We return today (and somewhat belatedly) to Utah, aka The Beehive State, which, apart from its reputation for bee-ing a honey producer, is also a busily buzzing hive of scammish boiler-room businesses -- some of the most insidious, efficient, and ruthless machines ever created for parting people from their money. Apropos of the latter, I have previously described Utah as the land of bilk and money, but I am painfully aware that my lame little stab at cleverness hardly does justice to what is really going on out there. My blogging colleague Salty Droid has been much more direct than I over the past couple of years and, holding his nose but keeping his eyes open, he has dug deeply into what he described in a recent blog post as "Utah's rotting fraud vortex."
In the opening salvo of his June 8 post, The Prosper Chronicles 451, Salty manages not only to pay passing tribute to the late great Ray Bradbury, but also to make another direct hit at Utah and one of its most notorious boiler- room operations, Prosper Inc.
Something wicked this way comes :: let’s be blunt … it’s Utah. You’d think they’d be extra not wicked :: what with even their underwear wearing codified and regulated :: but no … they’re totally wicked. Utah is the heart of darkness ...
Well, in the interest of accuracy, not everyone in Utah wears codified underwear. Only just a lot of Mormons, and for that matter, not only Utah Mormons. It's possible that even presumptive Republican presidential nominee Mitt Romney wears "the garments." Not that I want to think of Romney in any kind of underwear. Not that I want to think of Romney much at all.
But I digress.
I've made no secret of the fact that Salty Droid is kind of one of my heroes because he has boldly gone where few bloggers have gone before. Salty's Prosper Chronicles post is particularly significant because he slams the not-not-evil Google for the insidious ways in which Google enables Prosper and other scammy boiler rooms and their "strategic partners" to continue flimflamming the unsuspecting. Google accomplishes this through their AdSense program, which the little fake robot describes as...
... a dirty f---ing trick :: and one that Google has run on f--king millions of vulnerable Americans during a horrible time for us … and a f---ing sweet ass profitable time for them. Yes that sentence has three f---ks :: but I mean … come on!
For the Google commentary alone Salty's post is well worth reading.*
As of early last month, another one of my journo heroes is Joseph L. Flatley at The Verge, whose May 10 piece, "Scamworld: 'Get rich quick' schemes mutate into an online monster' caused quite a ripple in the online world. If you have not yet read it I urge you to do so. Or go back and read it again. I'll wait.
On June 8, Joe Flatley came out with another piece, "Mitt Romney goes to Scamworld: Prosper, Inc. and its powerful friends." This newer piece is a continuation of the same theme, with a few additional features and benefits, one of which was that it pays loving tribute to one of this blog's favorite snargets, Joe "Mr. Fire" Vitale. But its real focus is Prosper, which, as it happens, is the company that currently handles Joe's Miracles Coaching program.
Who is this man (and his heroes)?
Joe Vitale, as many of you no doubt recall, is one of the "stars" of The Secret, and among his many other accomplishments he is also The Buddha of the Internet, due to his rare combination of spiritual and marketing acumen. At least that's what his marketing material says. One of the things that this rare combination has delivered unto Mr. Fire is the knowledge that spiritual figures such as Buddha and Jesus want us to be rich. Or at least Joe V has figured out that convincing people that Buddha and Jesus want them to be rich -- and that he, Mr. Fire, has the secret to helping them do so -- is a way to get him richer. In one 2009 blog post tantalizingly titled Buddha's Money-Making Secret, Joe praised a book called The Diamond Cutter by Geshe Michael Roach, which, he wrote, mirrored Joe's own views about the Buddha's teachings on wealth.
Roach, as you may or may not be aware, was recently in the news for a grisly death associated with an extreme retreat he was leading. Unlike James Arthur "Death" Ray's infamous Spiritual Warrior retreat, this one did not involve a phony sweat lodge, but another type of trendy indigenous -- or trendigenous, if you will (I LOVE making up words) -- structure, a yurt. This snippet in the piece tells you pretty much all you need to know about Roach's brand of Buddhism:
The monk who ran the retreat, Michael Roach, had previously run a diamond business worth tens of millions of dollars and was now promoting Buddhist principles as a path to financial prosperity, raising eyebrows from more traditional Buddhists.
But Roach's teachings apparently didn't raise Joe Vitale's eyebrows, at least not in the you've got-to-be-sh-tting-me way alluded to above. Joe does not claim to be a Buddhist himself (he's more of a Transcendentalist, he says), and in fact in his blog post about Buddha's Money Making Secret, he confesses that he is not Buddha either. But he does apparently believe that Buddha would approve of his apparent obsession with material wealth.
But I digress again. The misappropriation of Buddhist teachings is not what Joe Flatley was targeting in his piece. Rather, he wrote about Joe Vitale's Miracles Coaching program, for which, as noted above, Joe V. partners with the aforementioned Utah boiler room Prosper. You will probably not be surprised to learn that I thoroughly enjoyed the piece.
Granted, Joe F. is more than a little snarky (my kind of guy!), basing his snarkasm upon some of the things Joe V. has most proudly promoted. Apparently he did not interview Joe V., which Joe V. may very well jump on as an example of poor journalism, as he did when Barbara Ehrenreich snarked him out in her book, Bright-Sided: How Positive Thinking is Undermining America. Joe V was not pleased about his write-up in that book. But I am thinking that the point of Joe Flatley's piece wasn't really to present an in-depth portrait of Mr. Fire (any more than it was Ehrenreich's purpose); rather, it was merely to give some perspective of Mr. Fire's role in what Salty Droid has often called "the big, sick machine." In any case, I suspect that when the article came out there was some heavy drinking in Wimberley, Texas that night.
Politix, schmolitix
Joe Flatley's article isn't just about Joe Vitale and Miracles Coaching. It also touches on a couple of Prosper's other "gurus," and tells the story of a former boiler-room salesman who says he worked at Prosper. Then the piece gets into dodgy Utah politicians, such as Utah's Attorney General Mark Shurtleff, who has accepted many thousands of dollars of campaign donations over the years from Prosper and other Utah boiler rooms. Flatley mentions another matter that Salty had previously written about -- that of Utah's Chief Deputy Attorney General, John Swallow, who is running for AG and has vowed to change things so that the AG's office will have control over Utah Consumer Protection. Talk about a case of the fox guarding the henhouse....
Mitt Romney is arguably the pièce de résistance of the article, as Flatley wraps up with the mention of a fundraiser held in Utah for Romney on June 8 -- a fundraiser hosted and promoted by boiler-room and MLM (Multi-Level Marketing) heavyweights. All told, there's not a whole lot about Romney in Flatley's article, but there's more than enough smoke, in my opinion, to indicate that there's a real fire (as opposed to a Mr. Fire).
Nevertheless Joe F. got some flak for his article because some people thought the headline, which Joe himself apparently did not write, was misleading. Others criticized him because they thought he was insinuating that only Republican politicos are dirty. Here's how Joe addressed that on the discussion on Salty's Prosper Chronicles blog post:
...Sure, I characterized the people behind Romney’s Super PAC money as “super-rich supervillians.” Because they are. And because it has a nice ring to it. (One of the benefits of being a senior editor at The Verge is I get to indulge in wordplay from time to time.)
Do I have to even mention that neither the Republicans or Democrats have the exclusive on political corruption? Because I will if I have to, but I thought that was so patently obvious that to make a big deal out of it would be to insult the intelligence of my readers.
The obnoxious commenters at The Verge (who are a statistically insignificant number — something like .02% of our readership) perceive me as saying things that I did not say. Based on the fact that Mitt Romney’s name is in the headline. They’re ignoring the real problem, which is that these boiler rooms rip people off — and that they’re allowed to get away with it. Who allows them to get away with it? Exactly.
Someone on the same discussion reminded us that if anything, Joe Flatley understated the scammer-Romney connection. That person cited this article from the May/June 2012 issue of Mother Jones. The MJ piece emphasizes the Utah connection with MLMs such as Nu Skin. "By all appearances," the Salty participant wrote, "without [Romney's] personal intervention, Nu Skin wouldn't have been allowed to become an Olympic sponsor."
The MJ article attempts to explain why Utah is such a ripe garden for MLM schemes:
Utahns have a joke about multilevel-marketing companies: MLM really stands for "Mormons Losing Money." The notion of selling to one's friends and neighbors is so intertwined with the culture that the final season of HBO's Big Love featured an MLM subplot. According to the Salt Lake Tribune, Utah has the highest concentration of such companies in the country.
There's a reason why MLMs, many of which peddle natural health products like Nu Skin's dietary supplements, have thrived there. Mormon scripture encourages the use of herbs as God's medicine, and the faith has a strong tradition of turning to alternative medicine. Its founder, Joseph Smith, reportedly shunned traditional doctors, believing a physician had killed his brother. The tight-knit Latter-day Saints community, and the trusting nature of its adherents, have made Utah a lucrative terrain for multilevel marketers. Mormons, who typically spend two years serving as missionaries, are also natural recruits for companies that need salespeople with a high tolerance for rejection. And finally, MLM firms often pitch themselves to women as a way to stay home with their kids while still earning substantial incomes.
You get the drift.
But let's get back to Prosper...
As I've noted, Salty Droid has written about Prosper's misdeeds on numerous occasions, and both he and Joe Flatley cited articles such as this one from Salt Lake City's "alternative" weekly newspaper, City Weekly, and this one from the Salt Lake City Tribune. If you haven't read the articles already, you should. Then go wash the slime off of your hands and come back to get re-slimed.
The knowledge of boiler-room shenanigans, and Prosper's shenanigans in particular, goes back for years. In the past Salty has also cited information such as that in this 2009 piece from City Weekly:
Prosper Inc., located in Provo, gained some notoriety on Feb. 28, 2008, when The Salt Lake Tribune reported that former employee Chad Hudgens had sued his former supervisor for using a method of torture on him that dates back to the Spanish Inquisition as part of a company exercise. The tactic induces psychological trauma by convincing the body it is drowning. Hudgens alleged his boss waterboarded him, explaining to watching employees that they should put the same amount of struggle into making sales as Hudgen’s body did as it struggled for air. Prosper, which markets business coaching to customers in areas such as real estate, investing and Web commerce also donated $15,000 to Shurtleff in 2008. Despite repeated attempts to contact representatives of Prosper, City Weekly was unable to obtain comments about an administrative citation issued against them by the Utah Division of Consumer Protection in 2007 for deceptive trade practices.
That is really just the tip of the slime pile, as you'll see if you read the article, which details more Prosper misdeeds from the early 2000s. If I were running a coaching program, I don't think I would want a company with Prosper's abusive record to handle it. However, to the best of my recollection, Mr. Fire began partnering with Prosper for Miracles Coaching in early 2009 -- quite some time after Prosper's problems had become public knowledge. Did he not do his homework about Prosper, or was their sales pitch just too sweet to resist? Word has it that his then-Director of Sales and Marketing (and now ex-Kevin Trudeau/GIN employee), Peter Wink, had something to do with pushing Joe into Prosper. If that's the case... nice work, Peter Wink!
Another story Joe Flatley tells in his Verge piece about Miracles Coaching and Prosper is that of Jonathan Timar, a friend of this blog who, in 2010, wrote on his blog about his own experiences with the Miracles Coaching hard sell. (Fortunately, Jonathan did not take the bait.) I've mentioned Jonathan here and on other forums before, and have linked to his article numerous times. I am glad Joe Flatley included Jonathan's experience in his piece too, because it accurately illustrates the boiler-room M.O.
In May of 2011 Jonathan finally confronted Joe Vitale about this matter on the latter's blog. I've also previously mentioned this on my Whirled, but it seems only proper to mention it again. Jonathan told Joe about the troubling experiences he'd had with Miracles Coaching. The dialogue begins here. Joe pleaded ignorance to any wrongdoing on the part of the sales team, but he did apologize to Jonathan for any negative experiences Jonathan had had.
I’m sorry for whatever the sales team said to you. The program has been around more than four years but I switched sales a while back. I believe all is fine now but again, I apologize.
Joe was correct about having "switched sales." Previously his Miracles Coaching cash machine had been handled by a Texas company called Northstar Ventures, about whom there had been numerous complaints, and not just regarding Miracles Coaching.
But, as I noted above, apparently Joe didn't do his homework when looking for a company to switch to. Or maybe he did do his homework (or let Peter Wink do it for him), and the potential bottom line looked so attractive that he was willing to overlook Prosper's little problems.
In any case, this is what Joe told Jonathan after doing some "research" about what Prosper was doing (you have to wonder why he didn't bother to educate himself about their methods before signing up with them):
Dear Jonathan, I appreciate your input regarding my Miracles Coaching program and how it is being sold. I did research so I could answer you.
We do have a two-step process that qualifies individuals for our program and then explains the different options that are available to them. My program isn’t for everybody and unless a person is willing to put in the time, effort and frankly the money, they won’t get the results they are looking for. Our interview process has been set up to determine if a person is serious. As you know, unless you are really committed to something, you won’t make the changes that are required in order to make a difference in your life. Our intent is to help individuals clear their blocks and limiting beliefs so they become what they really want to become. Thousands of people have found tremendous success in our Miracles Coaching Program and have ranked us an average of 4.3 out of 5 in whether the program has made a difference in their life.
I apologize if you felt you were being “high pressured” into our program. We often find it to be a fine line between encouraging people to make a change that they need to in their life and being “too pushy”. I hope you can understand.
Oh, yes, Joe, we understand. And thanks to the efforts of people such as Salty Droid and Joe Flatley, we now understand even better.
PS ~ I wasn't the only one who enjoyed Joe Flatley's Prosper article. My old pal at the Pyre, who had been away from his blog for months, popped back in with a post about it as well.
PPS (27 June 2012): More about Utah's hive of corruption and scum from another sharp journo, Eric Peterson at Salt Lake City's alternative newspaper, City Weekly.
- http://www.cityweekly.net/utah/article-77-16068-dialing-for-dollars.html?current_page=all
- http://www.cityweekly.net/utah/article-77-16096-phone-predators.html?current_page=all
* Yes, I participate in Google AdSense myself, and I blog on a platform owned by Google. My friends have been telling me for ages that I need to transfer my Whirled over to Wordpress, and perhaps I will. I've had the placeholder set up for years. As for the ads, I signed up for the free default version of AdSense a couple of years ago, which is why you often see ads on my blog for the very things I snark about. FYI, though, I've made a grand total of less than $105.00 since I've been with the program. I am but a minuscule part of the big sick machine, but even that is prolly too much. Mea culpa.
2015 UPDATE: I no longer participate in Google AdSense. I never made more than a couple of hundred bucks in the several years in which I participated in the program (which as noted above was was the free default version), so I canceled.
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