Monday, October 02, 2006

SEC Shutting Down PAS Scam

SEC Shutting Down PAS Scam

The SEC (Securities and Exchange Commission) is finally shutting down yet another popular scam pyramid company, Prosperity Automated System or PAS. With over 25,000 websites are being shut down, the SEC complaint targets the network creator and owner William M. Osterhout of Citrus Heights, CA, in this downline building scam.

According to the SEC statement given on Wednesday, the system, billed as a marketing network, is "destined to collapse and leave the vast majority of investors with substantial losses." When visitors to one of the landing pages fill out the form, they are then contacted by high pressure telemarketers who work to sell them a downline-building membership for up to $3,895, promising to build them a huge downline that will give them a share of the fees from new members who sign up through their websites. (Can anyone spell PONZI?)

To be in profit with PAS, you need to make not one, not two, but three HUGE sales. Can you realistically sell three practically $4,000 packages?

Actually, this particular system is a newer twist on the original Ponzi scheme, commonly called an Aussie 2-up Pay Plan, (also known as in this case, a 1Up Plan) and it is quite illegal. (I have not yet come up with a reasonable explanation for the term other than that it seems to have originated in Australia.)

The way it works is this: while the system usually offers several different "products," their main focus is to get you to just sell the system to others. Initially, you have to pay a fairly large sum ($3895 in this case) for joining the system. The income from your first sale goes to the system sponsor. Furthermore, everyone who pays becomes a representative for the company, so there are basically no sales outside the pyramid. The system makes grand promises of huge returns with no (or very little) work. They promise that they will advertise for you, have a product for you, and even have people to close the sale for you.

An Aussie 2UP takes the first two salse from a person’s warm market and pushes the sales up to his or her sponsor. Since statistics show that most people can only recruit 3 or fewer people in their lifetime, a 2up leaves no market at all for the newbee.

Strong closers are required who can sell valueless, but expensive products and/or services. Most have some kind of service tied to them. Virtually no newcomer can sell a package that for $2000 - $4000. Instead, they usually get close friends and family to back them making more money for the professional closers who get the sales.

Rather than an expensive seminar or training of some kind, PAS offers an incredible "system" that does all the work.

Most of the products or services offered can be acquired for far less or even free, elsewhere.

Eventually, when the majority of the people realize they aren't making any money, they want their money back, which eventually causes the whole system to collapse, leaving virtually all the members suffering a complete loss.

Finally, when enough complaints reach the ears of law enforcement agencies, the system is shut down.

In most cases, law enforcement agencies don't move fast enough to catch the owners of these systems, who make a big, fat killing and then get out of the country with all the money before they're caught. All that they require to succeed is no conscience and great hype skills. Most (not all) of these owners know full well that their system will fail and that it is, in fact, illegal.)

Be warned! Many of our friends have fallen victim to scams of one kind or another, (remember 12DailPro?) and others. A new one is circling the internet right at this moment called the $7 Miracle. Whether those who are promoting it realize it or not, it is, in my studied opinion, another twist on the Ponzi scheme and it is illegal. If you are in it:

1.) YOU are breaking the law - and -

2.) YOU are going to lose.

I don't care if it only costs $7 - cost does not matter - you will NOT fill your matrix, and you will NOT get the value of your time back, NOR will you get your money back. I can guarantee, however, that the owner will make a ton of money if he can take it out of reach of law enforcement officials soon enough.

If you think I'm blowing smoke, you have definitely not done your research, and you ARE going to get fried. People just like you are getting into these things every day and losing tons and tons of money.

A scam is a scam is a scam. Period. I don't care how nice the scammer appears to be.

For further very informative reading (it may save your bank account) go to and

BE SAFE. Do your due diligence, your OWN research. Don't let yourself get robbed.