PAS BELOW BACK DIFFERENT NAME SAME GAME
"PROSPERITY AUTOMATED SYSTEM"
OR PROSPERITY NETWORK INC

Report by Retired Federal Officer


Last Friday I started getting automated phone calls to my office promoting a business opportunity.  It turned out to be a new recruit in a program called “Prosperity Automated System” or “PNI" (standing for Prosperity Network Inc.) …the local new rep (A Florida newbie who just signed up) directed me to “THE Webinar,” run by Xxx. Then I got emails from his sponsor “Bill Osterhout” who ended up calling me Sunday after I had viewed the “automated webinar”…..of course, I told Bill Osterhout I had to do my due diligence…..BTW, it was Wayne W. Tidderington, Jr. they contacted. 

Quickly I discovered in Google, MLM Watchdog had warned and written about him in 2006 when the SEC shut him and his “PAS” (Prosperity Automated System) down. He was really selling unregistered securities or investments by simply using all new definitions such as an “investment” becomes a ‘membership’ etc.  Bill Osterhout called me Sunday night and he claimed someone by the name of “John B” in San Diego owns the company and it has been operating for 3 years.  He said he is just a rep joining about 17 weeks ago and now is making about $30K per month.  This program is also called Premier Wealth System.  There is also a canned Webinar Presentation they use to suck people in.

Google turned up one of his self initiated press releases proclaiming this new highly lucrative home based business launching in May 2010.  Really, it's just a high ticket membership deal with a Aussie One-Up front end…..they are ‘spamming’ thousands of phone calls with an auto dialer and have a recorded pitch that is worked by the ‘newbies’ who have just signed up. If interest can be piqued by getting someone to look at the canned webinar online, then the ‘heavy hitter team’ of Bill Osterhout and Xxx step in to do the power close for packages and upgrades from $1497 up to $9000  (See highlight below).  The pitch promises between $10,000 and $15,000 per month, of course.  

Important links to Bill Osterhout’s History:

U.S. Securities and Exchange Action regarding Securities Fraud  Charges, Mail Fraud, Obtaining Money by Deception and Fraud:

http://www.sec.gov/litigation/litreleases/2006/lr19848.htm

Copies of the Filed Litigation by the Dept of Justice on behalf of the Securities and Exchange Commission:

http://www.sec.gov/litigation/complaints/2006/comp19848.pdf


PAS  DOWNLINE BUILDER A $15 MILLION DOLLAR SCAM
A FAILURE IN REALITY TO BUILD A DOWNLINE VIA FILL IN THE PAID BLANKS
Sept 2006 -- The SEC (Securities and Exchange Commission) is shutting down 25,000 websites that were fronts for an MLM downline buiding scam, accusing operators of running a $15-million pyramid scheme that used a “Pyramid downline” building scam. The SEC complaint targets the network creator and owner William M. Osterhout  out of Citrus Heights, Calif in this downline building scam.

One “landing page” says PAS "Showered people with Hands-Free Cash!" Visitors to the sites fill out forms and are later telemarketed by phone pro’s selling memberships for downline building for as much as $3,895.  The SEC said,  “New members are issued their own builder websites and eventually can receive a share of the money when more people buy memberships via their MLM builer sites, according to the allegations.

"Websites you get as part to the scam memberships do nothing but sell more memberships," said Stephen Donahue, an SEC enforcement official in Atlanta.  Though some websites offer links to products or services, "those were attempts to cloak what is a fraudulent pyramid scheme, giving it the appearance of multilevel marketing," Donahue said.  IN A VER VALID Statement SEC Rep. Donahue says, "We see the difference between head hunting Pyramids and True MLM's which are GOOD!  This downline building scheme disguised as a legit MLM Company was not.  Downline builders that do the work of MLM Downline Builders never work, the numbers won't run.

The MLM WatchDog Posted warnings about these downline builder - building scumbags in September of 2005.  Yet 1,000’s of people never did Internet Due Diligence to pick up the warning.  See how to due internet due diligence by going to the MLM Watch Dog website and see  http://www.mlmwatchdog.com/INTERNET_DUE_DILIGENCE.html

LOOK ---- HELP PEOPLE TO PROTECT A GOOD INDUSTRY MLM - NETWORK MARTKETING SEND YOUR FRIENDS TO THIS PAGE AND ALSO HAVE THEM SIGN UP FOR THE MLM WATCHDOG!  OR JUST SIGN THEM UP RIGHT HERE!


MORE MLM DOWNLINE BUILDER SCAM INFORMATION
                          

Buying Downlines Does work - Go Shopping (opens new window)
http://www.mlmconsultant.com/sell_downlines_mlm.htm


WHY "WE BUILD YOUR DOWNLINE" SCHEMES DON'T  WORK
Read 1/2 the way down the page BELOW  dated:
3 March 2002 - We "Build Your Downline" & "Dowline building" pyramid schemes take  endless streams of recruits for success.
MLM PORTFOLIO OR MLM UMBRELLA FAILURES
NOT A DOWNLINE BUILDING SCAM - JUST ALWAYS FAILS
I have a hard editorial opinion on these downline builder dogs after watching 20 years of failures.  There is a 4-5 year memory cycle on these dogs that allows these old failures to keep “re-inventing” themselves.  Joining multiple MLM's (1-2-3-4-5) as a portfolio or umbrellas sounds good in theory, but not in practice.  Here are some facts about these DOA (Dead on Arrival) deals:

1.  MLM Portfolio -  Umbrella companies are confusing downline building clubs to benefit the guys at the top.  Some have been honest failures.  Some included friends of mine that I violently warned (shouted at) such as "Destiny," ran by two major builders.  Others are purely deceptive scams started by plotters who know that being at the top of the downline in the company will benefit them ( to the degree they think, never happens).

2.   Little guys at middle-bottom can’t work (build) 1 MLM much less 2, 3, 4, or five.  The overflow or spill promised…. that the downline builders brought them in with,  mathematically can’t work.  Let’s see you need a Gazillion people to fill level 12 for the whole company - club or what ever?  Never happens - mathematically impossible.   See the numbers in the March 2002 article below.  Even "cut in half" or a "quarter" that leaves a dramatic building to get the 12th level to fill!  These type of downline builder are a cousin to the ones below.

3.  At the end of about 8-14 months the guys at the built downline bottom leave and the “window shade effect” disintegration starts.   Level by level faster and faster.  Br - whop, whop as the shade rolls up and your time and money are gone.  Many members go to the law because they are mad.  MLM companies have terminate Orignators out company out of company because of "flak" created. Or

4.  Losers complain to the law and the law goes after the Umbrella company.  If it is a club (a trick pulled to try to get away from registering with states) regulators  then fall upon the owners!  Other pyramid "gethas" Ouch!  appear too.    Some Umbrellas have even taken the first company, then inverted the downline stack for the second company.  That ended up a worse mathematical model! 

5.  Guys at the top (club founders)?  They make out sometimes, but most have ended up flat broke and disappeared out of the MLM Industry (1000’s of angry voices chasing them).  Ed. Note:  The Watchdog's opinion is to "run" when these "NEW" innovations get rolling full steam!  Stay out of their way!


AMERICAN BUSINESS PUBLICATIONS = JAIL
Aug 2003 -- Ed. Note:  By all reports Don Mikrut is a decent guy that got bad advice when he started American Business Publications THE PAID DOWNLINE BUILDER.  We know that many people that start illegal companies just don't do their research or ask history.  They fight on keeping the company alive.  They make more mistakes trying to get their company to survive.  After ABP COLLAPSED in 97 over six others sprang up like Winners Circle (taken down by Florida AG), Winning Edge (taken down by Nevada - with guns and hand cuffs), Purchase Plus (do a web search on this one)  a phone card deal out of Ohio, and several others that fell apart.  Look for the new one Turnkey PC to join the ones above.  DO NOT be a top distributor because in some of the cases above leaders got new handcuffs on their WRISTS along with company owners! GMT 101 is the latest and I am still waiting for the handcuffs to come out......they will!

Also Note in the court charges below the Government states that there were NO CUSTOMERS!   The definiation of a CUSTOMER is a person that buys the product or service - THAT IS NOT IN THE PAY PLAN = MAKES NO MONEY!

WHY "WE BUILD YOUR DOWNLINE" SCHEMES DON'T  WORK
DUE TO CRITICISM (SEE DOWNLINE BUILDING SCHEME BELOW)
3 March 2002 - We will "Build Your Downline" pyramid schemes  require  endless streams of recruits for success.  "New" recruits  give money to recruiters who swear that they will build their downline.  Some of these "builders" are honest but just "MATHEMATICALLY CHALLENGED."  The pile of people to build a downline for everyone that comes along would be about 63 feet high (figuring the average height in the US at 5'8").  To recruit 10 people if  for every one if you were on the 9th level would take 10 billion people.  Little hard since there are only about 4.7 billion people on earth! Intergalactic recruiting?
A diagram will help!:
1
10
100
1,000
10,000
100,000
1,000,000
10,000,000
100,000,000
1,000,000,000
10,000,000,000
Ed Note: Now you can bet that the founders of the company or downline building scheme have themselves and their family filling levels 1, 2, and 3 (or more).  So you are starting, at best, on level 4.  For the 1000 of you starting on level 4 it is going to take 10,000 people just to get you 10 people.  To get you guys 20 people it is going to take 100,000.    To make any of you money you have to fill your 3rd level which will take a million people (1,000,000).  For your information there are no million people MLM's left in the U.S.  To continue your 4th level would take 10 million people!   Ed. Note: That is why Winner's Circle, Winning Edge, Purchase Plus, and others ended up with Attorney General's eating their lunch.  The numbers don't work and the money doesn't flow!  Simple Math!  Many people lose their money.  Ed. Note:  Look for words like Guaranteed income, no recruiting, we build your downline for you  and etc.  Anything to attract the easy money by investing.


FEDERAL INDICTMENTS RETURNED IN LAS VEGAS
AGAINST HUSBAND AND WIFE FOR MARKETING SCAM
LAS VEGAS - - Daniel G. Bogden, United States Attorney for the District of Nevada and Robert N. Carwell, Team Leader of the U.S. Postal Inspection Service (Ed. Note: rare hit) for Las Vegas, Nevada, announced that DONALD J. MIKRUT and SUE ANN MIKRUT, ages 54 and 56, respectively, and residents of Las Vegas, Nevada, have been charged by the federal grand jury in Las Vegas with Conspiracy, Mail Fraud, Wire Fraud, Money Laundering, and Aiding and Abetting, for allegedly participating in a scheme to defraud persons of fees they paid to a marketing company owned and operated by the defendants.
The Indictment, returned on August 13, 2002, but unsealed on September 4, 2002, states that DONALD MIKRUT owned and operated American Business Publications, Inc., a publishing and marketing corporation located in Las Vegas. SUE ANN MIKRUT, the wife of DONALD MIKRUT, was at various times editor, executive assistant, vice president and general manager of American Business Publications, Inc. DONALD MIKRUT wrote a book, "How To Make America Strong & Wealthy One Person At a Time", which he distributed through the mail to hundreds of thousands of persons throughout the United States. In the book, DONALD MIKRUT solicited persons to join a "multi-level marketing" company, Financial Independence Network Limited. "Multi-level marketing" is a system of selling goods and services through independent distributors. The distributors typically receive commissions for their sales of company products and also for the sales of products by additional persons they recruit to join the company. Beginning in 1995, Financial Independence Network Limited marketed several money-making "programs", such as "The Thirteenth Check Program" and "Pick Your Monthly Income Program." DONALD MIKRUT advised customers that if they would pay him a one-time "marketing fee" of $60 to $24,000, he would perform their recruiting responsibilities and get other persons to join up. DONALD MIKRUT advised his customers that the more they paid, the more they could earn. DONALD MIKRUT advised that they could earn each month for the rest of their life the amount of the "marketing fee" they paid to him. Customers were also told they could receive full refunds of their marketing fee at any time if they were not satisfied. In addition to saying, "there were no customers," the government says, The Indictment alleges that approximately 50,000 persons became victims of the fraud and that they lost more than 30 million dollars.    Full Details
>>>>>  http://www.usdoj.gov/usao/nv/home/pressrelease/september2002/mikrut905.htm

LIBERTY MANAGEMENT
Dear Rod,

I'm writing about my experience with Liberty Management Group They began operations in Phoenix, AZ this past July 2001.  They position themselves as a network marketing company.  I enrolled in August, the day after I found out I had been laid off from my job.

When I read (on your website) Most of the problems we have today is with new companies being under funded or illegal (unknown to neophyte distributors). It is estimated that 3,000 new companies (of all sizes) that appeared to be MLM companies tried to start in 1997. Half were illegal and not NetWork Marketing companies. They were what we call Psuedo-MLM's through intent or stupidity. Their illegal structure or pyramidal activity doomed them from the beginning. I wanted to contact you immediately because I am a "neophyte" and I have learned some really hard lessons recently.  I question Liberty League's business practices and structure (is it illegal?  is it a pyramid?) and want to ask you for a review of the company.  Misrepresentation is another issue.

Though I was able to get my money back via my credit card (for non-delivery of goods), I have contacted an attorney to review the  4 year lease I signed with Leasecom for a lease of their credit card machines (merchant account).  My buyout on this lease is aprox $3,100.

This experience has been a true nightmare.  I am currently unemployed and
looking for LEGITIMATE work in the Phoenix area.

I am curious if any other questions/comments/complaints about Liberty League have made it to you
and what you think of this company.

Sincerely,
ANN   XXXXXX (Name Protected but saved for court actions)

p.s.
I am also forwarding another web site on the FTC rule.  This was big news to me. 
I just found it 15 minutes ago.

Rod's comments:  This is one of the most cruel of Downline Builder schemes.  They nailed this poor woman for a credit card machine lease on top of the the money she put in to get her Downline built!  The lease deal means the company collected about a grand cash when they turned it over to a leasing company.  This was a trick used by 2 Extreme Performance out of Dallas when they were running thier scam.  I have a strong suspicion that the Liberty League people have some past history with 2XP as it was called.   I had over about a 100 people that we had to clobber the  AG's with to get the leasing company to "let go" of the 3 year contract.  The worthless FTC did not do beans........ They came in after the 2XP Downline building scheme was dead.  The people with the leases still had to fight on thier own..   The FTC did not do a thing for them...including at least putting out a letter to support the people scammed.

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