Robert Craddock announced a new "revenue-sharing" opportunity in an October 29th ZTeamBiz email, despite federal regulators largely ending the MLM niche. This comes after the SEC's shutdown of Zeek Rewards, which cemented the model's legal standing.
The SEC determined that offering revenue-sharing points for money, regardless of how a company described it, constituted a Ponzi scheme. Most revenue-sharing MLM companies have since collapsed, stalled, or voluntarily shut down. Only a few offshore Hong Kong-based entities still accept affiliate investments.
Under this model, affiliates funnel money into the scheme under various pretexts. Those who previously deposited funds then receive a share of this new money, typically as a daily return on investment.
Retail sales are often included in the model. However, if affiliates can fund their own points, retail income becomes a minor revenue source, regardless of the product or service offered.
Companies that prevented affiliates from self-funding their points saw little industry interest. This often led to stalling due to insufficient revenue to pay participants, or outright failure, such as an early version of Bidify.
Despite this history, some promoters insist the model remains viable. They point to "secret patents" that supposedly offer "the right combination of legal and excitement." These patents, they claim, will "protect the hard work, legal dollars and teams" invested.
Paul Burks, former CEO of Zeek Rewards, famously called his daily ROI percentage calculation a "proprietary secret." Craddock's claims echo this past pattern.
Craddock stated the owner has over 30 years in the industry, significant personal wealth, and employed "top notch" legal, web design, operations, and customer service teams. He promised a corporate bio "sometime next week" to provide "only the facts and not fluff."
Craddock claimed he reviewed the program, met the owner, spoke with key leaders, and discussed core elements with "several attorneys that specialize in SEC litigation."
He has not explained how this latest opportunity, beyond the "super secret patents," will avoid the same failures as previous MLM revenue-sharing investment schemes. The fundamental issue remains: exchanging money for revenue-sharing points was deemed an illegal Ponzi scheme by the SEC.