Category Archives: MLM

About MLM, in general.

The Empty Promises of Lien Ket Viet


Top executives of the Hanoi based Lien Ket Viet were arrested last Saturday, March 12, 2016 for apparently swindling around 45,000 people in Vietnam involving pyramid scheme scams. Among those arrested were Lien Ket Viet’s Chairman of the Board, Le Xuan Giang and deputy general director Nguyen Thi Thuy.

Vietnam’s Lien Ket Viet
Lien Ket Viet was a Vietnamese marketing and trading company distributing dietary supplements and health care devices. Established in the year 2010, it has been granted a license to operate by Vietnam’s Ministry of Industry and Trade to operate as a multi-level marketing company in the year 2014. But various fraud were discovered when the company involved in its campaign Vietnam’s Ministry of National Defense to gain popularity and confidence from members and customers.
The products.
Among the company’s bestsellers were various types of dietary supplements that goes along with detox machines and other health aids for which some were later found out to be fake and does not necessarily offer any health benefits at all. The starter package for membership which costs around $384.85 were required by recruiters from its lured members.
The operation.
The company operates through a series of chain recruitment scheme requiring membership with an equivalent deposit to guaranty entry and access as the new members likewise do to their own recruits as they promised lucrative earning potentials selling and distributing the products. Recruiters promised members attractive bonuses and commissions as the company amassed around VND1.9 trillion or the equivalent of US $85.2 million from deposits of members that joined the company. Lien Ket Viet operates all over Vietnam with its 21 branches in 19 provinces.
Since last year 2015, thousands of members have claimed to be scammed by the company and demanded their deposits and earnings be returned to them at once.
Case updates.
Seven of the top executive officers of Lien Ket Viet were currently in custody to answer for the various fraud cases filed against them.

Multitel & the Baladjay Conspiracy

Rosario “Rose” Baladjay from photo capture by Rappler

In 1998, Rosario A. Baladjay or simply called ‘Rose’ to her colleagues and business associates registered her company, the Multinational Investors Corporation (Multitel) with the Philippine Securities & Exchange Commission as a lending investor company which under the SEC rules should only provide up to a maximum of 19 lenders only. This safeguard was done as a ruling by the SEC to discourage the company to operate under the illegal pyramiding scheme.

The Multitel multiplication.

As early as 1988, Baladjay initially enticed participants to the organization to each invest voluntarily from  Php2,000($45) up to Php10,000($222) from its investors at the prevailing interest rate return of 1.08 monthly or 12 percent per annum with purpose of lending the accumulated money to businessmen at 2.5 percent a month or 30% per annum. The investment becomes an instant boom and investments to Multitel was exploited and amassed. Baladjay was able to accumulate as much as Php100 billion or roughly around $2.5 billion from nearly 2 million participants during the term of its business.

ponzi pyramid

The Multitel‘s Double Your Money’ scam.

Multitel investments used the Ponzi scheme approach of “pyramiding” fraud wherein Multitel operated in which original investors being the top investors recruits other people as their downlines. Top investors recoups their invested money from the investment of their downlines. Most of the money gains and the only way a participant can recoup their investments was to sign up more people into the organization. But once recruitment stops, the investment recouping system will eventually collapse and by such time, those at the top of the pyramid have already recouped their investments leaving the rest below their lines to lose most of their money investments.  The mathematical odds on the certainty of the pyramid’s collapse on this type of pyramiding scheme was greater.  Losing investment money and recouping invested capital for the downline participants would most likely result in losing rather than gains. Therefore, the chance of losing invested capital in this kind of pyramiding scheme is almost inevitable.

The Multitel flock.

With the promise of the ‘Double Your Money’ gains and fast return of their investments, Baladjay was able to attract her flock of investors. With the launch of the ‘Double Your Money’ scheme, an equally attractive guaranteed package return on the investment at the interest rate of 4 to 5% monthly gains which was later raised to 60% per annum whereas regular prevailing baking interest rate was only 12% per annum have enticed participants to invest more. The investment becomes an instant boom and investments to Multitel was exploited and amassed. Baladjay was able to accumulate as much as Php100 billion or roughly around $2.5 billion from nearly 2 million participants during the term of its business. Many of those duped in the scheme were low-income bracket individuals as well as celebrities, overseas workers, members of religious associates, government employees and other influential people who aimed to get their investment to easily gain and multiply.

Another attractive scheme that Baladjay use to duped and entice investors was riding with the boom of telecommunication in the country at that time. Big companies like Nokia, Motorola and other telecoms company were exploited as subject of the Baladjay scam.  Exploring her luck in duping people to her company, Baladjay using the alibi of investing in Benefon, a competitor of Finland’s Nokia hooked her scamming business during the boom of the telecommunication industry in the country.

The Multitel crack.

But the Benefon project halted its operation when a case of syndicated estafa was filed against Baladjay and her incorporators in her Multitel company before the Makati court in the Philippines. The Philippine Securities and Exchange Commission (SEC) have issued multiple cease and desist orders to Baladjay and her companies but Baladjay continued to ignore these warnings.

In March of the year 2003, a court handed down a warrant for her arrest resulting from violation of the bouncing check law.  She was nabbed in her home province, Mangaldan, Pangasinan, a province north of the Philippines.  Since then, other suit and cases followed emerging from different parts of the country. So big that it reaches the Philippine senate to probe on it. The blown up cases resulted in death threats against her prompting the Senate officials to hold her in their custody during the process of the Senate probe. The case was uphold by the Senate and strengthened her cases with no bail recommended.

See also:

And in line with the Philippine government’s effort to haunt down scammers and pyramiding initiators that crippled the lives of the people and affect the country’s economy as a whole, the Baladjay case was intensified. With no bail for her multiple cases of estafa, Baladjay was now currently detained at a women’s correctional facility in Mandaluyong City, Philippines. Upon the promulgation of the guilty charges in the court in Makati City, Baladjay and her cohorts were sentenced to 7 to 21 years of imprisonment or a fine of Php5 million for each of their cases or both.


USANA in China: Nutritionals You Can UNTRUST


In China, MLM and pyramid schemes businesses are illegal and are prevented from proliferation. But in March 2013, USANA reports that 37% of its global revenue were transacted in China. Making China a major role player in USANA’s funding. If China government does not allow MLM, what’s the reason why USANA’s Chinese investors are getting the services of Harwood Feffer LLP, a NY based law firm specializing in consumer fraud and product liability to investigate USANA Health Sciences, Inc.

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Lead System Network – LSN – is it a scam? My opinion.

At June 1st, 2014 LSN – LEAD System Network is going to launch. Now in may 2014 the Internet (well, at least mlm-prone part of it) is buzzing about it. What is is? Is it a scam or pyramid scheme or legitimate MLM?

LSN – piramid scam or MLM

Let’s think first, what is it? Is it MLM with good and useful product, or is it pyramid scheme, where people down the line pay for those up the line?

To decide we need to analyze the product (good solid and needed product indicates MLM, shady virtual useless product indicates pyramid scam). We also need to look at compensation plan.

Lead System Network: the product

The product here is a set of “marketers’ tools”. Many people do not look deeply at the product, they just talk about finding new downline members, But let’s see what we have here:

  • Autoresponder – if it is good autoresponder then it has some value (if you know how to use it), otherwise – there are some free autoresponders out there. So it needs to be good to be worth anything.
  • Blog. Well.. anyone can start a blog for free. On many platforms. And you must have something to write about, or it is useless otherwise.
  • Voice Autoresponder. Very interesting, looking forward for details.
  • Lead management – is it for LSN leads, or external use?
  • Lead capture pages – same as above
  • Chat. A chatroom? Who you gonna talk wiht there? There are plenty of free chats.
  • google hangouts – really? It is free
  • Postcards (post leads followups). Who will pay for stamps? In which countries will it work? Anyway, interesting.
  • Webinar room. For how many people? Is it stable?

In $100 pro packet there is also mobile app creating tool. There are free tools, maybe this one will be better. And bulk mailer?. To do… bulk mail? To who?

100% commission

Very interesting. The company promises 100% commission. I wonder how? And if so, how do THEY earn money? Who pays for the tools costs (server, transfer)? Let’s not be naive. Santa Claus will not pay for running those tools.

I see a simple solution to this puzzle – you pay $50 a month, and your “sponsor” gets $30, and this is called 100 % commission . The company gets $20 (19,95 to be exact), sponsor gets $30 and he is convicted that he gets 100%. Everyone is happy 🙂

Note also that the 100% commission is for $30 products only. And just for customers you find directly, not those that spillover (or spillunder) in the matrix.

In the case of the pro package ($100) however, the commission is 50 %, and the other half goes to the “matrix”


Many people are excited by the fact that they can get $1000 without recommending others – just for the registration. But remember, that you need to spend $150 on products first ($100 for pro , $30 for basic and $20 for nothing)

You must also have 3 levels of paying members – 3 + 9 + 27 people = 39 people , paying a total of 39 * 150 = $5850 per month.  And remember that you will get $1,000 without sponsoring anyone just once, if you want more – then you will have to find person willing to pay $ 150 a month.

Note that this is not so, that you sign up you pay $150 and get $1,000. You also need to have 39 people under you in the matrix , each paying $150 a month.

And what if you do not have so many people that bought the pro version ? Then perhaps you will be paying $ 150 a month until you find them 🙂 For example, if you have 2 people under you, each paying $150 you will earn 2$. See first comment after this article for explanation (thanks, WealthTeam 🙂 ).

Here we return to the story of Santa Claus – do you think that someone will give you $1000 for nothing? Or maybe instead of giving that money to you the organizer of this MLM should enter himself in that position and collects $1000 himself – why don’t he/she do it? Continue reading