Amazon Termination Follow-Up; They ARE CHECKING:(

31 replies
After Amazon terminated all their California affiliates, several threads appeared on Warrior recommending solutions. The simplest was to update your Amazon address with a mailbox address in a non-terminated state like Oregon or Nevada, and one particular poster insisted Amazon would never make you prove it.

So I got an Oregon mailbox, my partner got one in Nevada, we updated our accounts, and sure enough, Amazon reinstated us in 24 hours. All was well for about a month, but now both he & I, and several other California marketers, are getting an email from Amazon asking for proof - utility bill, rent bill, driver license, etc. Damn!

Anyway, many of us who tried the mailbox solution are back to finding another solution or losing their Amazon income. Opening a new account through a relative who lives in a non-terminated state seems to be the #1 choice (if you have a relative who trusts you to pony up their tax increase come April 15th) and using a 3rd-party linker like Skimlinks or Viglinks is #2. Others have mentioned simply sending Amazon a Photoshopped utility bill with your name and mailbox address, claiming they'll never check it or corroborate with the utility...easy for anyone good w/Photoshop, but I wonder if they will check, and what the penalty would be for emailing them a false bill.

Other suggestions/solutions, anybody?
#amazon #checking #followup #termination
  • Profile picture of the author SteveJohnson
    The most obvious solution would be to incorporate in a non-affected state and start a new account in the corporation's name.

    I think that solution was mentioned quite a number of times.
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    • Profile picture of the author myob
      The California tax boys were on to this scheme from the beginning. As always, it is never advisable to base such core decisions on information from non-professionals. Seek competent legal advice for how to proceed if you wish to continue legally as an Amazon affiliate. This was warned against countless times, but for some reason the rampant uninformed kept persisting. Remember this is a marketing forum, not a legal advisory.
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    • Profile picture of the author Seth Stewart
      Originally Posted by SteveJohnson View Post

      The most obvious solution would be to incorporate in a non-affected state and start a new account in the corporation's name.

      I think that solution was mentioned quite a number of times.
      Thanks Steve, that solution was indeed mentioned and I am aware of it. Just a lot more hassle & expense, so no harm in asking if anyone came up with any new approaches.

      I while I agree with myob that this is not a legal forum, and it's dicey to rely on the advice of uninformed non-professionals, occasionally non-legal-expert but experienced Warrior marketers have reported a work-around that actually worked quite well with no legal after-effects.
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  • Profile picture of the author Christi
    Yes, Amazon and most other companies who decided to terminate their affiliate contracts with California-based affiliates would want to see proof that you have physically moved to another state. Simply updating your address is not going to fly. First, anyone can do it. Second, they could get in trouble by people's misrepresentation and they'd never do that.

    There is a ballot initiated by the Performance Marketing Association that has the support of Amazon. The ballot needs about 500,000 signatures from CA registered voters for the law to go to a referendum in CA. The ultimate purpose is to overturn the law if the referendum outcome dictates that. If it goes to a referendum, the law will be held off for about a year until the referendum takes place. If the referendum outcome is for the law to get repealed, well...that is self-explanatory and we win .
    If you are in touch with other affiliate marketers in CA please spread the word.

    What you have to do is the following:
    -Visit this website and fill out your details: getbackinbusiness.org
    -Within about a week or so they will send you the ballots in the mail. Each ballot allows for up to 3 signatures, so if you have more than 3 people who are willing to sign the petition, be sure to order more than one ballots
    -Once you receive the ballots in the mail, fill out your details and sign and try to get other people to sign as well (anyone can sign as long as they are a registered CA voter)
    - Follow the instructions to make sure that your ballot vote will be valid and will count
    - Put the ballot(s) back in the prepaid envelope that they will have sent you, and throw it back into your mailbox

    Simple huh?
    I know they are going around in food stores and fairs trying to recruit people to sign. But the more the signatures the better - nobody knows how many signatures they've managed to collect so far (well, at least 6 from my ballots ).

    Now as for your actual question, I'd suggest being a little patient because as you read above there is a good chance that the law may be held off for the next several months if the amount of signatures needed is reached, and if we're lucky, it may even get repealed.
    Emailing a fake bill - it may fly or it may not. But if it doesn't and Amazon finds out, they could theoretically ban you for good from being their affiliate and may not allow you to re-apply in the future. Nobody knows for sure but their trust in you as an affiliate would have taken a blow. I for one wouldn't risk it.
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  • Profile picture of the author SteveJohnson
    or you could just move to Nevada.
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    • Profile picture of the author Terri Tutten
      I've always wondered - if you live in a state that is banned for Amazon Affiliates and they've paid you commissions, if you would have to repay those commissions. At any rate, I agree that you should seek legal advice on whether you can be an affiliate if you have a corporation or LLC in an allowed state.

      Terri
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      • Profile picture of the author Christi
        Originally Posted by Terri Tutten View Post

        I've always wondered - if you live in a state that is banned for Amazon Affiliates and they've paid you commissions, if you would have to repay those commissions. At any rate, I agree that you should seek legal advice on whether you can be an affiliate if you have a corporation or LLC in an allowed state.

        Terri
        No, they pay you all commissions earned up until the day when the termination becomes effective and then they stop giving you credit for any sales you refer (which is why they usually advise you to take all affiliate links down).
        You don't have to repay anything from what you earned while you were still an affiliate.
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    • Profile picture of the author kindsvater
      Originally Posted by SteveJohnson View Post

      or you could just move to Nevada.
      Nevada has a sales tax. Might be better to move to a state without a sales tax so you don't have to worry about moving again.

      .
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      • Profile picture of the author SteveJohnson
        Originally Posted by kindsvater View Post

        Nevada has a sales tax. Might be better to move to a state without a sales tax so you don't have to worry about moving again.

        .
        And they have Harry Reid.

        Good point.
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  • Profile picture of the author kindsvater
    Originally Posted by Seth Stewart View Post

    Others have mentioned simply sending Amazon a Photoshopped utility bill with your name and mailbox address, claiming they'll never check it or corroborate with the utility...easy for anyone good w/Photoshop, but I wonder if they will check, and what the penalty would be for emailing them a false bill.
    Not that I recommend sending fake information, but how do you think they would corroborate with a utility? Do you think a utility is going to give out customer information? One name on a bill is hardly everyone living at an address in any event. A utility has no idea who resides on a property.

    Regarding Warrior threads, there were plenty of threads long BEFORE the axe fell about changing an address.

    For the life of me, as this issue was pressed in the California legislature for 2 years, then a Democratic Governor was elected after Schwarzenegger termed out, and one could see what was happening in other states like Colorado, I cannot understand why anyone was waiting to be canned before taking action.

    As Steve said, there is an obvious solution.

    .
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  • Profile picture of the author myob
    Originally Posted by Seth Stewart View Post

    I wonder if they will check, and what the penalty would be for emailing them a false bill.
    When the California State Board of Equalization finds out, they will send you a real bill. To your real address.
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    • Profile picture of the author Seth Stewart
      Originally Posted by myob View Post

      When the California State Board of Equalization finds out, they will send you a real bill. To your real address.
      I don't mind getting a bill from CA State BofE, because I was planning to pay my California & Federal taxes as usual. I'm not sure how CA would find out anyway, as Amazon will now be sending my 1099 to my Oregon address, with an Oregon home address listed for business, so I don't see where a copy will be going to the CA BOE.
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      • Profile picture of the author ShayB
        Originally Posted by Seth Stewart View Post

        I don't mind getting a bill from CA State BofE, because I was planning to pay my California & Federal taxes as usual. I'm not sure how CA would find out anyway, as Amazon will now be sending my 1099 to my Oregon address, with an Oregon home address listed for business, so I don't see where a copy will be going to the CA BOE.


        Messing around with taxes and such like this sounds like a very, very bad idea.
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      • Profile picture of the author myob
        Originally Posted by Seth Stewart View Post

        I don't mind getting a bill from CA State BofE
        You are NOT going to like the bill that the California tax boys will send you. This is considered fraud to avoid paying taxes (nexus), and you would also be in violation of a number of other state and federal agencies including Homeland Security. Read again and again and again and again the third paragraph of post#3.
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        • Profile picture of the author Seth Stewart
          Originally Posted by myob View Post

          You are NOT going to like the bill that the California tax boys will send you. This is considered fraud to avoid paying taxes (nexus), and you would also be in violation of a number of other state and federal agencies including Homeland Security. Read again and again and again and again the third paragraph of post#3.
          Sorry, myob, but post #3 is from you, and it only has one paragraph, Which part did you want me to read again and again and again...
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          • Profile picture of the author myob
            I meant sentence 3.

            As a point of interest, I have an LLC through Delaware, and it cost nearly $2,000 to set up with attorney fees, etc about 9 months ago. Also there is an annual fee of $800 payable to the California State Board of Equalization, in addition to lots of paperwork. This fee is the same no matter where you may incorporate. Unless you had been doing well with Amazon, perhaps consider other affiliate options such as mentioned in this and other threads ie Skimlinks, Walmart, Target, Sears, Barnes & Noble, Clickbank etc.
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            • Profile picture of the author PatrickP
              Originally Posted by myob View Post

              I meant sentence 3.

              As a point of interest, I have an LLC through Delaware, and it cost nearly $2,000 to set up with attorney fees, etc about 9 months ago. Also there is an annual fee of $800 payable to the California State Board of Equalization, in addition to lots of paperwork. This fee is the same no matter where you may incorporate. Unless you had been doing well with Amazon, perhaps consider other affiliate options such as mentioned in this and other threads ie Skimlinks, Walmart, Target, Sears, Barnes & Noble, Clickbank etc.
              You can get one from FL online for around $99


              sunbiz .org
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    • Profile picture of the author kindsvater
      Originally Posted by myob View Post

      When the California State Board of Equalization finds out, they will send you a real bill. To your real address.
      Send it back.

      Include a note referring to this law:

      http://www.warriorforum.com/main-int...urchasers.html

      And let the state know that since the use tax will be collected from California residents it would be a double payment to pay the sales tax.

      .
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  • Profile picture of the author timpears
    Open up an account with Skimlinks. I did this but then never used it. But as I was told, they are based in the UK, and because of their high volume with Amazon, they get a higher commission. So even after taking out their cut, you should end up with more money through them.
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  • Profile picture of the author CDarklock
    Originally Posted by Seth Stewart View Post

    After Amazon terminated all their California affiliates, several threads appeared on Warrior recommending solutions. The simplest was to...
    ...just lie, because it's not like that would be illegal or anything.

    OH WAIT
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  • Profile picture of the author Seth Stewart
    Hey myob, the non-professional who advised me to skip the whole LLC thing, responded with his take on your warnings of big tax problems. I thought I'd post what he said here (minus his name) because he makes some good points. I'm not sure I agree with everything he says, or what you have said, but the contrast in views is so striking I be interested to see if you, or Darklock or Steve see any sense in what he's saying:

    "Here's the thing - a lot of people run scared and assume the worst.

    Amazon will send a 1099 to your Oregon address and you will have to pay Oregon taxes on that income.

    If you make any wages in California (because you have a JOB), then you will have to pay California taxes on that.

    If you don't have a JOB in California, then you can act as if you actually live in Oregon and are visiting California.

    The states don't share information on who got 1099's. They only give it to the IRS. And the IRS does not pass that information on to other states because it would be illegal.

    By the way, lying is not illegal if there is no intent to defraud. There's nothing wrong with not disclosing everything about your life. You are not obligated to give everything away about yourself."

    He also cites full time RVers who deal with this all the time.

    For what it's worth, this individual claims to have worked in the legal field for years and written a book on this subject, so he says he's an expert.
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    • Profile picture of the author JohnMcCabe
      Seth, I only saw one glaring problem with your friend's reasoning...

      By the way, lying is not illegal if there is no intent to defraud.
      What part of opening a mailbox in Oregon, while you still live in California, in order to participate in an affiliate program you would not otherwise be eligible for falls under "no intent to defraud"?

      Seems like the entire purpose is to defraud Amazon into reopening an account that you wouldn't have without the lies.

      I'd check your buddy's credentials before I took this advice. Unless, of course, he wants to put up a bond to protect you if his advice is bad...
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      • Profile picture of the author Christi
        Originally Posted by JohnMcCabe View Post

        Seth, I only saw one glaring problem with your friend's reasoning...



        What part of opening a mailbox in Oregon, while you still live in California, in order to participate in an affiliate program you would not otherwise be eligible for falls under "no intent to defraud"?

        Seems like the entire purpose is to defraud Amazon into reopening an account that you wouldn't have without the lies.

        I'd check your buddy's credentials before I took this advice. Unless, of course, he wants to put up a bond to protect you if his advice is bad...
        EXACTLY what I was thinking!! Bravo!!
        It's blatant material misrepresentation towards Amazon (and the state of California) plus forging a document that is not real. A series of pretty serious legal violations here.

        You seem to be asking for trouble my friend. But if you don't think this is a problem, then we can't help much.
        I hope your wise friend is able to help you get out of trouble once you get in.
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    • Profile picture of the author myob
      There's just a teeny tiny 'nother little problem. How do you get your money, since you don't "live" in California? They can't mail it regularly without arousing suspicion. You can't withdraw/deposit in any California bank, nor will you be able to make non-cash purchases. One slip-up and the California tax boys will be on you like a wild, crazy and hungry bear. These guys really are watching out for such schemes. But, go ahead if you insist.
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  • Profile picture of the author Christi
    Oh, and something else:
    Would Amazon check everything? Of course they would, because if they don't and make even one mistake, they may find themselves liable of paying a state millions in sales taxes.
    If you were facing the dilemma of paying millions in sales taxes versus checking every little detail very thoroughly, what would YOU do?
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    • Profile picture of the author Seth Stewart
      I want to thank everyone for their input here, I respect everyone's wisdom. I have chosen not to pursue the phony bill submission, and will be speaking with my accountant tomorrow about the best LLC or S-corp options.

      I make some coin with Amazon, but not quite enough to justify the corporate path if it's gonna cost me upwards of $3K the first year, so I may have to try Skimlinks or Viglinks for awhile till my Amazon income warrants bigger expenses. Skimlinks probably won't work because some of my Amazon sites are "thin" sites with spun content, and I hear they scrutinize each website for originality before they approve. I don't know if Viglinks is less finicky.

      I also have relatives in a non-nexus state that might be willing to open an account for me in their name, as long as I pay the taxes AND, if I make a "killing", the tax bracket difference if they get forced into a higher one.

      Meantime, I'll let go of the "fraudulent" methods. Opening an LLC in another state is just as big a lie about where you really do business as opening an absentee mailbox and sending a phony bill - it's just that because the big money boys have institutionalized corporations, one method is "totally acceptable" and the other is fraud...go figure:rolleyes:

      Meantime, I'll reprint my "friends" last reply to John McCabe's point, for your edification & entertainment:

      "I have to disagree with that person's reasoning. There is no fraud. Amazon doesn't lose anything by doing this. In fact, they gain - they get targeted buyers who are more likely to buy because of your site.

      And Oregon gains because you file a tax return on the money you make in that state.

      And California also gains because you stay in the state and spend money.

      There is no fraud here.

      If you want, you could "move" to Oregon, get a drivers license and all that stuff, move into an RV and then park it wherever you want. Just because you're currently parking it in California, doesn't mean you are a resident of California.

      The same applies to renting an aparment or house. Just because you might be currently renting in California doesn't make you a resident of California if you don't want to be.

      You're living below the radar. But that's not fraud, even if you're less than truthful about your circumstances."

      Thanks again
      Seth
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  • Profile picture of the author pcpupil
    I live in AZ and we have what we call snowbirds come to our state every year for the winter months.And i am not cutting down snowbirds,they bring a very large boost to our winter months.We love them.
    And actually,the out of state plates get far less hassle.
    These people live in the northern states,Canada,etc...
    Now this what they do,
    They have a bank account in there home state.There SS check,SSI check,Retirement,etc,goes into that account.
    They have a home address.A home telephone number.

    Then they come here.They either rent an RV spot,rent a home,or buy a vacation home.
    They only use there debit or credit card.From there main bank.
    Where the deposits are made.
    Since they are not a resident,because they do not have a job here,they can keep there state driver license,accounts,etc.
    All they do is forward there mail to a PO box,or the park where there RV spot is.
    All there taxes,etc are completed in there home state.

    Now,if you get caught doing business,in that state,you would be in trouble.
    So,hire a VA,in your home state,family,whatever,and run it with your supervision.Keep 2 laptops,one to be given for evidence if needed,with just Facebook,emails,etc.Nothing incriminating.and a second one that you have been conducting business with.
    How do you think the big boys get away with it? Have you ever heard about truck drivers carrying 2 logbooks.They are the ones who make money.
    Az state law says that you are not a resident until you start working.And nothing you do here gets sent to your home state.
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    • Profile picture of the author JohnMcCabe
      Seth, I don't think I want to deal with your buddy. He's doing a Clintonian parsing of words. Here's a definition of fraud (the bold emphasis is mine):

      Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Fraud may also be made by an omission or purposeful failure to state material facts, which nondisclosure makes other statements misleading.
      Source: Fraud Law & Legal Definition

      And while Amazon may not suffer damage from sales you make under the fraudulent account, they stand to suffer millions of dollars in tax liability should a case similar to yours blow up their claim of no nexus.

      If some people want to play in the shadowy areas, that's up to them. Just remember, when the FBI couldn't nail Al Capone, the IRS did. And that's the last thing I intend to say on the subject.
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      • Profile picture of the author marciayudkin
        I also have relatives in a non-nexus state that might be willing to open an account for me in their name, as long as I pay the taxes AND, if I make a "killing", the tax bracket difference if they get forced into a higher one.
        And what will you do if they get audited? What if they die and "your" earnings become part of their estate? What if you just have a big argument with them and they decide to retaliate against you?

        There are a lot of possible unintended consequences here.

        Once you get started down the path of crime (and make no mistake, some of the options recommended in this thread are unequivocably criminal), things can get very complicated.

        Marcia Yudkin
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        • Profile picture of the author Centurian
          The fact of the matter is an LLC or a Corporation is a legal entity. Once created the corp. is considered the same as a "person." Therefore, whatever state the entity legally exists in, that is it's "residence."

          You don't need to spend thousands on a corp. I've created a number of LLC's and corporations in Delaware and Maryland for pennies on the dollar. You can simply google incorporation services in Delaware and Nevada.

          Some of these companies provide "residence" services within the state. i.e. they house/host your company in their building with address, phone, even receptionist. I've seen these services for $250 month. There are even cheaper options.

          A very good option is to consider Wyoming. There are several companies that provide a complete corporate package, attorney, residence, etc. for $2,500 to $5,000. There are less expensive options too.

          You can buy an "off the shelf" corporation in Wyoming that has been in existence for several years for what you would pay an attorney to create one. Many already have Federal ID's and have been conducting business transactions. You often can get good paydex scores to get commercial credit cards that have nothing to do with your personal credit.

          Google "shelf corporations" to check this out. I just saw some for $750 in Nevada. Using them for securing credit has nothing to do with what you need though. Don't get distracted with this. As someone who carried two million in business loans, I don't want anymore myself.

          What you want to focus on is an entity that will provide "active residence" in another state. The host company will serve as your resident agent. Then find out who will charge the least amount of money per month to host your office in that state.

          It doesn't even have to be an older shelf corporation. You can create a new entity for just a couple of hundred. An older corporation will provide you with more credibility as you appear less of a start-up and have longevity. And since you are not a start-up, but have been in business for some time, this better reflects the nature of your ongoing enterprise.

          I would compare Wyoming and Nevada on this. I personally prefer LLC's to corps. because there are less paperwork requirements. They give you the benefits of inc., but more adapted to small enterprises and Schedule C options.

          Remember, corporations are a legal creation of the state to enable businesses to operate outside of the confines of the individual owner's limitations and liabilities. Corporations are created and moved to different states and countries all the time to legally avoid taxation and oppressive regulation.
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  • Profile picture of the author Patrick Pretty
    Senate bill reintroduced (this month). It has some bipartisan support -- and the USDOJ and attorney general want it to pass. "The Incorporation Transparency and Law Enforcement Assistance Act."

    http://levin.senate.gov/download/inc...assistance-act

    Lots of IMers recently have expressed lots of anger on the WF about what they view as increasing impediments to doing business online. My reading of the situation -- and I study it closely -- is that the Wild West days are coming to a close.

    One of the reasons the government wants to erect barriers to entry is that the criminal element within IM has demonstrated an undeniable capacity to steal money by the tens of millions of dollars and to form-shift when cracks through which they exploit the financial system begin to close. Like nature, crime always finds a way.

    I have seen recent cases in which:

    1.) Utah Internet Marketer's firm and associates allegedly opened 51 shell companies to keep a hidden-continuity billing scheme intact after it caused a phenomenal number of chargebacks and gathered $275 million. Marketer with offshore presence arrested at U.S. airport.

    2.) A South American pyramid schemer whose scam gathered hundreds of millions of dollars started laundering cash through his company for a Colombian drug cartel. Overall scam featured "hundreds" of bogus companies. DEA fetched him out of Colombia and jailed him in New York. DEA later fetched his purported legal adviser out of Colombia and jailed her in New York. Multiple people jailed over scheme. Pyramid scheme created 400,000 victims. An estimated 12 people died in riots after scheme was exposed. Combined take could be as high as $1 billion.

    3.) Internet Marketer in Florida with history of establishing shell companies and then abandoning them allegedly started Ponzi scheme with shell companies both onshore and offshore. Allegedly was caught with about $40 million in uncashed cashier's checks when scheme was exposed. Company associated with self-described "sovereign citizens." Alleged scammer now seeking to raise funds for his criminal defense by sending out daily email "blasts" to the people he is accused of defrauding. Facebook site reportedly in the offing.

    4.) Guy in Oregon set up "numerous" shell companies and funneled $172 million to at least 50 countries through murky, unlicensed money-transmitting business.

    5.) Woman in Texas who ran daycare center and IM business allegedly ran $60 million through her unlicensed money-transmitting business. Woman allegedly known by four different names. Feds seized building that housed day-care center. Alleged proceeds of international financial scheme.

    6.) Missouri-based Internet Marketer opened purported nonprofit religious entity in Oregon through which she allegedly laundered her Ponzi scheme cash.

    7. "Sovereign citizen" in Washington state who purports to be attorney and advertised himself as one online -- photo and all, while having no law degree -- sued United States for $27 TRILLION. Individual has tie to IM company. Judge not amused. Tossed case. Same man once arrested for flying airplane without pilot's license. Later bizarrely declared himself "Postmaster." Purports to be specialist in "admiralty law." Purported specialty is establishing shell companies. Allegedly caused at least two notaries to lose their licenses for affixing their seals to crackpot documents.

    Lots of crackpots and criminals are making things hard on IMers these days.

    Patrick
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