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<<HISTORY FOR THE
WAR >> <<
HISTORY OF EASY MONEY SCHEMES >> v
In 1719 John Law’s “Mississippi Bubble” scheme
in v
Like wise in 1899 William Franklin
Miller’s Franklin Syndicate. (a.k.a “520% Miller”). v
Ponzi organized the
securities Exchange company in Boston in 1919 and issued promissory notes
payable in 90 days with 50 % interest,
he kicked off a storm of investment frenzy which duped just about everyone,
including politicians, law enforcement officers and reporters. He tricked speculators by using the money
of new investors to pay old investors huge “profits”. v
Later came chain
letters, beginning with the “send-a-dime” letter widely appearing in Denver
in 1935, which bore the heading “Property Club” and the slogan “In God We
Trust” this led to the $1 chain letter in Omaha, chain letter agencies or
“factories and the “Circle of Gold” which spread from California throughout
the country in the late 1970’s-all of which used the postal system. Many of
these chain letters went underground because of aggressive enforcement of
federal mail fraud statutes. Still other variations such as chart and
airplane games emerged later. v
“Chain selling” or
“Chain distribution” systems, the basis of multi-level marketing, was an
eventual offshoot from chain letters.
With chain selling, the selling of products was made through multiple
levels of distributors, each of whom received some type of compensation for
the sales of those recruited at lower levels, or one’s “downline”. v
A participant paid a
fee and became a distributor, entitling him to sell the cosmetic products,
but more important, entitling him to sell other distributorships. v
Those transactions were
essentially the same as in the chain letter, or the airplane or chart games,
in that the new participant paid one fee to the party who brought him in
another to the party at the top, and then assumed a position at the bottom of
the pyramid. v
Over five years, Turner
“parlayed $ 10,000 … into a conglomerate that generated a cash flow of $200
million, and in which as many as 100,000 people may have invested…. Two main
business organizations were developed to carry out his activities: Koscot
(‘Kosmetics company of Tomorrow’) Interplanetary, Inc., the sales arm, and
Dare to be Great, Inc., the training body”.
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