International Law

Can You Sell an Unproven System as a Franchise?

Posted on August 20, 2008
Image via Wikipedia One of the major myths of franchising is about be tested in a Colorado Court room The myth is that when you are buying a franchise, you are buying a proven business system.For many franchise systems, this is false.There is no proven, there is only the inevitable slogan: "In business for yourself, but not by yourself...

Myth of Financial Literacy Education

Posted on August 20, 2008
Image via Wikipedia Lauren Willis writes about disclosure law that:"Seller disclosure and largely unfettered consumer choice is the dominant model ofr egulation in the U.S. for credit, insurance, and investment products. As these products have become more complex and the consequences of consumers' inability to understand them more dire, financial literacy education is a necessary corollary to the disclosure model...

Cash and Cars to Settle FTC Charges for "Money Making Secrets"

Posted on August 20, 2008
Image via Wikipedia Here is a fraud that is going to become more commonplace, which stresses the important of the FTC's new Biz Op Rule.From an FTC Press Release,"Two brothers have agreed to settle Federal Trade Commission charges that they misled consumers with false earnings claims for work-at-home schemes involving free government grants, mystery shopping, online surveys, and data entry...

Fraud News You can Use

Posted on August 20, 2008
Image via Wikipedia We are going to focus on recoveries for frauds, usually pennies on the dollar.Greg Newton, writing at Naked Shorts, has the best headline I have seen for a while: Most Pointless $300m Order Ever."The U.S. Commodity Futures Trading Commission (CFTC) today announced that Paul Eustace of Ontario, Canada, was ordered to pay more than $279 million in restitution and a $12 million civil penalty, based on an order that resolves a CFTC enforcement action against him for defrauding commodity pool participants in four pools that he managed...

To access this complete feed in the blog feed reader login or register for free.

University of Miami Used in Massive Ponzi Scheme

Posted on August 20, 2008
Image via Wikipedia Abbie Boudreau and Scott Zamost from CNN are reporting a new Ponzi scheme, with the Florida University implicated. "A Florida man used facilities at the University of Miami to run a multimillion-dollar Ponzi scheme and recruited school employees for the operation, angry investors and investigators tell CNN...

Ponzi Enabler Charged

Posted on August 19, 2008
Image via Wikipedia From the FBI Press Release: A Mexican national who allegedly ran a bogus investment program that promised primarily Spanish-speaking victims a 100 percent return on their investments has been arrested on a federal charge of bribing a bank official who allegedly took payments in exchange for covering up activities related to the fraud scheme...

What is Retail Sales for MLM Companies?

Posted on August 19, 2008
Image via Wikipedia Imagine reading the 10K of a retailer like Sears, Walmart, or K-Mart and trying to make sense of the following language, from the most recent 10Q from Herbalife:"A key non-financial measure we focus on is Volume Points on a Royalty Basis, or Volume Points, which is essentially our weighted unit measure of product sales volume...

Business-Opportunity Fraud Advice from Monster Career Advice

Posted on August 19, 2008
Image via Wikipedia According to an article at Monster Career Advice:"The Federal Trade Commission (FTC) says that fraudulent business opportunities consistently rank in the top 10 categories in its database of consumer fraud complaints"In fact, if the frauds were ranked by amount lost, biz op scams would rank 1 or 2...

Professional Association of Travel Hosts (PATH) Speaks out Against YTB

Posted on August 19, 2008
Image via Wikipedia Rachel writes at OP Tree about the YTB scandal:"The Professional Association of Travel Hosts (PATH) has just formally released a statement with regards to recent legal action taken against YTB. PATH applauded the recent legal action taken against the online travel company by the State of California...

Gifting Club Scam

Posted on August 18, 2008
Image via Wikipedia Jamie Hall, writing in the Edmonton Journal, talks about a gifting club scam currently making the rounds in Alberta."Women in central Alberta involved in so-called gifting clubs may be unwitting participants in a pyramid scheme, the RCMP warns...

Cooling the Out the Mark

Posted on August 18, 2008
Image via Wikipedia Erving Goffman wrote "On Cooling out the Mark" in 1952. It was an application of Mauer's elaboration of con criminals method of ensuring that their victim did not raise too much of a fuss with the federal authorities, "cooling out the mark" to other adaptations to failure...

Red Flags at Pre-Paid Legal

Posted on August 18, 2008
Image via Wikipedia Barry Minkow writing at Fraud Discovery Institute has released a report about Pre-Paid Legal claiming:"Pre-Paid Legal' reported "above the surface" numbers in bold text, boasting about increased membership revenues, net income, and earnings per share...

The Rabbi Who Lost $100 Million

Posted on August 15, 2008
We are finally getting some facts, but not necessarily material facts, about the WexTrust ponzi scheme.Ianthe Jeanne Duggan, writing at the WSJ, about the WexTrust Ponzi, has identified the Rabbi that gave authority or blessing to the scheme:"Rabbi Chaim Silver of the B'nai Israel Congregation in Norfolk, Va...

AAFD is Serving the Franchising Industry

Posted on August 15, 2008
Image via Wikipedia Lance Winslow, writing at Ezine Articles, has an odd view about franchise litigation."When a franchisor is sued it hurts the entire franchise system, because any money received from extortion like lawsuits is less money take away from the money that the franchisor needs to support the franchise system...

Gerry Spence on Faking It.

Posted on August 15, 2008
Image via Wikipedia Gerry Spence the noted American Trial Lawyer has started writing a blog.Although he is writing about  a lawyer gaining and keeping credibility in Jury trials, he makes a terrific observation about fraud."Our worst enemy is our own species...

Ponzi Criminal Captured

Posted on August 15, 2008
Image via Wikipedia From the FBI Press Release:"R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, Miami Division, announced that defendant Salman Shariff, a former Miami-based hedge fund operator, was sentenced today by Chief U...

Ad Surf Daily Part II

Posted on August 14, 2008
Image via Wikipedia Auto Surf programs are an odd duck in the scheme of fraud.  Unlike franchise fraud, biz op fraud, or mlm fraud, a large majority of the individuals involved know that the underlying scheme is a fraud, yet continue to participate.The AG of Florida claims that the Ad Surf Daily was a fraud because:"ASD depended upon new victims to turn over cash in order to make promised payments to those who had earlier given money...

More on Lies told by MLM

Posted on August 14, 2008
Image via Wikipedia Tracy Coenen continues her examination of Dr. Jon Taylor's lies that prospects to MLM are told.Some of these misrepresentations work because of the underlying psychology of influence.Here is the one that I consider both deceitful and very effective...

Remedies for Misleading Advertising

Posted on August 14, 2008
Image via Wikipedia Here are three different and interesting remedies for misleading advertising.First, as reported by Steven Gardner, litigation director of Center for Science in the Public Interest:"The FTC's crackdown on Airborne is welcome news and should serve as a template for similar actions against many other companies...

Commodity Pool Ponzi Scheme Alleged

Posted on August 14, 2008
Image via Wikipedia"United States Attorney Rebecca A. Gregory announced today the filing of an Information charging a 57-year-old Nacogdoches man with three counts of criminal conduct relating to his operation of a commodity trading pool in the Eastern District of Texas...

Talk to Current Franchisees First?

Posted on August 13, 2008
Image via Wikipedia Lance Winslow is a fascinating guy - he was repeatedly sued by the FTC over his non franchise car washing franchise.He tried to convert it to a mere license arrangement, which also failed.From time to time, he shows up making good points about the FTC and the Franchise Rule...

YTB: MLM Fraud to Franchise Fraud?

Posted on August 13, 2008
Image via Wikipedia Prior to becoming intimately involved with California's AG, YTB announced it was going to become a franchise. YTB International, Inc. (OTC Bulletin Board: YTBLA - News; "YTB" or the "Company"), a provider of Internet-based travel booking services for travel agencies and home-based independent representatives in the United States, Bermuda, the Bahamas, and Canada, today announced that the Company is contemplating the replacement of its referring travel agent ("RTA") business model with the implementation of a franchise operating system, potentially in 2009...

Fraud News For Tuesday

Posted on August 13, 2008
Image via Wikipedia Optree's blog has an nice analysis of the DSA's statement regarding YBT's membership and it being sued by the AG of California."The DSA has finally made a statement regarding the status of one of their companies that is currently in trouble, namely, YTB, the online travel company and DSA member currently being sued in 2 states for over $100 million dollars for fraud as well as the California DA...

Picture of AdSurfDaily Crash

Posted on August 13, 2008
/* This picture tells the story: try to keep under the radar kiddies.

Kay Services Ponzi Scheme

Posted on August 12, 2008
Image via Wikipedia Unlike the WexTrust Ponzi, the Kay Services scheme as reported seems more simple:"The Securities and Exchange Commission announced today that it filed a civil injunctive action against Kay Services, LLC, and its sole owner and officer, Marcia Sladich, alleging that they orchestrated a Ponzi scheme raising more than $10 million from at least 1,000 victims, many of whom were members of the Family Federation for World Peace, formerly known as the Unification Church...

Oregano Supplement Marketers Advertising Fraud

Posted on August 12, 2008
Image via Wikipedia In the coming years, we are going to see some serious battles over claims by health supplement marketers.The current state of advertising supplements and making medical health claims is summarized in this FTC press release."The marketers of a line of dietary supplements have agreed to pay $2...

WexTrust owners duped Orthodox Jews

Posted on August 12, 2008
Image by Getty Images via Daylife Sometimes I despair about the quality of investigative writing on frauds.Here is Robert Manor's view, writing in the Chicago Tribune, of the WexTrust ponzi:"Our complaint alleges an affinity fraud of very large scale," said Andrew Calamari, associate director of enforcement for the SEC...

SBA Conceals Massive Loan Fraud

Posted on August 12, 2008
Image via WikipediaKeith Girard, writes at All Business, about the Small Business Administration program and fraud."More than 60 OIG reports over the past five years have hammered the SBA about poor lender oversight and the potential for loan fraud. But in an outcome that's all too familiar in light of the SBA's Katrina disaster, the agency failed repeatedly to follow up on the recommendations...

Who is Shop to Earn?

Posted on August 11, 2008
Image by RaeA via FlickrShop to Earn is a new network marketing scheme that makes very little economic sense.A number of commentators, Tracy Coenen at Fraudfiles, Techdirct, and Every Day Finance have written about Shop to Earn.No doubt many individuals think that they can make $4100 in 30 days, based on the slide show at the Shop to Earn website...

Wextrust Capital LLC Ponzi

Posted on August 11, 2008
Image by Getty Images via Daylife"The United States Securities and Exchange Commission today filed charges against Wextrust Capital, LLC (Wextrust), its principals, and four affiliated Wextrust entities, alleging that defendants conducted a massive Ponzi-type scheme from 2005 or earlier that raised approximately $255 million from approximately 1,200 investors...

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.