Massive online Ponzi scheme 12DailyPro SHUTDOWN by FTC

NOTE: It would be interesting how the drama with Stormpay plays out.


http://news.yahoo.com/s/nm/20060228/wr_nm/sec_dc

WASHINGTON (Reuters) - U.S. regulators last week charged the owner of 12dailypro.com and her two companies with fraud for running a $50 million Ponzi scheme, according to a statement released on Monday.



The U.S. Securities and Exchange Commission alleged that Charis Johnson, 33, raised more than $50 million from more than 300,000 investors by convincing visitors to the Web site that they could earn a 44 percent return on their investments in 12 days by looking at Internet advertisements.

The scheme, which the SEC calls "paid auto-surf," required users to buy $6 "units" -- up to a maximum of 1,000 units -- and to view advertisements from what were described as paying advertisers.

While investors were led to believe that their returns would be generated by advertising revenue, payments were made almost entirely from cash generated by other unit buyers in a classic Ponzi scheme, the SEC alleged.

Johnson and her companies, 12daily Pro and LifeClicks LLC, agreed to settle the charges without admitting or denying guilt.

As part of the settlement, Johnson and her companies agreed to stop seeking further investors, to freeze assets and to accept a court appointed receiver over corporate assets.

The commission is also seeking the repayment of ill-gotten gains and further fines. The complaint alleged that Johnson transferred about $1.9 million to her own accounts.

According to Johnson's attorney, Noell Tin, a Clarksville, Tennessee, credit card payment processor called StormPay.com "is holding about $50 million of 12dailypro.com's money."

"That's where the money is to get folks repaid," Tin said, adding that "they (StormPay.com) are definitely going to be giving it to the receiver."

Follow the money

According to a February 7 Better Business Bureau of Middle Tennessee statement, however, StormPay.com "generated more complaints to the BBB than any other Middle Tennessee or Southern Kentucky business" in the first six weeks of 2006.

The consumer protection group said it sought the assistance of federal authorities after receiving 18,926 inquiries checking on the reliability of StormPay.com in the 7 days prior to February 7.

The majority of complaints filed with bureau were related to "auto-surfing" programs, the BBB statement said.

According to Tin, 12daily Pro and Johnson are completely independent of one another.

Calls to StormPay.com's headquarters were unanswered.

The SEC also declined to comment.

Asked if the $50 million he believes StormPay.com is holding is enough to cover investor losses, Tin said, "I don't know. What I do know is that there is a substantial sum of money sitting there."

As for the $1.9 million Johnson allegedly moved to her accounts, Tin says his client has already returned $1.4 million to 12dailypro.com members.

The SEC also released a general warning on paid auto-surf schemes on Monday at http://www.sec.gov/investor/pubs/autosurf.htm.

12dailypro.com was the 352nd most highly visited site on the Internet, according to the SEC

 

Guess *it Doesn't Pay to Be a Crook!*... Well maybe until you get caught... hehe

 

Always knew it..12dailypro can never maintain the model(?) ..

 

Yeah, and Stormpay used this stuff to take all the money to themselves, instead of returning it to the investors, they stole over $10K from me, I think no one uses them now..

 

any chances of you getting it back ?

 

nope
Look here: 2661 petitions against stormpay

 

Everything should come to an end... I wanted to play this 12dp game but at the last moment decided NOT to...

... But I know many peoples who are VERY rich by playing this game

Mahesh

 

We had one of those assholes promoting his crap here a while ago

http://forums.digitalpoint.com/showthread.php?t=53028

 

Yep. The 12dp was posted in tons of surfer and webmaster messageboards. The spam was almost as prevalent as those "click for game points" schemes that were all the rage 2 to 3 years ago. Man, those sucked!

 

My best friend and her husband were doing this... They read a book called "Rich Dad, Poor Dad" and moved out of their house (and into her parents' basement) so they could rent it out and get "passive income." I don't think her parents knew she was investing thousands of dollars in a Ponzi, yet not paying them rent. I tried to tell her 12DailyPro was a scam and made absolutely no fiscal sense, but she didn't believe me. Then she tried to recruit me to Amway! Well I guess they call it Quixtar or something now. Whatever.

 

Quixtar is not a ponzi, it is a well known network marketing program for tangible items, similar to pampered chef, tuperware, candle light, etc... Not for everyone, but at least there is a viable business model behind it

 

No you're right, I didn't mean to say it was a Ponzi, sorry if it came out that way. However, it is Amway. Whether it has a viable business model is debatable, but if it works for you than do it.

 

I do know they have a great business plan and management behind all the programs I mentioned. The issue most have is they think it is a "get rich quick" business venture and fail. Network marketing, like any business takes a lot of hard work, even at that many will fail. Some people are just not supposed to be in business.

Back to the task at hand... I just dont see how anyone would think a ponzi would work!

 

Is anyone really surprised about 12DailyPro?

And, for those of you fretting, do you think the officials are just going to let StormPay keep the 50 mill? Come on now.

Jim

 

Yeah, of course it was obvious that 12DP would collapse on day or another, I actually thought it should have happened back in November, but well I missed the date.

As for now there's no indication that Stormpay is not going to keep all this money.. Even if they won't be able to keep it to themselves, there's a very little chance that it will be returned to the stormpay users themselves..

 

Quixtar is very different from a ponzi scheme. It uses a pyramid shaped network selling system. It's not really a pyramid scheme since the whole system won't collapse if they can't find new guys in the bottom. They actually sell a whole series of products. Pyramid schemes = no real product.

 

That's considered massive? Now that FTC took care of the little guys, maybe they'll take on Social Security Administration and shut them down for running a Ponzi scheme. 2 of them actually, the other one being Medicare.

 

jo, where have I been , first time that I have heard of the whole 12DP scheme...

This is really some amazing schemes ... (thinking..)

"I need investors for my blog, $100 shares to buy" - no returns

 

There were returns thats why the program lasted for so long. The program wasnt exactly a scam as people were making money off it. It would bound to fall, but while it lasted many people made decent money of it if you put all the negative energy and the "I TOLD YOU SO" aside.

 

Of course not, but how long until they return it? I wouldn't mind having 50m sitting in my bank account for a month...the interest would have to be sweet...