Jim Vitale:
I think the catalyst is money. My best month, I made 50 thousand.
Narrator:
In 2005 Jim Vitale was convicted for his role in a business opportunity scam.
Jim Vitale:
There was ridiculous money being made. You could take down 20 million dollars in 8 months.
Narrator:
He sold the American dream - the dream of being your own boss
Jim Vitale:
It’s basically learning how to listen and manipulate people, once you understand the dynamics of what you’re trying to do, which is separate them from their money, that’s it.
Eileen Harrington:
Business opportunity fraud occurs when someone tells you that they will give you what you need to successfully operate a profitable business, and when they do that in a way that guarantees and ensures your success.
Narrator:
Every year, thousands of people lose millions of their hard earned dollars to con artists selling fraudulent business opportunities.
Eileen Harrington:
The telltale signs of business opportunity fraud are “You can earn a lot of money. I will show you how to do it. And you can count on being successful.”
Narrator:
It all starts with an ad - full of promises…
Jim Vitale:
Things like “stay at home, no real legwork required, turn-key business opportunity,” things that get people’s attention. And then they call in.
Narrator:
Sometimes, the voices behind these claims are celebrities…
Celebrity 1 (Adam West):
Hi folks, I’m Adam West. Oh, I wish I’d had one of these in the old cave! It’s called EZ Link.
Celebrity 2:
And every feature could earn money for you!
Celebrity 3:
For a piece of tomorrow, call now.
Eileen Harrington:
When somebody responds to one of their advertisements, there’s a very careful process to lure them in.
Jim Vitale:
“Hey! How are you, Jim? First thing I want you to do is grab a pen; I want you to write my name down.” Now I have control. You’re—I’m already telling you what to do. I give you my name, my phone number, I tell you a little bit about myself. And then I set an appointment. And I also give you references.
Narrator:
Craig D’Angelo is from upstate New York. A TV ad said he could get in on the ground floor of new high tech revolution - by owning and operating internet kiosks.
Craig D’Angelo:
My main goal for getting into—for buying—the machines wasn’t so that I could have a business and retire and get rich. I was just looking for something to supplement things and really kind of make it easier for my wife and kids. I was a police officer at the time, and I was very cynical. I’d dealt with people that got scammed before, so, you know, I was really looking for the warning signs.
Narrator:
It sounded simple and lucrative - a plan that couldn’t miss.
Craig D’Angelo:
You got to remember, this is before Wi-Fi, and before, you know, Twitter and all them, and before these Blackberries could do everything. So it was really awesome to have a terminal that you could walk up and throw a buck or two in and check your e-mail, or get money out of, or pay a bill.
Narrator:
He called the Better Business Bureau; there were no complaints against the Easy Link company. Then he sat down with his wife and father to discuss the investment.
Craig D’Angelo:
I bought two machines. I ended up paying like 12,500 a piece for them, so 25,000 dollars. Which is a lot of money. And, I didn’t have that money laying around. I took a second mortgage on my house to do this.
Eileen Harrington:
If somebody has figured out a foolproof way to earn a lot of money, why are they possibly going to tell you how to do that rather than doing that for themselves all over the place? So be very skeptical.
Craig D’Angelo:
The warning sign came right when it was kind of too late, and I think the jerk’s name was Vitale. He said, “Thanks a lot, Craig, we’re going to make a lot of money together. And I said, “Oh man, I think I’m in for a ride.”
Eileen Harrington:
The first thing that anybody interested in investing should do is ask for the written disclosure document. It should list all of the people who have purchased the business opportunity. If there are any earnings representations being made, there is a separate earnings claims document. If they won’t give you that, just don’t go near it.
Narrator:
Like Craig, Debora Eaton thought she’d found a solid business opportunity.
Debora Eaton:
I’ve got right here a cashier’s check for 8,500 that I mailed to them.
Narrator:
The company, Ameripos, repeatedly called Deborah over six months.
Debora Eaton:
He had given me, like, four people to call to give me references that had been in the business for the last two years.
Jim Vitale:
Let’s be honest: you don’t know me from a hole in the wall. You called a 1-800 number on the TV. I don’t want you to take my word for it. Let me put you in touch with some distributers, people just like you.
Debora Eaton:
One of the girls was in Kansas City, so we called her up, and she said that she sent her son through college with just the money she made off the machines.
Narrator:
Deborah and her husband hoped to retire on the income they would receive from five prepaid phone card machines.
Debora Eaton:
These three were installed in different stores and never made a penny.
Eileen Harrington:
What they usually do is give you just a few references, and those references invariably are in cahoots with the fraudsters.
Phone Voice 1:
You have three of those easy link machines?
Phone Voice 2:
Yes, I do.
Phone Voice 1:
How’s it goin’?
Phone Voice 2:
[Chuckle] Going fine. I started out with one, and I bought another two about three or four months later.
Phone Voice 1:
Can I ask you how soon you recouped your money?
Phone Voice 2:
Sure. The first machine in about 10 months.
Phone Voice 1:
Wow, so you’re doing pretty well!
Phone Voice 2:
Yeah
Eileen Harrington:
Even if it’s the kind of business that doesn’t require a storefront. You need to go and visit them physically. You need to see what the setup is. Go to their homes. Ask to see a list of their accounts.
Debora Eaton:
Oh, you’ll get it back in three months, but I’m going to say six just to be on the safe side. Three months? Wow! Are you sure? Oh yeah, I’ve had people do it a lot sooner than that even. This is great! No, it wasn’t great. It was a nightmare.
Jim Vitale:
If you’re talking to somebody who is asking questions in reference to the legitimacy of the business, at that point, you do a slap takeaway. You know what, Jim? Let’s stop now, because I have a whole, a full day of appointments with people who are looking to get into this business, who want to make money, not people who are going to pick apart my disclosures line by line, ok? With all due respect, listen, there’s plenty of things out there. Take your time, shop around. You want to give me a call back in a couple months, if I have something available, I’ll be willing and put you into it. But right now, I need to focus on somebody who’s serious.
Eileen Harrington:
When they tell you, “You need to hurry up and make your decision, because there are other people who are also interested in buying this opportunity in your area, and there are only a certain number of opportunities,” back off. That is a sure sign of fraud.
Narrator:
And it may come as no surprise, that when the economy is in decline, fraud is on the rise.
Jim Vitale:
You have people that have been successful for the last 10 years, so they got a little something put away. Now, you know, they took their expense account, they cut their overtime, so now they’re looking to increase their earning potential. Business opportunities can boom in a recession and in a downturn in the economy.
Craig D’Angelo:
You know that show Get Smart where he walks down the hallway and these doors open up, all right? And as he goes through a door, a door shuts behind you? It’s like that. It was like this process they had you going through, you know? You walk through a door, bang, the door shuts behind you. You’re not going back. They knew exactly what they were doing, and they were very, very good at it. And by the time you get to that little phone booth at the end and you dial that number to make the purchase, whoosh. Down the shoot you go, and your money’s gone.
Eileen Harrington:
Nobody in business is going to give you your money back if your business fails.
Jim Vitale:
You never saw me in your life! You saw a commercial on TV. You got on the phone with me, you spoke to me for 10 seconds, I gave you some names to call, and I gave you some things to look up. And you called me back three days later, and you wrote me a check for $50,000. Does that sound a little screwed up?
Eileen Harrington:
People want to believe that there is some opportunity that they can invest in that will guarantee that they will have financial success. There is no such thing; there just is no sure deal. None.
Jim Vitale:
The best advice I could give to anybody who’s looking to purchase a business opportunity, or purchase any investment over the phone, is “fast nos and slow yeses.” Period. The end. Fast nos and slow yeses.
Narrator:
If you are considering buying a business opportunity. Get a written copy of the disclosure document. It includes information about the company, a list of previous purchasers, and information about lawsuits the company has faced from buyers. Get information in writing about earnings claims. This should include the number and percentage of recent buyers who earned at least as much as the company claims. Interview previous buyers of the business opportunity in person. The FTC requires business opportunity sellers to give potential buyers the names, addresses and phone numbers of at least 10 previous purchasers. Resist the urge to buy a business over the phone. Promoters of fraudulent businesses are likely to tell you there are a limited number of opportunities and this is the time to get in on a great deal. Finally, if you suspect that a business opportunity is fraudulent, report it to the Federal Trade Commission. Go to FTC.gov or call 1-877-FTC-HELP.
Debora Eaton:
They’re nice machines, anybody out there want one… I’ll give it to you free.
