Barry Minkow

"Buy 1 for yourself and get the chance to sell your friends and family 5 and get your downline started!" We examine the multi-level marketing industry, where only the people who come up with the ideas make any money, and everybody else is left unhappy, broke, and tired of reading scripts and selling overpriced vitamins and similarly worthless products. Includes Global Prosperity, Pinnacle Quest International, IRS Codebusters, Stratia, and other new Global Prosperity scams.

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Re: Barry Minkow

Post by wserra »

EagleOne wrote:Rod and Barry are both friends of mine. It truly pained me to see what Barry did, but he is still my friend and always will be. Just as it pained me to see what Rod has written, but he is still my friend and always will be.

Just my two cents worth.
Loyalty to friends is a good thing. And your two cents are always welcome here, Lynn.

I don't know either Minkow or Cook. But, from what I know of them, I don't think I'd want to.

Minkow: As I wrote above, I've represented plenty of con men. A couple became friends of mine following the representation. Those two guys are smart and funny - terrific company over a beer or three. That's one of the things that made (hopefully not "makes") them successful con men. But, for guys like these, the con definitely has a life of its own. They get a high from running it, similar to what you see in "The Sting". I doubt that either would set out to con me, but my experience would not let me bet on that.

Cook: How does he make his money? Well, he tells you: "Our Golden Word Helping Good Folks make money". His "golden word" consists of books and paid subscriptions on MLMs. Suppose the odds are overwhelming that none of them will help "good folks" make what they can at the counter at Mickey D's. How is Cook different from the ripoff MLM "tools" business? They both advertise that, for a fee, they will help you make money in a business in which it is all but impossible to make money without being on the top of the pyramid. What does that make Cook?

I keep coming back to the findings of the British court as to Amway, the granddaddy of all MLMs. Yes, it's legal. But:
the reality of the Amway business is that the nature and rewards of becoming an IBO and participating in that business are such that only a very small number of IBOs make any significant money from their participation. In fact, the substantial majority of IBOs make no money and indeed by reason of their payment of the registration fee [£28] and the annual renewal fees [£18], lose money from their participation…For the period from 2001 to 2006 (a) 95% of all bonus income was earned by just 6% of the IBOs; and (b) 75% of all bonus income was earned by less than 1.5% of IBOs. In 2005-2006 there were 39,316 IBOs who shared a bonus pot of £3.427 million. But of this total, 27,906 IBOs (71%) earned no bonus at all, and 101 IBOs (0.25%) shared £1.954 million between them. That leaves a group of 11,309 IBOs to share a bonus pot of £1.473 million. Within that category there was a group of 7,492 IBOs…who between them shared £101,400. This gave them an average annual bonus of just over £13.50, a sum less than the annual renewal fee of £18.

The picture can be presented in a variety of ways: but it is consistent. Between 2001 and 2006 the proportion of IBOs not earning any bonus income varied between 69% and 78%. In year 2004/5 only 74 out of 24,342 IBOs earned over £10,000 by way of bonus. In that year only 4,076 IBOs earned enough bonus to cover the annual renewal fee: 21,266 did not even cover their most basic running cost from bonus payments (though there may be retail margin).2 If very modest business expenses are factored in (say £100 on petrol or the purchase of BSM) the picture is even starker with only 1,820 IBOs making sufficient from bonus payments to cover those expenses and 23,521 IBOs failing to do so. In the period from 2000 to 2005 Chris and Sharon Farrier’s bonus income ranged from £21,495 to £7,971 and averaged £12,850. Over the same period Dr Anup Biswas ranged from £137 to £433 abd averaged £306. These are the people whose testimonials said respectively that they were earning “the equivalent of good executive size income”, or was deriving an income that “continue[d] to climb to replace my full professional salary”.
Only one in fifteen made enough to cover expenses. Given those numbers for the industry's poster boy, how can someone in good conscience charge for "helping good folks make money"?
"A wise man proportions belief to the evidence."
- David Hume
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Re: Barry Minkow

Post by Doc Bunkum »

In case anyone is still confused about what's going on here, Lenny Clements explains in great detail the findings of this case in his latest MarketWave Alert...

Minkow Pleads Guilty to Conspiracy/Fraud Robert FitzPatrick to be Tried for Libel

Annotated with no less than 14 footnotes, I might add, to make sure everything is crystal clear.

In what must be a first, Lenny admits...
Now I'm completely confused.
I was too at first, but it appears Lenny is running two seperate court cases together in this report.
Also, prolific anti-MLM critic Robert FitzPatrick, who is founder and chairman of the Pyramid Scheme Alert organization, had his SLAPP motion denied in part related to Medifast's libel suit against him...

As for the Medifast libel suit against Minkow and Coenen, Medifast does have the option of appealing. Since the legal definition of libel seems to be a crap shoot, and the odds of crapping out twice in a row are very slim, they should certainly go for it. However, they'd have to appeal to the 9th Circuit -- the same appeals court that ruled against Omnitrition in 1994. So once again, all bets are off.


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Re: Barry Minkow

Post by soapboxmom »

Len's statement:
Now I'm completely confused.
No kidding, Clem.
But hold on. Barry Minkow did, in fact, directly and specifically accuse Usana of violating California's code 327.<!--[if !supportFootnotes]-->[3]<!--[endif]--> Yet, the same California court (although within a different judge's courtroom) ruled in favor of Minkow's SLAPP suit -- for making the identical set of claims that FitzPatrick has made against Medifast!

Lenny has confused the definition of a SLAPP suit before. Minkow had a case filed against him by USANA. It became a SLAPP suit as that was the nature of the case under California law where bloggers have excellent protection against frivolous suits. USANA just tried to sue and spend him into silence. USANA of course couldn't produce sufficient eveidence for any of that to go forward to trial. As usual Minkow's stock shenanigans were his real and only problem. USANA had the whole mess reversed on them and they had to pay Minkow's cost of court just as Medifast has been ordered to do. Hilarious!

I absolutely adore the way Clements argues so effectively for our side. He is doing a first rate job of helping us expose and take out the MLM industry.
However, they'd have to appeal to the 9th Circuit -- the same appeals court that ruled against Omnitrition in 1994. So once again, all bets are off.
So true. :brickwall: :lol:

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Re: Barry Minkow

Post by EagleOne »

Wes:

I could never understand how people would pay Rod for his material, since the entire business model of MLM sucks. Yet he has this great following, and I honestly don't get it. He has to be helping them make money or why would they continue to pay for his services? Either that or there are that many new suckers getting into MLM that buy from him.

At least he does go after the super bad in MLM that are outright Ponzi's. He drove a lot of traffic to Eagle when we were just getting started, and it was greatly appreciated. He has also been the one we turned over any info we had on MLM's that were total frauds, since he had the contacts to the authorities we do not have; as it's not our 'bag.'

We have enought scams, frauds and Ponzi's to deal with in our area of expertise, and don't need to be involved in MLM too. We have had a lot of people asking us to get involved, but we have to do what we do best, and MLM is not one of them. I have discussed this with our team and they agree we need to focus on "our stuff" we know and are successful in shutting down.

But he is fun to talk with, that's for sure. He never is at a loss for words, but then neither am I. :roll: :lol:
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Author: Robbing You With A Keyboard Instead Of A Gun - Cyber Crime How They Do It Available in soft cover and eBook on Amazon.com
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Re: Barry Minkow

Post by wserra »

EagleOne wrote:I could never understand how people would pay Rod for his material, since the entire business model of MLM sucks. Yet he has this great following, and I honestly don't get it. He has to be helping them make money or why would they continue to pay for his services? Either that or there are that many new suckers getting into MLM that buy from him.
There's another reason. For many people, MLM is a cult. They're gonna get rich, working a few hours a week from home. Reason doesn't figure into it, a blindness of which the profiteers take full advantage. How many of the rabid Amway folks in the famous Dateline video are making any money at all? Doesn't stop them from paying to be there and go nuts, right?

The main focus of this board, like yours, is not MLMs. It's the tax protester / sovereign citizen gurus and their followers. In that context, we see the phenomenon all the time. A good example is the Peter Hendrickson - "Cracking the Code" crowd, the subject of many threads in the TP forum. Hendrickson is currently in federal prison for drinking his own Kool-Aid. One would think that, to any sentient being, that would be a hint and a half that it doesn't work. But there is an entire group of lemmings determined to follow their leader off the cliff.

The fact that people pay to go to Amway conventions doesn't mean they're making anything through Amway. The fact that people pay money and homage to various detax/sovrun gurus doesn't mean that objectively there is any chance at all of their nonsense working. Why is Cook different?

I have a suggestion. Ask Cook to take his best shot: what is, in his opinion, the number one best "opportunity" in the MLM world? Post his answer here, and let's take a look at it.
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Re: Barry Minkow

Post by Judge Roy Bean »

It seems the common denominator among MLM / TP / conspiracy believers / etc., is a compelling need to find and associate with other people who share common beliefs - and those beliefs include secrets or mysterious things.
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Re: Barry Minkow

Post by Thule »

Judge Roy Bean wrote:It seems the common denominator among MLM / TP / conspiracy believers / etc., is a compelling need to find and associate with other people who share common beliefs - and those beliefs include secrets or mysterious things.
For some people it seems to be the other way around. They have this overblown sense of entitlement, which makes them vulnerable to any pseudo-cult that offer access to Things Most People Don't Know. Like some of the LHers seems to have drifted from scam to scam. When one collapses, they move on to the next guru who will tell them how special they are (for a modest sum).

I know, it's a bit like the chicken and the egg.
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Re: Barry Minkow

Post by notorial dissent »

Judge Roy Bean wrote:It seems the common denominator among MLM / TP / conspiracy believers / etc., is a compelling need to find and associate with other people who share common beliefs - and those beliefs include secrets or mysterious things.
Maybe because sane people point and laugh at them!!!!!!
The fact that you sincerely and wholeheartedly believe that the “Law of Gravity” is unconstitutional and a violation of your sovereign rights, does not absolve you of adherence to it.
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Re: Barry Minkow

Post by soapboxmom »

For the love of mud. That nut Rod Cook is at it again. He has declared USANA exonerated. I responded, but would love for more folks to weigh in.

http://www.realscam.com/f11/rod-cook-de ... rated-644/

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Re: Barry Minkow

Post by wserra »

SBM: we have thoroughly vetted the issue of USANA's purported "exoneration". Len Clements and I went 'round and 'round in considerable detail, from here to the end of the thread. The short version: industry apologists Clements and Cook can write whatever they want, but the person whose writing counts - the judge - threw out all of USANA's defamation claims against Minkow and awarded him costs and attorneys' fees. Stock manipulation aside (which I wrote all along was likely to cause Minkow problems), that order exonerates Minkow, not USANA.

Minkow's subsequent legal problems have nothing to do with USANA's case against him. Judge Campbell didn't take Minkow's word for anything. She examined the evidence. It's like claiming that Sammy Bull's subsequent legal problems somehow "exonerated" John Gotti.
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Re: Barry Minkow

Post by JamesVincent »

wserra wrote:
EagleOne wrote:I could never understand how people would pay Rod for his material, since the entire business model of MLM sucks. Yet he has this great following, and I honestly don't get it. He has to be helping them make money or why would they continue to pay for his services? Either that or there are that many new suckers getting into MLM that buy from him.
There's another reason. For many people, MLM is a cult. They're gonna get rich, working a few hours a week from home. Reason doesn't figure into it, a blindness of which the profiteers take full advantage. How many of the rabid Amway folks in the famous Dateline video are making any money at all? Doesn't stop them from paying to be there and go nuts, right?
The cult mentality is one of the defining traits of a successful MLM person. Whether you believe in the MLM model as a viable, supportable business model or not, there are people making money at it. A small percentage, very true, but there are some. One of the reasons Amway has been one of the biggest names in MLMs for so long, whether good or bad, is that the whole setup is very similar to a cult, with the personal development classes and books, the meetings, and the way the whole company is structured.

To be able to succeed in an MLM you have to go through these changes in the way you think and when you do, your basically aligning yourself with some guru who figured out a way to do it and now sells and tells you how to do it. Its funny, but the same books and same mindsets that make a successful MLM person, also make a successful business person. Unlike what people think when they sign up, it is not short hours a few days a week, it is a 7 day a week job with no guarantee of recovering what you put into it. It is long hours and a lot of work.
Thule writes:
For some people it seems to be the other way around. They have this overblown sense of entitlement, which makes them vulnerable to any pseudo-cult that offer access to Things Most People Don't Know. Like some of the LHers seems to have drifted from scam to scam. When one collapses, they move on to the next guru who will tell them how special they are (for a modest sum).
Pretty much dead on. The sense of worth is low in many who look into MLMs, or any of the other scams, as their savior, in the sense that they feel that they are owed this opportunity. Theyll pay someone to make them feel better about themselves and will try to reach that high branch but fall short. The only good thing about the entire business is if someone actually gets involved and does go through some of the personal development classes and does actually work on that, itll improve all aspects of their lives. Bringing a higher self-worth and bringing themselves to the point where they dont need someone else to tell them how good they are, theyll already know.
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Re: Barry Minkow

Post by Cathulhu »

JamesVincent wrote:.
Pretty much dead on. The sense of worth is low in many who look into MLMs, or any of the other scams, as their savior, in the sense that they feel that they are owed this opportunity. Theyll pay someone to make them feel better about themselves and will try to reach that high branch but fall short. The only good thing about the entire business is if someone actually gets involved and does go through some of the personal development classes and does actually work on that, itll improve all aspects of their lives. Bringing a higher self-worth and bringing themselves to the point where they dont need someone else to tell them how good they are, theyll already know.
James, you don't need an MLM, you need a vision quest! But stay away from sweat lodge gurus.
Goodness is about what you do. Not what you pray to. T. Pratchett
Always be a moving target. L.M. Bujold
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Re: Barry Minkow

Post by JamesVincent »

Cathulhu wrote:
James, you don't need an MLM, you need a vision quest! But stay away from sweat lodge gurus.
lol. Not anymore I dont and havent for a awhile. I have got three little things that got me to see what I needed to see and theyll be home from school in a little while. I might go through the occasional period of doubt dealing with their mother and the courts but Im pretty sure what Im doing is good for all of us. It also helps that all four of us are in weekly therapy. The things that we were/are/will be going through thanks to my ex are atrocious and I wouldnt wish them on anyone else and it helps to have a professional walk you through it. By the way Wes Im not doing One24 anymore, having the website go down at least once a month and having 3 months of commissions disappear were enough for me.
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Pardon your mind through the chains of the divine
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Re: Barry Minkow

Post by Cathulhu »

JamesVincent wrote:
Cathulhu wrote:
James, you don't need an MLM, you need a vision quest! But stay away from sweat lodge gurus.
lol. Not anymore I dont and havent for a awhile. I have got three little things that got me to see what I needed to see and theyll be home from school in a little while. I might go through the occasional period of doubt dealing with their mother and the courts but Im pretty sure what Im doing is good for all of us. It also helps that all four of us are in weekly therapy. The things that we were/are/will be going through thanks to my ex are atrocious and I wouldnt wish them on anyone else and it helps to have a professional walk you through it. By the way Wes Im not doing One24 anymore, having the website go down at least once a month and having 3 months of commissions disappear were enough for me.
Good on you, James. Both for having the courage to get yourself and the kids into therapy, and being the guy who comes through for those kids.
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Re: Barry Minkow

Post by Judge Roy Bean »

Whacked again:
Barry Minkow owes homebuilder Lennar Corp. more than $583 million after pleading guilty to extorting and defaming the company to hurt its stock price, a state judge ruled.
http://www.courthousenews.com/2011/06/21/37560.htm
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Re: Barry Minkow

Post by notorial dissent »

OWWW!!!, undoubtedly well deserved, But doesn't the stone and turnip rule come in to play here?
The fact that you sincerely and wholeheartedly believe that the “Law of Gravity” is unconstitutional and a violation of your sovereign rights, does not absolve you of adherence to it.
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Re: Barry Minkow

Post by Judge Roy Bean »

notorial dissent wrote:OWWW!!!, undoubtedly well deserved, But doesn't the stone and turnip rule come in to play here?
Actually, there is no stone and turnip rule.

It's up to the victims to pursue the crook.
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Re: Barry Minkow

Post by notorial dissent »

I was being facetious, you do know what that is???

Unless things have changed dramatically recently I didn't think Barry had a pot or anything else left to spit in let alone anything else, so they might as well triple the amount for all they are going to get out of him, and I would think the legal fees would be more than they are ever likely to recover.
The fact that you sincerely and wholeheartedly believe that the “Law of Gravity” is unconstitutional and a violation of your sovereign rights, does not absolve you of adherence to it.
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Re: Barry Minkow

Post by wserra »

Yesterday Minkow was sentenced to five years, followed by three years of supervised release. In addition, he was directed to pay Lennar $583,573,600 in restitution.

I doubt they'll take a check.

Minkow is to surrender to the designated institution on September 21.
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Re: Barry Minkow

Post by notorial dissent »

And he's going to get this $583,573,600 where????

His good looks and charm obviously aren't going to do it, and I definitely wouldn't accept a check, or probably much else from this man.
The fact that you sincerely and wholeheartedly believe that the “Law of Gravity” is unconstitutional and a violation of your sovereign rights, does not absolve you of adherence to it.