They say that life writes the most incredible scenarios. This is often true. For example, you would never have guessed what incredible stories are associated with some financial pyramids from the past. The imagination of the creators of some schemes simply knows no boundaries. Today we present you with the 5 most shocking financial pyramids. You may have heard about some of them, but surely some of them will be a big surprise for you. Ranking MLM today covers this topic because according to MLM opinions it is crucial in the multi-level marketing and network marketing world.
5 most shocking financial pyramids in history
What is a financial pyramid
According to the Federal Trade Commission financial pyramids scheme in MLM are scams. “They can look remarkably like legitimate MLM business opportunities, but if you become a distributor for a pyramid scheme, it can cost you and your recruits – often your family and friends – substantial time and money.
The promoters of a pyramid scheme may try to recruit you with pitches about what you’ll earn. They may say you can change your life – quit your job and even get rich – by selling the company’s products. That’s a lie. Your income would be based mostly on how many people you recruit, not how much product you sell. Pyramid schemes are set up to encourage recruitment to keep a constant stream of new distributors – and their money – flowing into the business. (…)
Eventually, most distributors find that no matter how hard they work, they can’t sell enough inventory or recruit enough people to make money. They also can’t keep up with required fees or the inventory purchases they need to make to qualify for rewards, and they can’t earn enough money to cover their expenses. In the end, most people run out of money, have to quit, and lose everything they invested.”
Why do people pay money to financial pyramids
As we described in our previous article on this topic you can diagnose several factors why people pay money to financial pyramids:
1. The desire for profit. We want to get rich and we will do everything to do it quickly. We believe that this is possible and we are able to “invest” the last money. There is only one regret – earning so little.
2. Lemming-like rush. “After all, a friend invested and earned. All I have to do is do the same”.
3. A loss of opportunity. We are afraid that we will miss another great opportunity. We like the risk.
4. Encouraging others to recover money yourself. Nobody gives money for free. Although they sometimes tell us so. The system is simple: “find a few… and earn money. ” People succumb to our persuasion and join the system.
5. We believe in miracles. Adults must believe in something. It used to be Santa Claus – now it may be that money comes from nothing.
5 most shocking financial pyramids in history
As we have already mentioned, life writes the most incredible scenarios. The ones you won’t see in any movie. Below we present you with the 5 most shocking financial pyramids in history:
1. Metabolife
A man named Michael Ellis founded a dietery supplemet company in the 1990s called Metabolife. Ellis was a very interesting man, especially in the context of doing business, because he was a former police officer sentenced to prison for producing and selling methamphetamine… Metabolife’s best-selling product, an ephedra-based supplement called Metabolife 356, generated hundreds of millions of dollars in annual sales and abviously Michael Ellis very quickly became a very very rich man. So how a sentenced person becomes quickly a millionaire?
The secret is was shocking. One of the main ingredients used in the Metabolife pills was called “ephefra”, which is highly addictive. So yes, the product helped loose weight, but also yes – you can imagine the cost. It made people dopers…
The company went bankrupt and was forced to shut down in 2005. Some time before that the company and its owner were both convicted of… income tax evasion.
2. WakeUpNow
Acording to Wikipedia, WakeUpNow was a multi-level marketing scheme based in Provo, Utah, that sold products and services focused on health and financial management. It was founded in 2009 by Troy Muhlestein.
The “funny” thing about WakeUpNow was that for a long time nobody was really sure what exactly the company were offering and selling. Reporters from This American Life went to one of their conferences, and every single person gave a different answer as to what the company sold… Furthermore, it appeared that some of the products offered by joining its program were available for free or lower cost elsewhere on the Internet.
About 95% of distributors in WakeUpNow failed to make a profit in the program in 2013. The company ceased operations in the United States on February 16, 2015.
5 most shocking financial pyramids in history
3. OneCoin
“Are you having fun? Are you having a great time?” Asks the host of thousands of people gathered at Wembley Stadium. They are clearly full of excitement and animation. They came here for one person and soon she will appear on stage. It is June 2016. Charismatic, called the “female Mark Zuckerberg” and “queen of cryptocurrencies” Dr. Ruja Ignatova is playing in the flashes of light and intoxicates quickly gained wealth. The OneCoin cryptocurrency created by her appears to the world as a revolution in the field of technology and finance and is attracting more and more users. The fun is going on…
However, a year later Dr Ruja Ignatova disappears without a trace. The OneCoin exchange is suddenly closed, and the FBI and the US Department of Justice launch an international investigation against it and other scam participants. The media reveal that investors have entrusted the OneCoin and OneLife Network companies together with 4.5 billion euros. Now they cannot get back the money and no one seems to want to have fun anymore.
It seems that the trick has been played so many times that it has no right to go again, but the system of control of public institutions and self-control of ordinary human greed fails again. Stunning events, conferences, charisma and personality of the project’s face have once again misled people.
If you want to read more about the story of OneCoin scam, we covered this topic in a separate article.
4. Skyline
Skyline’s history is primarily a story of charisma, because charisma and being insolent are certainly two things that cannot be denied regarding the spiritus movens of this project.
It all happened in 1990s in Poland. The founder of Skyline, Mariusz K., liked to make and impression on others. During the meetings with hearty refreshments in rented restaurants and wedding halls, potential victims were tempted by the vision of gigantic earnings. The whole thing was to invest 2 thousand German marks and find more people willing to enter the project. The profits came from the contributions of the newly recruited participants. It was a simple but very efficient mechanism.
Almost 40k people trusted the company and lost their money, however the most tragic thing happened to its leader. He was murdered in unexplained circumstances…
5. Koscot Interplanetary Inc.
The history of Koscot Interplanetary Inc. dates back to the 1960s and is an interesting journey into the past, as well as an example that, despite the passing of the years, human naivety and the desire for easy profit continue to push people to make stupid mistakes.
The modus operandi was the following: the company encouraged people to sign uop to be “Beauty Advisors” and to sell its products door-to-door, and at parties and demonstration. For the distributors it cost $2,000 to earn the title of “supervisor, and they had to purchase a minimum of $5,400 in Koscot cometic products.
The company was shut down in the 1970s, after becoming entangled in numerous legal difficulties. Before that, its owner Glenn W. Turner appeared on the cover of Life Magazine…
Of course, these are not all shocking financial pyramids in history. We will write about further shocking cases in our next articles!
Editorial staff
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