Richard Rider: Caution! Be circumspect of Wayne Root’s latest hustle

Email from Richard Rider:

Wayne Allyn Root has been a very effective spokesperson for liberty. Not perfect, but a much better communicator than most libertarians. That is perhaps both his strength and his weakness.

At heart, Root’s a salesman. Nothing wrong with that. So am I (and I’m FAR less effective than he is).

But I’m afraid that his bottom line is selling dubious products to “fellow travelers” in the liberty movement (see below). It’s called “affinity selling,” common in belief groups — religious or not.

Such seems to be the case below. He’s hustling what appears to be an MLM program — multi-level marketing. You go to the website, and you get a lot of hype and endorsements, but no substance as to what the program is. For that, doubtless you have to sit through a presentation. Bad sign.

For 20 years I was a CFP financial planner. I worked on commission. I sold good products and bad. While overall I did pretty well for my clients, I made just about every investment mistake there is at one time or another — except pyramid schemes.

I also got to review many investment and business propositions brought to me by clients. I can see, feel, taste and smell a hustle.

Indeed, I contacted the SD COUNTY DA on the infamous local J. David Dominelli commodity pyramid scheme 18 months before it collapsed (the DA did nothing despite two letters I sent detailing my concerns).

Some MLM’s are just harmless pyramid marketing schemes without much front money (think Amway) — others are terrible frauds. Can’t say which one this is, but I’d bet dollars to donuts it is one or the other.

One important aspect of such programs is that the salespeople have to BELIEVE in the program. It’s almost a religion. Few (generally found at the top of the pyramid) are actual con men, hucksters who understand the game.

I suspect that Root is a believer. I KNOW he’s be a passionate and effective sales person for the deal.

I caution Libertarians to be skeptical. Indeed, skepticism is a trait that we have in abundance — except perhaps when we trust the messenger.

Trust NO ONE in investments — and especially in MLM. Think Bernie Madoff — a superb con man who successfully worked his belief group — Jews. Similar con man Ponzi hustles are particularly common among Mormons and Baptists.

Let’s be VERY careful out there.

Watch this special video here

This was sent to me in a group e-mail from Richard Rider, who is known as a crusader against taxes from San Diego, CA.  I don’t know what prompted this mailing.

31 thoughts on “Richard Rider: Caution! Be circumspect of Wayne Root’s latest hustle

  1. Thomas L. Knapp

    1) It’s Allyn, not Allen.

    2) The material referred to isn’t included — not even a name or link for the program being promoted. Absent that, the article above is just “Wayne Allyn Root may be promoting a legitimate business, or not … flip a coin.”

  2. Thomas L. Knapp

    Thanks, Jill!

    I see that the program in question is Wealth Masters International.

    My research into WMI leads me to believe that while it’s a pretty bad deal even as MLMs go (high-priced “courses in success”), it’s not an illegal “pyramid scheme.” Norwegian authorities disagree and have banned it in that country.

  3. Root's Teeth Are Awesome

    I did a Google search for “Wealth Masters International scam” months ago. A lot of hits came up.

    Remarkably, most of the sites began by asking if WMI was a scam, then explained why it was not. As as I dug through the pages of “articles” and posts, I began to notice that many of them used similar (in some cases, identical) language.

    I suspect that WMI hired Reputation Defender, or one of those companies, which floods the internet with bogus positive reviews and “articles” about their clients, written in language that will score high on Google if anyone types “scam.”

  4. Thomas L. Knapp

    RTAA,

    That’s a fairly common SEO tactic. It’s not even especially an indication that a program is a scam.

    If an MLM bought an “all-around SEO package,” the “scam” keyword would very likely be included just by way of “immunization.”

    One way of evaluating a company’s basic honesty is its Better Business Bureau rating. WMI is not registered with WMI, but BBB has received and closed 23 complaints, all of them either resolved with the customer by WMI with BBB assistance, or BBB determined that WMI made a good faith effort at resolution.

  5. Thomas L. Knapp

    NewFed,

    I wouldn’t say I have “faith” in the BBB. But they do maintain a database of how many people have complained about a business, what the nature of the complaints were, and whether or not, and if so how, the complaints were resolved.

    To put it a different way, I doubt that you could say a business is “good” based on a BBB record, but if a business is bad, especially really bad, it pretty much jumps out at you.

    So, WMI may or may not be “good,” but of 23 complaints filed, they settled 19 to the customers’ satisfaction, and in the opinion of BBB made a good-faith effort to settle the other four, and most of the complaints were in the nature of “I’m not happy with the product.”

    So presumably they do not e.g. take your credit card number and next month you find out you’ve been hiring prostitutes in Phuket, even though you’ve never been there.

  6. Tom Blanton

    Send me a check for $5,000 and I’ll teach you how to get people to send you checks for $5,000.

    If you can get only 200,000 people to send you a check for $5,000, you can make one million dollars, er uh, one billion dollars.

    You will no longer have to rent prostitutes in Phuket, you can actually own them.

    This is not a scam!

  7. Matt Cholko

    I checked into WMI a year or so ago, when doing some research about W.A.R. and determined that it is an MLM “business”. I wasn’t a big fan of Root prior to finding out about WMI, but lost most of my remaining respect for him once I learned he was pushing an MLM scam.

  8. Thomas L. Knapp

    NewFed@10,

    Phuket is in Thailand. Didn’t you watch Lost? 😉

    Matt@13,

    Not all MLMs are scams.

    After researching WMI, I’m convinced it’s a piss-poor deal — overpriced courses designed for chronic MLMers, basically — but “scam” implies a certain level of outright dishonesty, and I’m not absolutely certain that WMI gets there (nor am I absolutely certain that it doesn’t, to be clear).

  9. Oregon Libertarian Guy

    Nothing wrong with what WAR is selling. It is just information, advice and access. MLM is not different from any other business that uses front line salespersons except that anyone can choose themselves to promote the biz and they get a commission for finding customers as well as building a team.

    While a lot of MLM products are over-hyped and over priced the real problem comes with the sort of bad characters that are attracted to MLM’s and thus you get the arm twisting, browbeating and out right lies from such bad actors. But then again, are we not seeing that from the banksters and other corporate raiders out there?

    My own opinion is that I don’t think it was a good idea for WAR to actively promote WMI at this time if he wants to run for president. The MLM stink will follow him no matter how hard he tries to say he is not that stink.

    We shall see how this plays out for him in Vegas.

  10. Root's Teeth Are Awesome

    I don’t think it was a good idea for WAR to actively promote WMI at this time if he wants to run for president.

    But the whole reason that Root is “running” for president is to promote his media ventures and “businesses.” He even touts on his WMI page (at the link Rider provides):

    “Wayne Allyn Root is a politician, entrepreneur, television and radio personality, author, and a well known political commentator. He was the 2008 Libertarian Party vice-presidential nominee. Today is Chairman of the Libertarian National Campaign Committee.”

    Root is using his LP creds to allay any suspicions customers may have about WMI being a scam, or even a bad deal. “Hey, this guy was an LP VP candidate! He’s got to be legit!”

    Root isn’t running for president to win. He’s running to promote his punditry and businesses.

  11. D. Frank Robinson

    One thing about putting a scam to the acid test. Acid burns. Some things are worth testing.

  12. Steven R Linnabary

    Where is the line that separates the bad deals from the scams? How bad does the deal have to be before it is a scam?

    Good question, much like where is the line between prostitution and honor?

    I’m reminded of Norma Jean Almodovar (sp) seeking the LP nod a few years ago. Or Kristin Davis more recently. It took years to get the stench of their alleged improprieties off the LP.

    But at least these women didn’t have an official LP title to try to justify their scams. It appears that Wayne is using the LP & his titles to make it seem as if the LP endorses his scam(s).

    PEACE

  13. Thomas L. Knapp

    TB@18,

    Whether or not something is a scam is not a function of how good or bad the deal is in terms of cost to benefit. Value is subjective.

    I looked at WMI’s products and thought to myself “what kind of fucking idiot would pay that price for that content?” Someone else (a fucking idiot, IMO, but just IMO) might look at the same products and decide he’s found a bargain.

    It’s only a “scam” if the product, service or opportunity is misrepresented.

  14. Tom Blanton

    It’s only a “scam” if the product, service or opportunity is misrepresented.

    Where’s the line between misrepresentation and puffery?

    The scam/bad deal question and the puffery/misrepresentation question are what law suits and fraud cases are made of.

    In the case of WMI, there are at least some people who lean toward the misrepresentation/scam perception:

    http://www.ripoffreport.com/home-based-business/wealth-masters-wealt/wealth-masters-wealth-masters-7p33m.htm

    The reason Root is controversial in libertarian circles is his propensity towards hyperbole and a tendency to exaggerate facts. There are those who apparently believe he is spreading the message of liberty and others who believe he is merely parroting garden variety right-wing talk radio rhetoric.

    Some people believe aggressive salesmanship loaded with questionable assertions of fact is an admirable quality, while others are immediately turned off by it.

    Sure, everyone is entitled to an opinion. Even the rare rape victim who enjoyed the experience and even the voter who supports a politician while knowing the politician is a liar.

    The thing is that most people realize that all opinions are not equal. Bad ideas can have very bad consequences and there are a lot of bad ideas out there. I would consider investing in WMI a bad idea – even knowing that if I complained to the BBB, I would probably get my money back.

    If I was a scam artist, I would also resolve BBB complaints. The cost to do would allow me to rope in more rubes, many of which won’t complain.

  15. Tom Blanton

    It’s only a “scam” if the product, service or opportunity is misrepresented.

    Where’s the line between misrepresentation and puffery?

    The scam/bad deal question and the puffery/misrepresentation question are what law suits and fraud cases are made of.

    The reason Root is controversial in libertarian circles is his propensity towards hyperbole and a tendency to exaggerate facts. There are those who apparently believe he is spreading the message of liberty and others who believe he is merely parroting garden variety right-wing talk radio rhetoric.

    Some people believe aggressive salesmanship loaded with questionable assertions of fact is an admirable quality, while others are immediately turned off by it.

    Sure, everyone is entitled to an opinion. Even the rare rape victim who enjoyed the experience and even the voter who supports a politician while knowing the politician is a liar.

    The thing is that most people realize that all opinions are not equal. Bad ideas can have very bad consequences and there are a lot of bad ideas out there. I would consider investing in WMI a bad idea – even knowing that if I complained to the BBB, I would probably get my money back.

    If I was a scam artist, I would also resolve BBB complaints. The cost to do would allow me to rope in more rubes, many of which won’t complain.

  16. Thomas L. Knapp

    TB@23,

    “Where’s the line between misrepresentation and puffery?”

    Debatable, but I’d personally put it at the point where materially false statements of fact, as opposed to unduly rosy projections of possibility, are made.

    Now, two things:

    1) I dislike unduly rosy projections almost as much as I dislike actual fraud. In both cases, one person is trying to sell bullshit to other people. The difference is the difference between just putting perfume and a little umbrella on the bullshit and insisting that the bullshit is actually a new Maserati.

    2) I’m not going to defend Root’s personal honesty. I’ve caught him flat-out, bald-faced, no-shit lying more than once, and have concluded that he has precisely zero conscience and can be trusted not nearly as far as he could be thrown.

    I generally start from the presumption that anything Root’s involved in is at best “unduly rosy projection” and very likely “scam.” But I still consider it necessary to actually figure out which, instead of just assuming one or the other, and to keep an open mind to the possibility that he may at some points abandon his con artist ways.

  17. Alan Pyeatt

    RTAA @ 16: “Root is using his LP creds to allay any suspicions customers may have about WMI being a scam, or even a bad deal. “Hey, this guy was an LP VP candidate! He’s got to be legit!””

    That is one interpretation of the facts. There are other possibilities, and I notice that Mr. Root’s articles are often posted by one individual who, in my opinion, is actively working to destroy the LP from within.

  18. Louis

    Check out the site and the excerpt from http://vraletter.com boasting Root’s endorsement.
    “Kip’s VRA financial newsletter is a MUST read for every saavy investor in this country. Disregard it at your own peril. His mantra is my mantra: Buy Gold and China. Sell short on pretty much everything else. Kip Herriage’s newsletter is my financial Bible.”

    –Wayne Allyn Root
    2008 Libertarian Vice Presidential candidate
    Author, “The Conscience of a Libertarian”

    Here Root’s promoting the opportunity again. Check out the site and the excerpt from http://crashproofprosperity.co
    Wayne Allyn Root
    Wayne Allyn Root is one of the most charismatic, passionate, fiery, outspoken and controversial political and business personalities in America today. Wayne was the 2008 Libertarian Party Vice Presidential nominee. A college classmate of Barack Obama at Columbia University, he is now the leading contender for the Libertarian Presidential nomination in 2012.

    Wayne is the quintessential “Citizen Politician” envisioned by our Founding Fathers. He is a S.O.B.(son of a butcher) from humble beginnings; second generation American; small businessman; and home-school father of 4 young children. He is also a self-made millionaire who has built a business empire in Las Vegas, Nevada.

    Wayne is proud of his Nevada roots- a Western frontier state known for smaller government, personal responsibility, and the lowest taxes in the nation. Nevada leads the nation in both economic and personal freedom.

    A former anchorman and TV host on Financial News Network (now known as CNBC), his careers as an CEO, entrepreneur and politician have been profiled by CNBC, The Wall Street Journal, Time, Newsweek, Fortune, Equities, Millionaire, The Robb Report, CNN/Money, Reason, The American Spectator, and the New York Times (among many others). He is frequent guest on Fox News Channel and Fox Business. Wayne is also the author of 7 books on the topics of sports, gambling, business and politics.

    **Inside CRASHPROOF** Wayne will be providing unique video commentary and predictions throughout the month along with CRASHPROOF Insiders updates.

  19. John C Jackson

    I’ve never paid for a prostitute, but I imagine most are more honorable than the majority of MLM businesses.

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