MLM Memories I’d Rather Not Have

I found this on SowPub yesterday. I hate to mention it, it shows my age.

18 November 2005
Las Vegas, Nevada The US Attorney’s office in Las Vegas announced on October 11 that Donald J. Mikrut, the operator of a Las Vegas-based multi-level-marketing company called Financial Independence Network Ltd and another entity called American Business–MORE Publications, was sentenced to three years in prison and payment of $2.2 million of restitution. Mikrut had pleaded guilty in May 2005 to a money laundering charge.

Mikrut and his wife, Sue Ann Mikrut, had been charged with mail fraud, wire fraud, money laundering and aiding and abetting a scheme to defraud participants in pyramid-type programs called “The Thirteenth Check Program” and “Pick Your Monthly Income Program.”

According to the US Attorney’s October 11 statement, about 50,000 individuals had paid over $30 million into these and other Mikrut schemes. About 4,000 victims filed claims for over $15 million in American Business Publications’ 1997 bankruptcy case. Mikrut had failed to pay millions of dollars of promised refunds to participants in his schemes

 

 

I must be old.

I remember MLM before the Internet.

One of the hottest - for a time - promotions was one of these I think.

It was a flag waving, patriotic call to get out of debt and save America.

And by the way, you were promised that you could participate in their financial MLM and earn as much as you wanted in your monthly check GUARANTEED.

I guess the above press release indicates it was true all except the part about earning what you wanted and guaranteed!

Here was the deal, if you wanted to earn $10,000 per month you

1) Signed up in the program which was a paper and ink program as I recall with an information product and paid your monthly money to that.

2) You paid this guy what you wanted to earn for one month up front to do all the work for you. If you wanted to earn $25,000 per month you paid him $25,000 to “do all the work” and in 12 months if you didn’t earn $25,000 (or whatever you paid) he’d refund the difference.

In theory this could have worked.

You just take all the people who wanted to make money and enroll them in your downline in the order of who paid you the most money first.

Given the national direct mail he did, it must have created a monstrous tracking problem so, evidently, he decided… why bother with refunds?

Details only worry honest people.

Lessons learned:

1. When the business promoter starts waving the American flag, patriotism, and saving the world before asking you for money, remember that’s the same trick used in a shell game or magician’s trick.

2. When someone says they’ll do all the work for you, they probably won’t.

No, I didn’t buy into this one. I saw lots of others do it though.