A court in Munich, Germany has ruled that a witch must refund a fee paid by a client, for whom her “love spell” failed. The client paid about $1,275 for the witch to help win back her boyfriend, who left her in the fall of 2003.
The court ruled that the service offered by the witch was “objectively comletely impossible”. The witch said she never guaranteed success for her client, who carried out the witch’s ritual several times, each under a full moon.
Another week of fraud busting and exposing scams! Get your submissions in for next week’s Carnival of Fraud.
When I first became involved in Mary Kay Cosmetics, I had no intention of making it a career or anything close to it. I saw it merely as a way to make some extra money with a flexible schedule that was under my own control. I thought it would be fun to sell cosmetics and lead these “skin care classes” where women tried before they bought.
One of the things I find interesting about Mary Kay, however, is the effective way in which company representatives “indoctrinate” everyone into “Mary-Kay-think”. One of the most commonly promoted ways of thinking is “positive” only. One is not to speak of anything that doesn’t appear to be positive, and that includes FACTS about Mary Kay and the business opportunity.
If someone has been unable to sell products, that should not be mentioned during meetings. If someone observes that the success rate of Mary Kay consultants is low, that is not to be discussed either. When one’s spouse questions the “opportunity”, that is to be ignored as well.
You see, anyone who is not on the Mary Kay bandwagon probably doesn’t “get it” or is just a “negative person”. It is possible that Mary Kay recruiters Promote this kind of thinking, rather then critical thinking about the business venture, because it is much easier to control.
While I didn’t start my Mary Kay venture to create a new career, it was amazing how quickly the idea of making the “big” money and driving the pink Cadillac could appeal to an intelligent woman. As soon as I became involved with Mary Kay, my family and friends began saying that it was a pyramid scheme. They balked at the idea of being paid a commission on those I would recruit into the organization. The signs of a business scam were all there.
I followed the company line, however, and stated that it was only fair to be paid a commission in return for helping women build businesses of their own. I believed that people were fairly rewarded for the efforts that they put into the business, so I worked hard to build my Mary Kay clientele. What I didn’t realize at the time, was that a pyramid-based product scheme like Mary Kay does NOT necessarily reward you for effort. The vast, vast majority of participants will “fail” because of the multi-level marketing structure and the way it is set up.
Who would have thought it would be this easy to break into an ATM and run off with all the money?
CNN recetnly reported that a man was able to reprogram an ATM at a gas station, so that it would dispense $20 billions instead of $5 bills. Someone went to work to find out how he did it, and found that an operation manual for that specific type of ATM, a Tranax Mini-Bank 1500 Series, could be found legally in about 15 minutes.
The investigator who found the manual, Dave Goldsmith of Matasano Security, didn’t reveal exactly how he found the manual which had master passwords and security information about the ATM. However, a PDF file containing the same information was found with a simple Google search. The online manual was found freely available on the website of a Canadian reseller of the machines, and details the procedure to reprogram the machine, as well as change passwords.
Two of the three people accused of conspiring to steal trade secrets from Coca-Cola and sell them to rival Pepsi pleaded guilty on Monday to one federal charge of conspiracy. The attorney for the third accused conspirator, Joya Williams, says she will not plead guilty.
Ibrahim Dimson and Edmund Duhaney each face up to 10 years in prison and a $250,000 fine. They will be sentenced on January 29, 2007.
Joya Williams worked as an administrative assistant for Coke’s global brand director, and allegedly had access to samples of new products and confidential information regarding Coke’s trade secrets. Duhaney told a judge that she contacted him about the scheme, and he then contacted Dimson, who was to make a deal worth $1.5 million with Pepsi.
The scheme was exposed when Pepsi officials contacted Coca-Cola about the scam. A search of Duhaney’s home on July 5 turned up Coca-Cola product samples and confidential company documents. The three were indicted on July 11.
Today a federal judge sentenced former Enron executive Jeffrey Skilling to 24 years and 4 months in prison for his conviction on federal charges of conspiracy, fraud and insider trading. Skilling, 52, was also fined over $18 million for his crimes. He was denied bond while waiting to report to prison, and instead is on home confinement.
Tags: Enron, conspiracy, fraud, insider trading
Welcome to this week’s Carnival of Fraud. As always, we’re showcasing blog posts that discuss issues related to frauds, scams, and other shady dealings. If you’d like your post included in a future Carnival of Fraud, you can make your submission here.
See you next week!
An arbitrator ruled that Massachusetts Mutual Life Insurance Co. fired its chief executive officer, Robert J. O’Connell, without cause. MassMutual’s board of directors fired him last year after alleging that he improperly increased the value of a retirement account by tens of millions of dollars.
The arbitration panel ruled that MassMutual didn’t follow the dismissal rules that were in the employment agreement the company had with Mr. O’Connell. The panel further found that Robert O’Connell did not breach the fiduciary duty he owed the company. They ruled that the company owed Mr. O’Connell a lump sum of three times his base salary plus short-term incentive award, plus other benefits. The estimated value of the amount owed to Mr. O’Connell is $40 million to $50 million.
MassMutual is appealing this ruling, saying that it undermines corporate governance policies. The company says that any monetary award that might be paid to Mr. O’Connell will not have a material impact on its financial statements.
Who does your head of internal audit report to? If your company is like many, the chief internal auditor reports to the chief financial officer (CFO). That makes sense to some because they are both a part of the finance function. However, that’s not the best control a company could have.
It’s recommended that the head of internal audit report to the chief executive officer (CEO) and the audit committee.
Why? If the CFO is the boss of the chief internal auditor, how can the auditor be objective about the books and records for which the CFO is responsible? Audit committees, on the other hand, offer the internal auditor the opportunity to report findings objectively. Reporting to the CEO has its advantages as well. Such a structure communicates to the auditors that the audit function is a priority.
Eric Scheibeler was once a highly successful IBO (independent business owner) with Amway. He reached the “Founder’s Emerald” status, which represented the top 1/25th of 1% of the IBO’s. After developing his pyramid for almost ten years, Eric discovered documentation that revealed the fraud behind the company.
Eric thought the fraud was just at the Kingpin level of the organization, to which he had worked so hard to elevate himself. He reported his findings directly to Amway’s President, Dick Devos. Eric thought that DeVos would take action against the distributors who were defrauding so many below them.
What happened next was unbelievable. Fellow distributors turned on Eric, and he lost his entire income. His upline offered to buy his network and his silence for $75,000. He refused the offer and began an in-depth investigation that culminated in the writing of the book Merchants of Deception.
Thousands of hours of research went into the book, and Eric gathered documentation from around the world. The book became a roadmap for an FBI investigation, as well as a tool used by Dateline NBC for their expose’ on Amway. Merchants of Deception documents “… that Amway’s billionaire founder and senior management not only were aware of two decades of systematic fraud, but that they aided, abetted and financially rewarded the most egregious offenders.”
The book discusses the government corruption that Eric believes allowed the fraud to continue for years. It also details the actions taken again Eric and his family, from the legal battles to the intimidation and death threats. Who would have thought the exposing of a scam could lead to this? Yet it appears that so much money was on the line for so many, that they were willing to go to great lengths to silence Eric Scheibeler.
