Pyramids, Ponzies and the Gifting programs… Why care?
Pyramids, Ponzies and the Gifting programs… Why care?
Many are the programs that come along and promise you a percentage paid daily, for a set period of time on the purchase of a “ad pack” or “position” that you purchase.
By legal definition this would be an investment program and come under the auspices of the FTC who regulates all investment companies, businesses and programs. You will NOT find a single one of these operations like JSS which is FTC controlled or regulated.
The simple truth is that they are a Ponzi. A Ponzi involves funds passing through a central point, company or set of hands and paying people with money from later joining members.
Here is how it works…
Person “A” joins and buys a position for a set amount, in this case $10 and is promised 2 percent per day return for 75 days. Now first off JSS has that persons money to use for 50 days at no expense to themselves. In order to pay the $0.20 to person “A” on the 51st day JSS will have to come up with the money from somewhere.
That somewhere is the money paid by person “B” when they buy a position. JSS now has the funds to pay the full amount to person “A” on the 75th day BUT they will only have enough to pay person “B” for the first 25 days of their position.
Enter person “C” and the cycle continues. When done by a master scammer this type of program can sometimes run for a few years building membership levels sky high and always paying the oldest positions with money coming in from the newer ones.
Why is this bad? because at some point the scales will tip and there will not be enough money coming in to pay all that is owed. This is also the point when there will always be a crisis of some sort so that payout needs to be temporarily delayed while funds continue to pour in.
When there is enough to satisfy the operator the whole program will simply vanish along with the money and everyone will lose all the money they had in the program.
It is because of the greed inherent in all humans that this is so damaging.
Yes things can be drawn out a bit by actually selling a product and distributing some of that money but make no mistake about it this is NOT revenue sharing! No legitimate company can or will promise a guaranteed return on investment (which this is not)…
The reason is that profits can not be guaranteed in the future so shares can not be guaranteed either. JSS even tells you on their web site that they are a PONZI and not a legitimate business…
QUOTE:-”JSS-Tripler is Indefinitely Sustainable!”-:END QUOTE
People through greed, need or even desperation put rent money, food money, college funds and other monies into these programs and lose it all in the blink of an eye. If you had put just $10 in and lost it… no big deal right? Let me show you some math…
$10x 23,000 people is $230,000 … almost QUARTER OF A MILLION DOLLARS! which are being handed to the owners for free. The shame is that many will put much more into this program and lose it all.
There will be a few who were in early enough and pulled their money out before it goes away that will see a profit but they are most certainly outnumbered by those who will lose.
On to the Pyramid scheme…
On top you have the President, below him The Senate then the Congress…
Is there something wrong here? This is a pyramid with you and me at the bottom right?
Ok lets try this….
First there is the CEO then there are the VP’s followed by the board of directo…
What do you mean that can’t be a pyramid? It is honestly, as is almost every other organized structure in the world up to and including religion!
The church? Yup.
Network marketing and MLM? Yup.
Big companies like Ford or Horizon? Yup.
The mob? Yup.
Aunt Lou’s hair salon? If she has employees, you bet.
Even the family structure is all based on the same concept!
So where does the “scheme” part come in?
Well as far as I can determine, the schemes originated in Denver, Colorado, in
1934 or 1935 as the “Send-A-Dime Letter”. Long before the Internet was created.
“A pyramid scheme involves active recruitment and does not require a central administration, being defined in terms similar to that of a private lottery.”
The most recognizable form of them are the gifting programs that are prevalent all over these days. Unlike their Ponzi counterparts they do not involve a limited number of individuals getting rich off the contribution of many.
Instead they rely on the generosity of human nature to redistribute wealth without the government getting a slice of the pie and it is primarily for this reason that they are illegal.
Send “X” amount of money to the name on the top of the list, add yours to the bottom of the list after removing the top name and send out copies to as many people as you can is the basic concept.
Many of these are called chain letters or gifting programs and they rely on the fact that most countries have a legal structure in place to allow gifts to be made and received legally. here in the USA it reads as follows….
QUOTE:-
United States IRS Tax Code, Title 26, Sections 2501-2504 and 2511, which states that:
An individual may give as a “cash gift” up to $12,000 USD total, to as many individuals as that individual desires within a calendar year. While these gifts are non-taxable, and need not be reported to the IRS, there are conditions. In order to be deemed non-taxable, the cash gift must be given without the expectation of receiving anything in return.”
-:END QUOTE
P.S. The limit is now $13,000
Personal observation here… it says “to be deemed non-taxable the cash gift must be given without the expectation of receiving anything in return.” Personally I would then assume that if I made a gift “WITH an expectation of return” it would be taxable, but I am not a tax accountant nor a lawyer and therefore not at liberty to interpret the statement in any legal manner.
Everything said and done… it works, plain and simple. But because it is deemed illegal there is always the risk of it going away at any moment and nothing is gained in return. Honestly would YOU send $5 to a stranger without the expectation of gain or profit from it at some point?
If so, send me $5 now! :Þ
NOTE:- If you like my writing I post daily to my blog www.theprimusreport.com
All links to follow me on other networks are there as well,
Also complimentary copies of most of the books I write.
And links to Proven Paying Programs, Tools and Advertising sources
Many are the programs that come along and promise you a percentage paid daily, for a set period of time on the purchase of a “ad pack” or “position” that you purchase.
By legal definition this would be an investment program and come under the auspices of the FTC who regulates all investment companies, businesses and programs. You will NOT find a single one of these operations like JSS which is FTC controlled or regulated.
The simple truth is that they are a Ponzi. A Ponzi involves funds passing through a central point, company or set of hands and paying people with money from later joining members.
Here is how it works…
Person “A” joins and buys a position for a set amount, in this case $10 and is promised 2 percent per day return for 75 days. Now first off JSS has that persons money to use for 50 days at no expense to themselves. In order to pay the $0.20 to person “A” on the 51st day JSS will have to come up with the money from somewhere.
That somewhere is the money paid by person “B” when they buy a position. JSS now has the funds to pay the full amount to person “A” on the 75th day BUT they will only have enough to pay person “B” for the first 25 days of their position.
Enter person “C” and the cycle continues. When done by a master scammer this type of program can sometimes run for a few years building membership levels sky high and always paying the oldest positions with money coming in from the newer ones.
Why is this bad? because at some point the scales will tip and there will not be enough money coming in to pay all that is owed. This is also the point when there will always be a crisis of some sort so that payout needs to be temporarily delayed while funds continue to pour in.
When there is enough to satisfy the operator the whole program will simply vanish along with the money and everyone will lose all the money they had in the program.
It is because of the greed inherent in all humans that this is so damaging.
Yes things can be drawn out a bit by actually selling a product and distributing some of that money but make no mistake about it this is NOT revenue sharing! No legitimate company can or will promise a guaranteed return on investment (which this is not)…
The reason is that profits can not be guaranteed in the future so shares can not be guaranteed either. JSS even tells you on their web site that they are a PONZI and not a legitimate business…
QUOTE:-”JSS-Tripler is Indefinitely Sustainable!”-:END QUOTE
People through greed, need or even desperation put rent money, food money, college funds and other monies into these programs and lose it all in the blink of an eye. If you had put just $10 in and lost it… no big deal right? Let me show you some math…
$10x 23,000 people is $230,000 … almost QUARTER OF A MILLION DOLLARS! which are being handed to the owners for free. The shame is that many will put much more into this program and lose it all.
There will be a few who were in early enough and pulled their money out before it goes away that will see a profit but they are most certainly outnumbered by those who will lose.
On to the Pyramid scheme…
On top you have the President, below him The Senate then the Congress…
Is there something wrong here? This is a pyramid with you and me at the bottom right?
Ok lets try this….
First there is the CEO then there are the VP’s followed by the board of directo…
What do you mean that can’t be a pyramid? It is honestly, as is almost every other organized structure in the world up to and including religion!
The church? Yup.
Network marketing and MLM? Yup.
Big companies like Ford or Horizon? Yup.
The mob? Yup.
Aunt Lou’s hair salon? If she has employees, you bet.
Even the family structure is all based on the same concept!
So where does the “scheme” part come in?
Well as far as I can determine, the schemes originated in Denver, Colorado, in
1934 or 1935 as the “Send-A-Dime Letter”. Long before the Internet was created.
“A pyramid scheme involves active recruitment and does not require a central administration, being defined in terms similar to that of a private lottery.”
The most recognizable form of them are the gifting programs that are prevalent all over these days. Unlike their Ponzi counterparts they do not involve a limited number of individuals getting rich off the contribution of many.
Instead they rely on the generosity of human nature to redistribute wealth without the government getting a slice of the pie and it is primarily for this reason that they are illegal.
Send “X” amount of money to the name on the top of the list, add yours to the bottom of the list after removing the top name and send out copies to as many people as you can is the basic concept.
Many of these are called chain letters or gifting programs and they rely on the fact that most countries have a legal structure in place to allow gifts to be made and received legally. here in the USA it reads as follows….
QUOTE:-
United States IRS Tax Code, Title 26, Sections 2501-2504 and 2511, which states that:
An individual may give as a “cash gift” up to $12,000 USD total, to as many individuals as that individual desires within a calendar year. While these gifts are non-taxable, and need not be reported to the IRS, there are conditions. In order to be deemed non-taxable, the cash gift must be given without the expectation of receiving anything in return.”
-:END QUOTE
P.S. The limit is now $13,000
Personal observation here… it says “to be deemed non-taxable the cash gift must be given without the expectation of receiving anything in return.” Personally I would then assume that if I made a gift “WITH an expectation of return” it would be taxable, but I am not a tax accountant nor a lawyer and therefore not at liberty to interpret the statement in any legal manner.
Everything said and done… it works, plain and simple. But because it is deemed illegal there is always the risk of it going away at any moment and nothing is gained in return. Honestly would YOU send $5 to a stranger without the expectation of gain or profit from it at some point?
If so, send me $5 now! :Þ
NOTE:- If you like my writing I post daily to my blog www.theprimusreport.com
All links to follow me on other networks are there as well,
Also complimentary copies of most of the books I write.
And links to Proven Paying Programs, Tools and Advertising sources
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Comments (49)
Franto Hruz16
Online Income Systems Development
Mike, you've been getting paid 2% DAILY for months - that's 730% a year not even counting compounding !!! Tell me in a few words where that money comes from and how you think it's possibly sustainable?
Franto Hruz16
Online Income Systems Development
When people lose fortunes at all the casinos in the US every day it's considered to be stimulating the economy. When working people lose their homes due to sub-prime mortgage lending scams it's just bad luck and when the Wall Street investment gurus created derivative backed AAA rated mortgage instruments and sold them around the world, resulting in the greatest financial global disaster in close to 100 years, you better take note that non of these online programs can even come close to the REAL
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
You are right everyone is entitled to their opinion. Just as people are entitled to present information from the authorized agencies with the power to prosecute people involved in questionable programs. When the information comes from The agencies mentioned like FTC, FBI and Attorney generals those are the people you need to convince because they are the ones who will prosecute. When someone points to that information and you don't agree then address the information or ignore it that is your
Maria A.8
Internet Marketing
Thanks Mike, I'm glad someone see's it that way! lol All the best to you too. :)
Mike Kontak6
Internet Marketer
Hi Maria, I totally understand that, you certainly did nothing wrong, we certainly have a right to address how we feel on any subject at hand. Discussing something allows us to see another point of view, and enlightens us on things that we may have overlooked at times. Why people take things so seriously, and in turn create disputes over a simple conversation, i'm not sure why that is, guess it is the nature of the beast. lol or they just don't have anything else better to do. :) All the bes
Maria A.8
Internet Marketing
Hi Mike, Thanks for voicing your opinion and that;s exactly right, it has been going on all day, sorry I even felt like I had a right to address my opinion. lol My intentions were to discuss this with Udo but of course being that everyone has a right to there opinions it escalated to several other people.I spent enough of my day on this subject, so I will in fact, put my hands up and move on.:)
Mike Kontak6
Internet Marketer
This has been going on all day as far as what I see lol I already had enough believe me. :)
Paula van Dun6
Social Marketing works.
This reminds me of all the people defending Kooday. They are silent now
Mike Kontak6
Internet Marketer
The messenger gets shot? That is certainly not my idea at all. Everyone has a right to speak an opinion no matter, if it is agreed upon or not. It does not at all mean the person who put the subject out there was wrong, but when you do put something like an article posting in a network, you will get all different opinions and no one is saying, anyone's opinion is any better than the other. It is just conversation, should not be addressed wrongfully, or taken that way, but for some reason, peop
Mike Kontak6
Internet Marketer
Paula, Thanks for your opinion but as I mentioned, and Maria has time and time again, nothing was proven that JSS is a ponzi and 28,000 other people are apparently convinced that it isn't, so when it has been proven then it is then we are in fact not promoting anything illegal. I don't believe you are following the previous messages to closely, because you would in fact, see that no one is promoting anything with the intention of presenting anything illegally, and as I suggested in a previous m
Paula van Dun6
Social Marketing works.
As always the messenger gets shot.If you are serious about building trustworthy relations with others it does not do ones reputation much good if you are promoting scams. Those programs either get shut down or simply disappear and the owner with the money earned also. People who followed you in such a program are not likely to join anything you are promoting.
Mike Kontak6
Internet Marketer
Believe me, we all believe that, and I am sure, we don't signup to programs with the intention of knowingly getting involved with something illegal. I can tell you, that no matter how much you research a program you are certainly not seeing everything that is going on behind the scenes. Maria, brought up a good point in one of her previous messages, if JSS or any other program are in fact ponzi's then they will in fact be presented as one, until then you will have a hard time, telling millions
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Sorry but I am quite sure that what I promote is legitimate. The concept of my program has been endorsed by the National Association of Attorney Generals. And you are right that many programs are scams, estimates by some sources are as high as 80% of all Internet marketing programs being HYIP's Ponzis, Pyramids, unsustainable etc. That should make people think about what they are getting into.
Mike Kontak6
Internet Marketer
Maria you are right there. There are many programs that people are dedicated too, that are much more considered a ponzi then JSS I can tell you that. You told her right, you certainly need to check the programs you may be representing as well.
Maria A.8
Internet Marketing
Have to tell you then, 99% of the internet will be having issues then, because if you think JSS is a ponzi, you better investigate the programs you may be representing. One way or another, they are most likely the owners of your programs are doing something that is causing them to be much more benefited in what they are doing than you, so once again, if that's the case, 99% of the people on the internet will be having issues. :)
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Normally it is the 'dedicated members that end up holding the bag when things go south. There are a lot of people out there who were dedicated members of a program that ending up with Indictments, fines and even jail time as a reward for their dedication. And the "I didn't know it was illegal because the Attorney General hadn't shut it down." is not going to be accepted by the court as a defense. When most of us say something, it is to make people aware of the reality of their situation. I w
Maria A.8
Internet Marketing
Thank you Udo, and I certainly did not mean any harm, just was giving an opinion is all, not that it mattered. and I do respect the fact, that you feel the way you do, and as I said, if this is in fact a ponzi scheme, I'm sure time will tell and if it means that I am one of the 28,0000 other people that are doing something illegal, it has not been proven in my eyes to be illegal, nor have I even considered it to be an illegal operation until I saw your post today. Once again, I respect you for
Udo Hoffmann14
Erudite polymath
Yes Maria you are correct, Honesty and Integrity do mean a lot to me. It is on those principles that I do business as well as live my personal life. As for stress... I gave that up in my youth as a waste of time and effort. Passion on the other hand is truly a driving force. I wish you and Mike well, I really do. but I already know the outcome of your endeavors and I'll be here for you when the happen. Not to gloat but to help you answer the question raised by all those who lost money after
Maria A.8
Internet Marketing
Apparently your in the wrong business Udo, maybe you should become a member of the Attorney Generals office. :) I see this means alot to you, and in all honesty, I wouldn't stress over it, not good for your health. :)
Udo Hoffmann14
Erudite polymath
ROFL!!! Well put Mike, Life is indeed a gamble for those with no control over it. Its always a pleasure talking to someone with a good sense of humor.