By Dan Mitchell, MLM Blog Correspondent
Another MLM Scam bites the dust…
From Network Marketing Business Journal:
James A. Sweeney, II, of Afton, Tenn., and Patrick M. Ryan, of Canyon Lake, Calif., were arrested on June 3, in Afton and Las Vegas, respectively, for stealing millions of dollars through “phony stock sales” and an illegal pyramid scheme. They are being held until they are extradited to Riverside County, Calif. Both face 78 counts of grand theft and securities fraud. Bail has been set at $8.8 million each.
“These two con men stole $8.8 million dollars through phony stock sales and an illegal pyramid scheme,” California Attorney General Edmund G. Brown Jr. said. “They stole investors’ money and used it to pay for luxury homes, fancy cars and a $100,000 Las Vegas wedding.” Brown’s complaint contends that Sweeney and Ryan, co-founders of Riverside-based Big Co-op, Inc., stole $8.8 million from more than 1,000 Californians through an illegal pyramid scheme and phony stock sales. Big Co-op, also operating as Ez2Win.biz, purported to be an online shopping hub where consumers could go to purchase thousands of goods and services from big name retailers including, Sears, Target and Macy’s, at discounted prices.
Consumers were informed that if they purchased a Big Co-op membership, they could save money on their own purchases and also earn commissions and rewards by convincing others to shop on the site. In reality, consumers never received rebates or rewards. Instead, profits were based on recruiting others to purchase memberships, and having those purchasers recruit others to purchase memberships (and so on). Members earned $100 commissions for every six members recruited. Those recruited then paid Big Co-op from $19.95 to $99.95 in ongoing monthly membership fees. According to the complaint, from 2005 to 2007, Big Co-op generated $1.3 million in revenues through this pyramid scheme.
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