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)
Mike Kontak6
Internet Marketer
Udo, LIFE is a Gamble, deal with it!
Udo Hoffmann14
Erudite polymath
Gonna have to pull out the big shovel to move this pile.... Mike, Maria, you both are claiming that if I can make money with an illegal scam its ok unless I get caught? ......Read the law, ask your lawyer, police department (fraud division), Attorney general, the FBI, FTC etc...THEN come back and tell me they told you its that its ok to break the law!.. Oh and Mike... anything that's billed as "Indefinitely Sustainable" is not an investment...its a gamble.
Mike Kontak6
Internet Marketer
Yes Maria I so agree with you. As HUGE as JBP and JSS is and with all of the popularity it has seen in the last 8 months, If this was totally Illegal, it would already have been stopped. I too am a supporter of JSS and their programs. I have several Hundred dollars invested as well,AND I am earning a living from those investments.
Maria A.8
Internet Marketing
Yes apparently you are confused, . Once again, we all have an opinion, and in regards to breaking the law, nope I am not breaking any law, not the owner of JSS just a dedicated member like 28,000 other people and ONCE AGAIN, until the law steps in and PROVES to us that JSS is illegal I will continue to be dedicated. :)
Peter M.7
Pro Internet Marketer
I really like this discussion forum, especially the contributions of Udo. Udo your are a great man with great ideas..
Udo Hoffmann14
Erudite polymath
Maria I am confused... You say "I believe when you bad mouth a company that is also a choice"...I just quoted the law not badmouthed the company. You also say "it certainly does not mean that everyone WILL in fact agree with the way you feel"...Again what does how anyone feels have to do with the law. Then you say... "I am not in fact denying the law," ... (I just want to make sure I have this correctly)... you acknowledge the law but chose to break it anyway correct? ...Finally you close with
Maria A.8
Internet Marketing
I think you may need to suggest that to 28,000 other people as well Thanks again for your advice :)
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Exactly why I suggest you do not take my opinion but contact the Attorney General's Office, the FTC or the FBI and get THEIR opinion. I firmly believe if someone has confidence that a company is legitimate, they would have no reservations in doing just that.
Maria A.8
Internet Marketing
Yes indeed and I believe when you bad mouth a company that is also a choice, and it certainly does not mean that everyone WILL in fact agree with the way you feel. :) I am not in fact denying the law, nor am I the law, nor will your opinion or mine, going to change anything! :)
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Unfortunately like with all scams, until people get burned and make complaints nothing happens. The Attorney Generals office is not staffed by mind readers and every day more questionable programs and outright scams pop up. If someone breaks into a vacation home and steals everything in it while the owners are gone for 6 months, does the fact that the police don't know about it make it legal? Or is it still a crime? The answer is that it is an unreported crime, in the same way that these Ponz
Udo Hoffmann14
Erudite polymath
How's that quote go.... "Blind are those who have eyes but do not see...." or was it Matthew 7:6.... My benefit is speaking the truth so that people can make an informed choice as to what they do. Denying it does not change the law Maria. If you love and support JSS that's your choice.
Maria A.8
Internet Marketing
Thanks for that advice. I think if something is illegal the Attorney generals office will in fact be the one to close them down and really are the only one's that have any say, what is an is not illegal. There are thousands of people that are in fact struggling everyday, and in my opinion if this can help a few people see a better future, then until the law state otherwise, it will continue on, no matter what udo continues to prove or anyone else. :)
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
I think Udo gave you the perfect suggestion Maria. Talk to your State Attorney General, talk to the FTC or talk to the FBI. Anyone of those agencies will be more than happy to confirm what Udo has posted. I have invited people to contact them and state their argument about the legitimacy of these programs. Funny how no one has ever taken me up on that challenge. Instead they keep coming back to threads like this and stating how these schemes are paying people, these schemes are legitimate,
Paula van Dun6
Social Marketing works.
Great post. Hope some people wake up.
Maria A.8
Internet Marketing
One other point I would like to make here. If there were more programs like JSS not referring to copycats sites that are just doing it to make a fast buck I am speaking about like JSS, that in fact cared enough about others as Frederick Mann does, this would be a much better world to live in, and there would be less poverty, and a lot less hardships in the world. Where the greed comes in are people that have money, and are not looking to invest there money to help others that are not as fortun
Maria A.8
Internet Marketing
Just curious to what benefit do you get to slash a business that is helping so many through these tough times? I am not asking this sarcastically either. Once again, until a business is PROVEN illegal or in anyway, shows signs that they are in fact trying to take money from others and not provide something back in return or doing anything in any aspects illegal, like SO MANY other programs are, then I really think you should leave well enough alone. I think, there is NO harm done. I really th
Udo Hoffmann14
Erudite polymath
The choice to follow or break the law is always up to the individual but please don't go spraying Fabeeze on it just because you don't want to acknowledge the smell or clean up the mess.
Udo Hoffmann14
Erudite polymath
Maria... investigations take time and it is not uncommon for several years to pass before legal action is taken Note "Jewelway vs FTC" took almost 4 years and by then people lost millions. Stormpay took almost as many years to close..etc there are so many of them. As to others posting about other opps... how does this make JSS legal? Don't believe me... go ask YOUR state Attorney Generals office to give you THEIR view or contact the FTC directly if you don't want to read what they say on thei
Maria A.8
Internet Marketing
Hi Jan, I can't agree with you more. :)
Maria A.8
Internet Marketing
There are in fact, postings like this for just about EVERY opportunity out there.. I believe if they feel they are not getting there share or cut, so to speak, that is the negative consequences that arise. If they were and are as illegal as they state they are, the Attorney Generals office would in fact have investigated then further and closed them down a long time ago. :)