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Beware of software schemes that offer amazing rewards -they may not be all that they seem, warns Rory Egan
Sunday September 26 2010 A few weeks ago, I was asked by a friend to go to the Red Cow Inn to see a business opportunity that would make me a fortune and set me up for life. At the meeting I heard of this software company, whose St Louis, Missouri, headquarters was located between Google and eBay and which was run by respected businessmen and backed up by millions of dollars. The software was unique; it was a million-dollar brand and was fully patented. However, after looking into the product and the company and consulting independent technical experts, an actuary, former distributors, international trademark and patent lawyers and even the Better Business Bureau and FTC in America, I came to a very different conclusion. What I found was an international get-rich-quick scheme, co-founded by two Americans, one a convicted fraudster who was previously involved in one of the biggest global pyramid schemes of all time, and whose latest scheme, according to an expert in Irish Law, "had many of the hallmarks of a pyramid promotional scheme". The product was called My Shopping Genie and purported to be an application which, when downloaded on to your computer, sits on top of Google and kicks in when you are searching for a product. At the first meeting I went to, I met Hugh Paul Ward, the main distributor in Ireland. He gave a very slick presentation and told the room of hopeful investors that he had been over to My Shopping Genie offices and had been really impressed. According to him, the average American saves $200 per month using the Genie. So here was the magic bit. You're impressed that everyone would want a Genie. You could now give this away for free to family and friends and every time they made a search using the Genie, you get paid a 'pay-per-click' income. "As you click, you get paid. You don't have to buy anything off these websites. When you click on those links within the comparison section you are making money. You click you get paid, you click you get paid. You don't have to buy anything," he said. According to Mr Ward, you can earn an average of $3 a month in 'pay-per-click' income from each Genie you give away. That's $300 a month if you give away 100 of them to family or friends.
All you have to do is sign up as a distributor for $199 and pay a monthly subscription of $29. It doesn't sound much, but it adds up to an impressive $547 in the first year. According to Mr Ward, there is money to be made by giving away the genie. However, if you build a team of people to give it away, you can make a fortune. The earnings were impressive. Get two people to join up and they give you $100, get four and they give you $200. They also give you $10 a month every time those four pay their monthly subscription. Even if you went off on holidays for a year, if those four signed up another four, you would get the equivalent of a further $12.50 per person and $2.50 per person per month signed up below you. You could earn up to $20,000 a week this way! This was clearly where the big money was made. That's over a million dollars a year to an ordinary distributor. I decided to research the software, the company and its promoters and was stunned by what I found. The company was co-founded by Bruce Bise and David Freed. Bise had been sentenced to seven years in jail in the US for felony forgery and fraudulent schemes artifice. When he got out of jail he became involved in a series of multi-level marketing schemes such as Celebrity Galleries International, My Hand PC and Get Moving Today, which filed for Chapter 11 (bankruptcy protection) leaving thousands of investors stranded. David Freed was the international marketing manager of that company. I asked FR Kelly, international patent and trademark lawyers, to look into My Shopping Genie and their holding company, My Net Universe. To my great surprise they informed me that My Shopping Genie wasn't even trademarked. The company had started the process but hadn't followed it through. Furthermore, a company called Kelkoo had a similar product called "Shop Genie" registered much earlier already. I approached RTE's Prime Time with what I had found and they agreed to work with me on it. With producer Bill Malone I went undercover to meetings, which were held in the Red Cow Hotel on Thursday evenings mainly. We sent the software to be analysed by RingJohn, internet marketing and advertising consultants. John Ring himself found plenty of odd features. He also found that when he replicated the searches that Mr Ward had done, all prices came back in sterling. We couldn't find an Irish site in any of his searches. Some Genie! Mr Ward declined an opportunity to go on Prime Time or to answer questions about his involvement in the scheme. After last Thursday night's broadcast, Mr Freed, president and CEO of My Net Universe and Andrew Cauten, president of My Net International, said they believed that Prime Time had decided "to do its best to damage our reputation".
In a statement they said the broadcast was a matter of "short-term concern" but that the companies were determined to "conduct business in full compliance with local laws and standards" and if there was any investigation they would "fully co-operate" with it. However, it was the emphasis on recruiting new people into the scheme that worried me most. Under new legislation brought in in 2007, a pyramid promotional scheme is one whose compensation is derived primarily from the introduction of others into the scheme as opposed to the supply or consumption of a product. I asked barrister and UCD lecturer in commercial law Brian Hutchinson what he thought of it. "On the face of it, I think there is enough there certainly for a prosecution to be initiated. And I think it's important to stress that -- that alone creates a worry at an Irish level for those who would be involved in this scheme. "Particularly those who might be sucked into this, who let's recall, also face the danger of prosecution at the same level as those in the higher echelons, even those outside of the state," he said. I am forwarding on my findings to John Shine of the National Consumer Agency, who featured on the Prime Time programme. Sunday Independent