Jeremy Johnson: iWorks Founder Arrested

iworks jeremy johnson arrested

After Jeremy Johnson's arrest, who will be next?

iWorks Jeremy Johnson Arrested

As noted by Salty Droid in “Jeremy Johnson Arrested for Jeremy Johnsoning,” the iWorks founder was arrested for mail fraud. You can get the details from that post but it’s clear the arrest was triggered by Jeremy Johnson’s decision to burn through assets that the government wanted seized for ultimate distribution to his victims.

What I’d like to point out is that the government is limited in resources for cracking down on Internet con artists. This means the Federal Trade Commission (FTC), U.S. Internal Revenue Service (IRS), and other government agencies typically go after the big fish to make examples. At that level, the best Internet lawyer or criminal defense attorney isn’t going to be of much help because the stakes are too high.

I’d contend that’s a mistake to focus solely on the big fish like Jeremy Johnson when cracking down on Internet fraud.

Although the big fish pull in headlines, the small-time con artist, or even a coordinated group of two-bit Internet con artists, should be fair game even if the press releases don’t get the attention of the New York Slimes.

Jeremy Johnson and Broken Windows Theory

Like broken windows theory, cracking down on the small-time online fraud creates a deterrent effect for a future Jeremy Johnson.

As things stand now, some Internet marketing gurus selling frauducts and flopportunities believe they’re invincible because they’re not as successful as a Jeremy Johnson or a Kevin Trudeau at what they do. If some of their cult followers started getting busted for Internet fraud, word would go viral online about the arrests and that feeling of invincibility would disappear.

On the bright side, when the government is through gobbling the big fish like Jeremy Johnson at iWorks, it will move down the food chain to the smaller fish who are committing online fraud. Until then, there’s going to be a trail of victims duped by false promises and fake testimonials like those provided by iWorks’ Jeremy Johnson, and even coordinated scams by certains gourous d’Internet dans les syndicats français.

Jeremy Johnson related posts prior to his arrest…

 

 

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Is your Facebook friend wagging the dog?

Internet Attorney Social Media Fraud

Social Media Fraud By The Government?

When I was a young Internet attorney, there was a movie called “Wag the Dog.”

As you can see in the trailer below, in the movie, actor Robert De Niro’s character manipulates the public for the U.S. President by creating a fake war using film footage shot by a Hollywood producer.

The media reports the “war” as if it actually exists, spinning public opinion to support the President. Yet another blurring of the line between art and reality.

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The U.S. government is now apparently about to wag the social media dog in real life.

Here’s how it works…

A government contractor will provide the servers in exchange for almost 3 million bucks. And up to 50 members of the military will each create 10 or so fake (sock puppet) identities to use to manipulate social media conversations for a pro-U.S. slant on things like the “War on Terrorism.”

Who decides what the socket puppets say or who they impersonate? If you’re harmed by interacting with one of these fake identities, chances are your Internet attorney won’t be able to do a thing for you because the government has sovereign immunity.

And where’s the firewall between psychological warfare against jihadists, for example, and using the same sock puppets to astro-turf fake public support for a political cause or even a candidate for election?

This is dangerous territory for any government to dabble in…and more risky if you tried to do the same thing. If you set up sock puppets to manipulate and deceive people online, you could be arrested or sued because of it. Before even considering wagging the social media dog for fun or profit, talk it over with your Internet attorney first.

And be cautious when a Facebook “friend” or a tweet makes a claim about something important to you. Verify before you act.

To your online success!

-Mike the Internet Attorney

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10 Internet marketers sued for fraud

Internet lawyer fraudIn my recent blog post describing the 7 online business trends to watch for in 2011, I noted as an Internet Lawyer that there are three federal government agencies (FCC, FDA & FTC) that would be cracking down on the Internet.

Yesterday, it got more interesting. The U.S. Federal Trade Commission (FTC) filed a suit against 10 people, 10 corporations, and 51 shell companies for their website business practices. If you want an example of how to not run your online business, read the complaint in this lawsuit. Here’s a link to the 81-page Internet lawsuit complaint.

Here are the 10 individuals named as defendants:

1. Jeremy Johnson

2. Duane Fielding

3. Andy Johnson

4. Loyd Johnston

5. Scott Leavitt

6. Scott Muir

7. Bryce Payne

8. Kevin Pilon

9. Ryan Riddle

10. Terrason Spinks

Here’s a list of the 10 corporate defendants:

1. I Works Inc.

2. Anthon Holdings Corp.

3. Cloud Nine Marketing Inc.

4. CPA Upsell Inc.

5. Elite Debit Inc.

6. Employee Plus Inc.

7. Internet Economy Inc.

8. Market Funding Solutions Inc.

9. Network Agenda LLC

10. Success Marketing Inc.

Here’s the names of the 51 shell companies named as defendants:

1. Big Bucks Pro Inc.

2. Blue Net Progress Inc.

3. Blue Streak Processing Inc.

4. Bolt Marketing Inc.

5. Bottom Dollar Inc. doing business as BadCustomer.com

6. Bumble Marketing Inc.

7. Business First Inc.

8. Business Loan Success Inc.

9. Cold Bay Media Inc.

10. Costnet Discounts Inc.

11. CS Processing Inc.

12. Cutting Edge Processing Inc.

13. Diamond J. Media Inc.

14. Ebusiness First Inc.

15. Ebusiness Success Inc.

16. Ecom Success Inc.

17. Excess Net Success Inc.

18. Fiscal Fidelity Inc.

19. Fitness Processing Inc.

20. Funding Search Success Inc.

21. Funding Success Inc.

22. GG Processing Inc.

23. GGL Rewards Inc.

24. Highlight Marketing Inc.

25. Hooper Processing Inc.

26. Internet Business Source Inc.

27. Internet Fitness Inc.

28. Jet Processing Inc.

29. JRB Media Inc.

30. Lifestyles For Fitness Inc.

31. Mist Marketing Inc.

32. Money Harvest Inc.

33. Monroe Processing Inc.

34. Net Business Success Inc.

35. Net Commerce Inc.

36. Net Discounts Inc.

37. Net Fit Trends Inc.

38. Optimum Assistance Inc.

39. Power Processing Inc.

40. Premier Performance Inc.

41. Pro Internet Services Inc.

42. Razor Processing Inc.

43. Rebate Deals Inc.

44. Revive Marketing Inc.

45. Simcor Marketing Inc.

46. Summit Processing Inc.

47. The Net Success Inc.

48. Tranfirst Inc.

49. Tran Voyage Inc.

50. Unlimited Processing Inc.

51. Xcel Processing Inc.

The websites tended to focus on getting government grants, health claims, and “make money” products. As your Internet lawyer can tell you, these are high-risk areas in which to do business online because they receive extra scrutiny by consumer protection agencies.

What’s clear from the lawsuit is the FTC is not going to tolerate deceptive continuity billing practices, including “free trial” offers that aren’t, unauthorized charges, etc. The FTC claims that fake articles and review sites were used to promote the memberships.

If just 10% of the allegations made by the FTC are true, these guys really crossed the line to a place no website owner should go.

How can you avoid the same fate with your online business? First, clear what you’re doing with your Internet lawyer before posting something questionable on your website.

Whether you’re running a membership site or not, you’ll want to clearly disclose pricing and all other key terms of your offers and have an easy-to-follow returns/refund policy.

If you’re running a membership site, you’ll want to have a membership site agreement in place that describes in plain English the key terms of what your members get when they join. This type of agreement also protects what you own. Your Internet lawyer can draft one that meets your needs.

To your online success!

-Mike the Internet lawyer

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