MLM & Pyramid SCAMs...and how to avoid them!

The only thing “new” about RESICA is the name. It is nothing more than the standard Pyramid scheme that uses other peoples money to “pay” the first “investors” their “profits.” At least until there are no more suckers to join the scheme. The whole system depends on no one finding out about the fraud. It also explains the need to use Money Orders or cash rather than checks that can have payment stop orders placed on them.

You can find several web sites promoting these schemes under various names. I’ll leave the searching to the reader. What you will not find on any of the sites is a logical explanation of how they actually operate. Nor will you be presented with any product that the businesses offer for sale. That is because there are no products or even services. The only thing being sold is the “RESICA Base Account”. That always goes to the original person who starts the scheme, of course. The secondary “investors” will only see any income if they are able to find people willing to buy into the scheme.

The basic principle of any Ponzi operation is to use the multiplier effect to keep pumping new money into the system. Each “investor” must be able to get at least two more people to “invest.” Those two people then get at least two more and on and on it goes until there, inevitably, is no one else willing and able to “invest.” How fast that occurs depends on the multiplier number. That is, a 1 to 2 effort will last the longest since it will take longer to get the whole world’s population signed up! If each “investor” is required to sign up more than 2 new people, it will take less time to run out of people, since that number if rather finite.

You can do the math rather easily to prove that these schemes will always fail. It is requires simple multiplication: In a 1 to 2 plan, simply multiply each new membership total by 2. Here’s a table showing how it works:

I think you can see where this is going. I don’t think the numbers even need to get this high before it becomes very hard to find new people willing to “invest” their money. In fact, it soon requires looking outside your own city and eventually even your state to find even the “investors” you need! Now, if the scheme requires more than two sales by each “investor”, the only thing that happens is that the numbers increase even faster! Naturally, the “profit” to the original person soon reach a level where he can easily move to another country on one of his yachts or jet aircraft... “Thank you, very much!”

Of course, many of the very early “investors” can possibly make some money, at least until the police break up the scheme... and trusting Mr. Dukes to actually send you any cash!