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What are autosurfers? Autosurfers are e.commerce network marketing companies that recruit members to surf the Internet daily, visiting specific websites in order to create the illusion that the websites they visit have far more interested viewers than they actually have. The website owners who use autosurfers are trying to attract major advertisers—and major advertising dollars—to their websites. For that reason, they are willing to pay autosurfers big bucks to inflate the number of hits to their websites that suggest that thousands more interested shoppers are visiting them than there actually are. Autosurfers generate millions of fictitious page views daily that don't really exist since the member surfer hits the assigned pages, and a second or two later, is visiting another site.

The network marketing groupies that join the autosurf web scams are led to believe autosurfing is a no-fault bonanza that lets everyone win. Isn't America great? Of course, America is great, but not everyone wins. Every time you have a winner, you also have a loser. Websites that hire autosurfers to ratchet up either the unique visits to their sites, or artificially inflate the number of page views to make it appear to potential paying advertisers that thousands of people who are not even remotely interested in that website are reading it in their 30-second visit. While autosurf websites may be legal, they aren't ethical. They are engaged in a legal form of fraud that needs to be stopped because it defrauds advertisers who expect honest value for their advertising buck.

Why? Because hundreds of Internet entrepreneurs who don't generate enough page views to attract them hire autosurfers to drive up the page views so that their websites appear to get more visitors than they actually do. Viewers translate into potential customers for advertisers. Major advertisers will only place their paid advertising on heavily trafficked sites. Top sites like Yahoo, AOL, Google, MSN.com, eBay and MySpace.com attract most of the available revenue since they are among the top ten most viewed websites in the world. The Drudge Report, which is one of the most popular cybernews sites in the country, is the 273rd most active website in the world with slightly over 6 million hits a day. The New York Times, which ranks 50th, gets over 11 million hits per day. WorldNetDaily.com and Newsmax.com are tied at 1.9 million hits a day.

Just as newspaper, magazine radio and TV advertisers use circulation audits to determine how many subscribers, listens, or viewers those media have, Internet advertisers monitor web traffic through companies like Alexa.com, and base their cyberad buys on the number of visitors websites receive monthly. The demand for increased viewers translates into potential customers for advertisers. Everyone chasing advertising revenue is trying to figure out how to increase their page views. As unethical as they are, autosurfers fill a growing niche in the world of cybercommerce. They deliver the page views that don't really exist. But more important, they deliver the advertising dollars to those websites that should not exist.

It was the natural multilevel marketing venture. For multilevel marketers to attract a sufficient number of surfers, the promise of huge rewards must be available. One of the nation's first autosurfer was www.tymglobal.com. Autosurfers began to pop up on the cyber-radar screen in 2002. By 2005 there were only around 40 of them. Then, when cyber-entrepreneurs like Claris F. Johnson created a profitable multilevel marketing scheme to attract more aggressive networking marketing types, autosurfer sites began multiplying like rabbits. Today, according to Jim Polack of Autosurf Central, there are now close to 400 active programs. While the bulk of them realistically offer surfers anywhere from 1% to 4% to visit 100 or more assigned websites in order to drive up their page views, he estimated that half of the autosurfers are now within the "Ponzi" danger zone, offering 5% to 25% daily. As Polack noted on his website, its hard to find people who will seriously consider autosurfing as a career when they earn 4% or less—unless the autosurfer uses multilevel techniques like bonuses paid for attracting new members, or allowing the existing members to upgrade their own memberships to earn more per click through, or more from the recruiting done by those they recruit—precisely those things that the government construes as the elements of a Ponzi scheme—where the bulk of the autosurfer's income come from the recruiting and not the sale of a product or service.

Even more, the government construes the multilevel marketing venture to be a Ponzi when the revenue used to pay new member comes directly from the contributions from other members and not from the proceeds derived by the company from the sale of its services—revenue paid to the company by website owners attempting to create the illusion that they have far more page views than derived from people genuinely interested in their websites. Also included would be the advertising revenues 12dailyPro received from the sale of online ads sold to major advertisers on its own website—which Alexa statistics show to be the 346th most hit site in the world. (Of course, when you have 300 thousand surfers hitting it five to ten times a day you're adding 45 to 90 million unique visits to the website each month that really don't exist since the surfer doesn't read anything in the 30 seconds they spend on the site as they click on the next URL they are scheduled to visit.)

On their website, 12dailyPro insisted they were not a Ponzi, and most multilevel marketing people that found them—and the big paychecks—agreed. One 12dailyPro member told me in an email "...12DP is not a true ponzi. Only 20% of their revenue was from new members money. To be a true ponzi," she continued, "it must be 70% or more." In point of fact—according to their own website—95% of 12dailyPro's revenue stream came from new members. While the 12dailyPro website has been suspended and only the home page is visible on www.internetarchive.com, Johnson's anti-ponzi defense was that 12dailyPro was in business to increase the page views of its clients' websites and that the company generated revenues from those click-throughs and, also, from the sale of advertising on its own site.

Like most hot multilevel marketing ventures, autosurfing is fairly new. The "industry" appears to have begun around 2002. One of the first entrepreneurs into the "page view scam" was Tymglobal.com. Tymglobal.com is the parent company not only of StormPay, but also a new autosurfer website, StormClix. StormClix, like the first generation autosurfers, is a "pay-per-click" website. Tymglobal popped up on the Internet's master archive (www.internetarchive.com) for the first time on March 29, 2002. A couple months later, the company was offering cybersurfers a new laptop for $25 under a program called Laptop Matrix in exchange for autosurfing services.

Like most multilevel deals, those who got in when the program began, profited. Those who came in at the end, lost their money. The matrix programs, which were largely scams, made a low price offer as a come-on. But there was a catch: those signing off did not receive the low-price offer until a certain number—usually 10—others joined after him. Like all network marketing cons, those who join the multilevel pyramid early-on profit. Those who invest in the pyramid at the end of the brief life cycle of any multilevel scheme, lose most or all of their investment. Yet, in get-rich-America where the working class invests more on lottery tickets than in mutual funds, those attracted to get-rich-quick schemes believe getting burned once or twice is the price you pay for success. That's why regardless how many multilevel schemes are shut down by the government as ponzis, the same people who lost money on the last one will flock hungrily to the next one in search of the bonanza they know is waiting for them.

Claris Johnson launched 12dailyPro on May 13, 2005. By the time the SEC shut it down on Feb. 27, 2006, Randall Lee, the regional director of the SEC's Pacific coast branch, claimed that her companies, 12dailyPro and LifeClicks bilked 300 thousand "investors" out of more than $50 million—and funneled over $1.9 million of "investor" money into Johnson's personal bank account. The SEC claims that her cyberworld began to collapse around the first of February, 2006 when thousands of 12dailyPro multilevel marketing reps discovered that money deposited in their escrow accounts at StormPay (a credit card payment processor like PayPal) was sudden frozen. Johnson also discovered that all of her personal assets were frozen as well.

The SEC knew what was going to happen before it did because they used their power to freeze the assets of Johnson's companies. According to Lee, "...[p]aid autosurf programs have become an enormous industry on the Internet. When these schemes depend on attracting new members in order to pay returns to current members, they are destined to collapse. We urge the public...to exercise extreme caution before investing in any get rich scheme." In SEC Civil Action CV 06-0108 NM (PAx)(C.D. Cal), the government complaint reiterates "...To receive the promised payment, a member purportedly must view at least 12 web pages per day during a 12-day period. The amount of returns that 12dailyPro would pay its members, however, was not on the amount of website-viewing or any other services rendered...The defendants falsely represented that upgraded members' earnings are financed not only [by] incoming member fees, but also with multiple income streams including advertising and offsite investments. In fact, at least 95% of 12daily Pro's revenues have come from new investments in the form of membership fees from new or existing members. The other multiple income streams from advertising revenues or offsite investments touted by the defendants were either negligible or nonexistent. In addition, undisclosed to investors, Johnson transferred more than $1.9 million in investor funds to her personal bank account..."

There is absolutely no doubt that the program Claris Johnson created was a classic Ponzi scheme that violated Section 17[a] of the Securities Act of 1933 and Section 10[b] of the Securities Exchange Act of 1934. In fact, Johnson's scheme replicated Charles Ponzi's get rich scheme. Ponzi sold investors on the notion that he could increase their returns on the exchange rates on European postage stamps by as much as 50% in 45 days. Johnson promised her members a 45% increase in 30 days.

For one year, from 1919 to 1920, Carlos "Charles" Ponzi was the go-to man as the Roaring 20s brought prosperity to the growing American middle class. Ponzi promised a 50% return and, for almost a year, he delivered on his promise. On July 29, 1920, when the federal government shut him down, Ponzi was collecting over $250 thousand a day from investors who believed he was the goose that could lay golden eggs—or stamps. On July 24 as the Boston Post was doing a puff piece on Ponzi the genius, the postal Inspectors were quietly investigating Ponzi the con man. As the postman was delivering hundreds of checks to Ponzi's Security Exchange Company on July 29, US postal inspectors were preparing to seize the mail addressed to Ponzi's office. When they did, Ponzi's house of cards collapsed.

That's a common ploy for the government when they decide they want to shut down an industry. They seize the assets of the targeted person. The government does this for two reasons. First, by seizing every asset the person possesses, it becomes difficult for him to hire a lawyer because, suddenly, he lacks the means to pay for one. Second, bunko investigations by the SEC or the FBI against multilevel marketing ventures are usually not only without merit when they begin, but generally no criminal or civil violations or complaints have been filed against the person targeted by any of the "investors" until the government freezes the company's assets.

In every multilevel civil or criminal prosecution that the government has engaged in recently, they begin by freezing or seizing the assets of the targeted company as quickly as a friendly judge will let them. From handling many multilevel prosecutions, the government knows that when the "investors" or "members" of the multilevel program are deprived of their scheduled payouts, they will be more inclined to file civil or criminal complaints. Once an actual complaint is filed, the State or federal government can file civil or criminal charges and close down the multilevel operation.

In the case of Charlotte, North Carolina autosurf entrepreneur Claris Johnson, the friendly federal court that shut her company down was in California. This tactic is legal if at least one person who filed a complaint against 12dailyPro or its parent, LifeClicks, LLC, lived in California. This textbook tactic is also used by class action lawyers to find friendly county courts in which local judges with no legal authority outside their own county assume national jurisdiction they do not constitutionally possess, and make decisions that are binding on businesses not only in other counties, but other States as well. Furthermore, class action lawyers found that certain jurisdictions are more prone to award extravagant judgments in frivolous lawsuits that should never have been certified in the first place. In the case of 12dailyPro, it's very likely that when the jurisdiction for prosecution was sought, there were no actual complainants. The US postal inspectors very quietly began to investigate the autosurf industry, and specifically 12dailyPro long before Johnson discovered she was a target, and long before any of 12dailyPro members became disgruntled enough about the cash flow of Johnson's company to become a complainant.

Monthly payments to 12dailyPro's multilevel entrepreneurs went through credit card payment processor StormPay. When January's 12dailyPro disbursements were due, the amounts due each 12dailyPro recipient appeared on their StormPay statements, but the funds were unavailable. Around Feb 1, StormPay began freezing autosurf accounts—even those, according to published media reports, not under scrutiny by the SEC. StormPay's actions have thus far impacted at least 30 autosurf websites in spite of the fact that most of them are complying with the company's Terms of Service [TOS], and are not construed, by the SEC, to be in violation of federal or State securities laws.

StormPay issued the following statement to 12dailyPro account holders: "You are receiving this notice because of your recent involvement with 12dailyPro. The SEC has issued a standing order preventing chargebacks against those purchases/investments. Any customer requesting a chargeback or refund either through their credit card issuer or bank are in violation of the order. Specifically, users are prohibited from 'using self help (including, without limitation, initiating or processing chargebacks of any monies used to purchase or upgrade membership units in, or with, 12DP) or executing or issuing or causing the execution or issuance of any court attachment, subpoena, replevin, execution or other process for the purpose of impounding or taking possession of, or interfering, with. For a copy of the complete SEC order, visit: http://www.stormpay.com/SEC_v_Johnson_etal.pdf."

Because StormPay seized every autosurf account in its system, 12dailyPro members were, with good reason, convinced that StormPay had arbitrarily seized their money. In point of fact, StormPay was likely ordered to freeze the 12dailyPro accounts by the court order served on them by the SEC on March 1.

But, given the opportunity to do so—without legal authority to seize the assets of the competitors of 12dailyPro and LifeClicks or StormPay's own StormClixStormPay tossed the dice and froze its own system, claiming that a malfunction prevented their customers from accessing their StormPay accounts. Many of the assets frozen were from clients who were not involved in the autosurf business. When it denied service to its clients, StormPay issued a blanket statement in which it accused several of the autosurf websites of being ponzis, referencing Rule 17 of its own Terms of Service. Several autosurf sites complained that StormPay was refusing to release their money until they could prove they were not ponzis by proving the funds were "invested dollars" and fees from Peter that were being used to pay Paul.

Nightmarish messages shot back and forth on several autosurf blogs from angry StormPay account holders detailing frenzied reports that their personal accounts were being drained by StormPay with unauthorized chargebacks—effectively zeroing their balances. On HYIPForum.com as early as Feb. 6—three weeks before the SEC filed against 12dailyPro—account holders were complaining that StormPay was looting their accounts. "Why is StormPay punishing me?" asked one account holder from Etobicoke, Ontario. "I'm in Canada. I have had a StormPay account for years and just went there to check out my $3,000-plus account level. Got this message. WHAT IS GOING ON? My cable connection@rogers is the biggest provider in Canada.. " Shown below was the message he saw when he tried to access his StormPay account: "The IP address you are connecting from is banned from accessing StormPay.com. If you are using a proxy IP address, please contact us at StormPay.com through your normal Internet provider."

Replying to him, an account holder from the United Kingdom, shot back: "It's goin' crazy. I'm in the UK and they're asking for a security question." A woman who lists herself as an "expert investor" from "West, by God, Virginia," also responded to the Canadian. "I hope your $3K will be there when you get reconnected. Not to freak you out, but many members monies have just disappeared. My friend just had $2,500 taken. No one knows where it's at."

In a March 2 emal to this website, another 12dailyPro member said: "The FBI, BBB and DCA are investigating SP due to illegal tampering of member accounts (mine included). They tried to access my bank account without authorization. I had to block them. Many people with thousands of dollars in their SP accounts came to find it missing...gone. StormPay did try to take money from me, but I blocked them. And then SP suspended by account because I had the unmitigated gall to stop them from stealing money from me. They did this on a large scale. Check out the story about SP in the Leaf Chronicle in Clarksville, TN—where SP is based." The emailer continued: "My credit card company did refund my money. They told me specifically they had hundreds of complaints against SP trying to access cards without authorization. StormPay is the culprit. PayPal still takes autosurfers. They just have stringent rules about surfs proving where their money comes from."

The Leaf-Chronicle reported on Feb. 11, 2006—17 days before the SEC moved to freeze the assets of LifeClicks and 12dailyPro—that "...[a]uditors were busy at StormPay Friday." Mark Hicks, the Leaf-Chronicle reporter noted that the FBI had requested files from the Better Business Bureau of Middle Tennessee concerning complaints about StormPay. StormPay officials Steve Girsky and John McConnell admitted that they froze the accounts of some 30,000 to 35,000 12dailyPro accounts after receiving complaints from other members that money they earned from 12dailyPro was not being sent to them. StormPay said the last payouts received from 12dailyPro came on Jan. 8. While the comments made by Girsky and McConnell to the Leaf Chronicle implied the February payout, which should have been transferred to the pay processor in late January, was never received. Steven Carr, one of the attorneys representing Charis Johnson, said that he was negotiating with StormPay to release the money they froze, suggested that the February payout for 12dailyPro members had been received by StormPay before the end of January. Noell Tin, another Johnson lawyer, said StormPay is holding almost $50 million of 12dailyPro's money.

In another investigative article, the Leaf-Chronicle noted that StormPay had been reported to the Better Business Bureau 49 times for its failure to inform and follow-up with its customers when it suspends accounts, but more specifically, because it refused to release the funds of those accounts in a timely fashion. Consumer protection groups received 18,926 complaints and/or inquiries about the reliability of StormPay in one just week—between Feb. 1-7, 2006. Even if StormPay survives the collapse of 12dailyPro, its credibility will be eroded enough that PayPal and AlertPay will likely take most of its non-autosurf clients after the February freeze.

Anyway you look at it, even if StormPay and StormClix survive, there will be at least two major casualties—and perhaps 20 or 30 more—before the autosurf scandal ends with the bankruptcies of LifeClicks and 12dailyPro. When a queen falls, a king rises from the ashes. Even before the official collapse of Charis Johnson's 12dailyPro and LifeClicks, Michael Corcoran and Craig Garcia created its replacement—EasyDailyCash.com.

If its the intent of the SEC to use 12dailyPro to frighten would-be autosurf site operators, it won't happen. Not only is there a waiting list of entrepreneurs marking time to be the next 12dailyPro millionaire; there are 300 thousand multilevel marketing groupies standing in line for the big payout as the first tier members of the newest pyramid.

 

Just Say No
Copyright 2009 Jon Christian Ryter.
All rights reserved
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