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internet marketing gurus

Website owner going to jail

By Internet Lawyer

One of the owners of a poker website is going to jail for the crime of deceiving banks who were processing gambling revenues. As I explained in my book (http://InternetLawsBook.com), gambling is one of those dangerous areas online until the government figures out who it is going to license and tax to run Internet casinos.
What about website legal documents? Can you use Terms & Conditions, etc. to keep the government from coming after your website?
The right website legal documents CAN reduce your civil liability exposure, i.e. take away most of your risks of getting sued in civil court for what you have on your website. However, if you’re doing something the government thinks is criminal (e.g. selling fake cancer cures), your website’s legal documents aren’t going to do much to protect you.
Speaking of fake cancer cures, there’s a criminal who pled guilty a few years ago to selling fake medicines to sick people online. Instead of going to jail, he’s now one of those “get rich” Internet marketing gurus.
You have to wonder about government priorities that sends someone to prison for handling consensual Internet gambling transactions between adults while letting a con artist get away with selling fake meds and online flopportunities.

Jeremy Johnson: iWorks Founder Arrested

By Internet Lawyer
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…

 

 

Internet Attorney: Saying FU to the Judge

By Internet Lawyer

Imagine you got in trouble with the law but were given probation if you went through counseling.

Would you take advantage of the counseling as a second chance or ditch it because you’re smarter than the judge who cut you
some slack? Lindsay Lohan made the second choice, then showed up in court with “f**k u” painted on her middle finger of a hand that she
kept pointing at the judge.

The payoff? 90 days in jail for the supertramp. You don’t have to be an Internet attorney to understand how stupid that choice was.

However, Internet marketing gurus you know are doing the same thing right now to the government. Their websites are promising health and wealth if you just buy their products.

What you’re not seeing is behind-the-scenes scurrying as lawsuits get filed, merchant accounts get canceled, etc. They flipped the finger and now some are paying the consequences. When you tick off enough government agencies or angry clients, there isn’t much an Internet attorney can do to protect you after-the-fact.

You know what the right thing is to do. You know what makes you sleep easy at night with peace of mind. Do it.

To your long-term success,

-Mike the Internet attorney

P.S. To help protect yourself, pick up a copy of my complimentary special report “Seven Deadly Legal Mistakes Made by Business Owners and How You Can Avoid Them.” (PDF file)

Internet Scams Of the Week: Going Public

By Internet Lawyer

Some Internet marketing gurus are trying to defraud you by taking their online businesses public. Here’s how these type of Internet scams work. The gurus will roll up several different online businesses together. Because they’ve got large e-mail lists to mail to and cult followings, there’s a built-in market of prospective buyers. After all, if you bought Get Rich 2.0 from Ima Guru, you might also buy stock in Mr. Guru’s company as it goes public.

The scam is just a variation of what’s happened offline for years. In fact, that’s why there are securities laws requiring certain disclosures be made when offering stock for sale to the public. In the old days, you could have a family-owned home-based business sell unprofitable widgets at craft shows, give their company a “modern” big-sounding name, and sell stock to the public in the company without disclosing that the business wasn’t worth a bucket of warm spit.

As time went by, penny stock scam artists figured out that you could artificially inflate the stock of a public company without any real value, find some suckers to invest in it based upon lies and misrepresentations, sell shares at the inflated price to these suckers, and then walk away as the company imploded when reality set in. Just a couple years ago, a famous motivational speaker was up to his neck in launching one of these ventures. Even if the speaking guru didn’t know what was happening, suckers bought at 50 cents per share because of his name. But within a couple of years, the company traded as low as a penny per share, and last time I checked, public trading in the stock had been suspended.

Before the 2000 dot com bust, online companies did essentially the same thing except they disclosed in a prospectus to potential investors that they were burning cash like a Viagra addict in a brothel without any hope of making a profit. The message was: ‘buy our stock because we’re high-tech but understand we’ll probably go bankrupt because our business model is fundamentally flawed.’

The latest batch of Internet scam artists are priming their e-mail lists about all of the great things to come when an initial public offering (IPO) takes place. Their followers are supposed to rush out and buy the stock based upon the inflated earnings claims that gurus have made about their businesses a private companies. Here’s how it will work. Assuming they try to put legal lipstock on this pig, they’ll make available a prospectus that discloses in eye-straining legalese that the company going public is high risk and is unlikely to produce a positive return on investment. On the other hand, their pre-IPO (pre-launch) formula will be to sell the stock as a fantastic Internet biz opp. Not only will investors get rich, they’ll become co-owners of Ima Guru’s business as shareholders (the bonus carrot). This will be piked in pre-launch e-mails, teleseminars, webinars, and probably a few live seminars to boot. The same call centers used by guru to sell coaching programs and boot camps will be turned into pump-and-dump “boiler room” centers to sell you the stock by phone.

Understand this…if it sounds to good to be true, it probably is. Don’t become the victim of an Internet Bernard Madoff. Perform your due diligence before believing any of the representations made by an Internet marketer trying to take his company public…whether by himself or rolled up with his buddy gurus’ businesses too. Read the fine print in the prospectus, check out the guru’s background, the company’s audited financials, and consult with an unbiased experienced financial advisor before taking a leap of faith.

If someone tries to con you this way, tell your local consumer protection office about it. Even though you didn’t fall for the con, there might be someone else who will become a victim unless the government steps in to shut down the scam.

Four Hot Internet Marketing Law Issues to Watch Out For in 2008

By Internet Lawyer

Based on what we’ve seen the U.S. Federal Trade Commission (FTC) do in recent years, here’s a few things you should be wary of while marketing your business on the Internet.

1. Increased anti-spam enforcement. The one-hit wonders in the info marketing crowd are starting to panic because price points have dropped. Packages that sold for $1500 bucks are lucky to get one-third that amount a year later. Seminar attendance has dropped and the primary attendees are newbies. Pitches are made to these new marketers with the view that there’s one born every minute and hoping the newbie will burnout (like most do) before discovering the get-rich-quick package was a bunch of junk. What does this have to do with spam e-mail? Desperate marketers are intentionally violating the CAN-SPAM Act in order to support a sinking ship. Even reputable marketers are reverting to single opt-in lists instead of double (verified/conbusinessed) opt-ins because conversion rates are lower with the latter. Some of the worst CAN-SPAM violators are buying launch lists from other marketers, importing the names, and then sending e-mails telling people not to forget about a special bonus for the launch that never was actually part of the launch. These are unsolicited commercial e-mails, i.e. spam. The FTC and/or a few state attorneys general will likely make an example of these spammers. Don’t let it be you.

2. Liability for your affiliatesmisconduct. Federal and state law enforcement officials routinely hold network marketing (MLM) companies responsible for the misrepresentations made by their commissioned sales associates. If you’re marketing a business opportunity or health-related product on the Internet, look for the government to take a harsher view at what is said on behalf of your product by your affiliates. This includes unsubstantiated income and health claims as well as fake, unsubstantiated or secretly compensated testimonials. In most instances, you as the product creator will have the deep pocket to tap instead of the broke affiliate who misrepresented your product, i.e you’ll be a bigger target.

3. Increased Website content ripoffs. When you can download an entire website and have all of its content re-written, including front e-books and autoresponder sequences, for less than a thousand dollars, look for more people to rip off your sites and do so without legal consequences. While there are ways to take down sites hosted in the U.S., Canada, etc. for infringement, enforcement actions become a big problem when a site is hosted in Asia or Eastern Europe. Internet marketing gurus in the late 1990s were telling everyone to find a successful site and rip it off. When your $97 info product starts selling on a cloned site abroad for $5, that advice is going to hit home in a big way.

4. Taxes and Personal Asset Protection. This issue has the potential to be the number one problem facing Internet marketers in the coming years — it will cost more than one millionaire marketer his entire fortune and some possible time in prison for tax fraud too. What most Internet marketers think they know about this issue is absolutely wrong (because they’ve been sold a pack of lies and half-truths by asset protection charlatans). I’ll be releasing a special report to clients on this issue soon. It won’t be for sale. You’ll have to get it through a client of mine.