on the card or anything else.

Fifth step - put the prospect on hold while supposedly confirming prospect has enough credit for business expenses.

Sixth (while prospect is on hold and hidden until prospect becomes suspicious or is made aware) step - put as many charges on the prospect's account, in small enough increments to fool banks' security measures, as the bank will allow. This usually results in a total large enough to put the account into overdraft.

Seventh step - get the "mark" to quickly (without giving time to read it thoroughly) sign and email or fax a document titled and represented as a "nondisclosure/confidentiality agreement" - this, of course, turns out to be a document supporting their dispute of chargeback.

Eighth step - Have someone who barely speaks English call and confirm the arrangement. Though the "prospect" can barely understand what the guy is saying, when he says clearly that you are responsible for maintenance of your own site, you think "of course" and just want to get on with it.

Ninth step is (next day) to offer the prospect a "cookie cutter" website (usually flogging a Raygoza opportunity) and information and tools at various sites where anyone can get it at no cost. They will, however charge for hosting at Raygoza's JumpLaunch.

If, as I did, the prospect realizes how well and truly scammed he/she has been and, (perhaps even acknowledging personal responsibility for being so gullible)reads the document which says 15% penalty if canceled within 3 days by registered mail - complies, then waits . . . and waits . . .

Oh, Ninth step - ignore "prospect" totally until a year or so later when media and law enforcement attention makes Raygoza start to try and appease the most vocal victims (if they'll sign a new agreement saying what a good guy he is,retracting anything bad they've said and promising to never say anything bad again).

That doesn't work well - an internationally known lawyer, Dr. Jonathan Levy takes an interest, and here we are.

The focus of Raygoza's scam is not so much shoddy or non-existent product and service as the fraudulent way he takes payment - misrepresenting who is calling, maxing out the prospect's credit card account without the prospect's approval or knowledge, then totally ignoring refund requests. FRAUD and scam from step one.

There are lots of comments here that make it plain the writers don't yet know the whole story. If you go to http://onlinelowblowsandsuckerpunches.wordpress.com/ you can see not only my story but many others' and what we've been advocating victims do to stop these horrendous schemes. Most of us just wanted to supplement income by establishing an honest internet business, and were willing to pay for an education.

Ann said...

What people like "perspective" are missing in the John Paul Raygoza story is the fact that his "boiler room" agents call "prospects" claiming to be someone the prospect has previously purchased material from and has reason to trust - a lie to gain trust.

Next step is to express concern and a desire to "help" the prospect - again a lie to gain trust.

Third step is to promise personal help in return for FUTURE PAYMENT.

Fourth step is to obtain prospect's CC # - don't need name on the card or anything else.

Fifth step - put the prospect on hold while supposedly confirming prospect has enough credit for business expenses.

Sixth (while prospect is on hold ) step - put as many charges on the prospect's account, in small enough increments to fool banks' security measures, as the bank will allow.

Seventh step - get the "mark" to quickly sign and email or fax a document titled and represented as a "nondisclosure/confidentiality agreement".

Eighth step - Have someone who barely speaks English call and confirm the arrangement.

Ninth step is (next day) to offer the prospect a "cookie cutter" website (usually flogging a Raygoza opportunity) and information and tools at various sites where anyone can get it at no cost. They will, however charge for hosting at Raygoza's JumpLaunch.

If, as I did, the prospect realizes how well and truly scammed he/she has been and, (perhaps even acknowledging personal responsibility for being so gullible)reads the document which says 15% penalty if canceled within 3 days by registered mail - complies, then waits . . . and waits . . .

Oh, Ninth step - ignore "prospect" totally until a year or so later when media and law enforcement attention makes Raygoza start to try and appease the most vocal victims (if they'll sign a new agreement saying what a good guy he is,retracting anything bad they've said and promising to never say anything bad again).

The focus of Raygoza's scam is not so much shoddy or non-existent product and service as the fraudulent way he takes payment - misrepresenting who is calling, maxing out the prospect's credit card account without the prospect's approval or knowledge, then totally ignoring refund requests. FRAUD and scam from step one.

There are lots of comments here that make it plain the writers don't yet know the whole story. If you go to http://wp.me/pPL5H-6N you can see not only my story but many others' and what we've been advocating victims do to stop these horrendous schemes. Most of us just wanted to supplement income by establishing an honest internet business, and were willing to pay for an education.

Ann said...

1. John Paul Raygoza's "boiler room" agents call "prospects" claiming to be someone the prospect has previously purchased material from and has reason to trust.

2. Express concern and a desire to "help" the prospect - again a lie to gain trust.

3. Promise personal help in return for FUTURE PAYMENT.

4. Obtain prospect's CC # - don't need name on the card or anything else.

5. Put the prospect on hold - supposedly confirming prospect has enough credit for business expenses.

6. While prospect is on hold, put multi charges on the prospect's account, in small enough increments to fool banks' security measures, as the bank will allow.

7.Get the "mark" to quickly sign and email or fax a document titled and represented as a "nondisclosure/confidentiality agreement".

8. Have someone who barely speaks English call and confirm the arrangement.

9. Call to offer the prospect a "cookie cutter" website.

If, as I did, the prospect realizes how well and truly scammed he/she has been and, (perhaps even acknowledging personal responsibility for being so gullible)reads the document which says 15% penalty if canceled within 3 days by registered mail - complies, then waits . . . and waits . . .

9. Ignore "prospect's" refund request.

The focus of Raygoza's scam is not so much shoddy or non-existent product and service as the fraudulent way he takes payment - misrepresenting who is calling, maxing out the prospect's credit card account without the prospect's approval or knowledge, then totally ignoring refund requests. FRAUD and scam from step one.

There are lots of comments here that make it plain the writers don't yet know the whole story. If you go to http://wp.me/pPL5H-6N you can see not only my story but many others' and what we've been advocating victims do to stop these horrendous schemes. Most of us just wanted to supplement income by establishing an honest internet business, and were willing to pay for an education.

Chris said...

As one of the victims of J.P. Raygoza (liar, conman, racketeer, swindler and cheat, lately of Mailibu Beach)I feel very qualified to specifically comment on the posting of 'Perspective', which reads perilously like a load of sophistry inventing excuses for fraudulent business.
Two points:
I never went looking for JP Raygoza's shitty outfit; rather, Raygoza's sales predators tracked me down and wore me down in a lengthy phone call , full of lies, deceit and totally false assurances. These tricksters included Harwood Hamilton (Pushtraffic front desk operator) and the smelly "Rule Mitchell", stooge, parasite and general scam-bum. Apparently, cold-calling marks (and peddling lies) was a very common tactic used by Raygoza's Gang.
Point two: Raygoza refuses refunds and refuses even to discuss them. That is the crux of my complaints.
In one of my final emails to the despicable little bum of Malibu Beach, I remarked that "your failure to discuss refunds reveals your fundamental lack of ethical foundations".
It is, of course, characteristic of scams that refunds are evaded at all efforts. No doubt, Raygoza would prefer to murder his 'wife' (and baby too) than to refund money to an unhappy customer. When it comes to angry customers of RatGutz, you can bet there are many, many more than meets the eye.
Point 3; teh credit card authoriities are easily bamboozled and are gullible accomplices to fraud, despite their feebale assurances claiming their ability to protect of consumer interests. For that matter, what is the Federal Trade Commission for, if it is only a filing cabinet for complaints.