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JewishJournal.com

April 9, 2009

Mini-Madoffs get big boost on YouTube

http://www.jewishjournal.com/blog/item/mini-madoffs_get_big_boost_on_youtube_20090409/

About 23,000 videos promoting cash-gifting that have popped up on YouTube. The Better Business Bureau says these programs are akin to Ponzi schemes. Here’s today’s story from the LA Times:

The videos usually don’t ask for money directly but send viewers to websites where they are urged to sign up for the “gifting program,” usually for fees ranging from $150 to $5,000.

Ponzi scams, also known as pyramid schemes, depend on getting an ever-larger number of people to invest with promises that all will reap the rewards. It was the same mechanism used by disgraced financier Bernard Madoff, except his fraud totaled $65 billion.

One of the videos added today on YouTube featured Bible quotes, pictures of stacks of money and a testimonial from a man who said he not only got rich from cash gifting, he also found true happiness and lost 35 pounds.

Some of the videos claim that because it’s “gifting,” it’s somehow legal.

“They talk about ‘cash leveraging,’ whatever that means, and other vague marketing talk,” Southwick said. But the basic scheme is that participants are told to recruit more people who will put in more money, and so on.

“It’s just money changing hands,” she said, “and it always goes to people at the top of the pyramid.”

The BBB doesn’t identify specific videos, but in the above clip, Rob Abrams sells you on how he made $35,000 in a week. All you got to do is get other people to send you money for their enrollment.

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