DubLi Network MLM Scam Or Legitimate MLM Business Update

Thank you for coming back by to visit. Feel free to leave me a comment on the post you enjoyed the most.

After my first article on DubLi I started hearing back from several people. However, one of the top leaders was kind enough to respond in a professional manner disputing several of the fats I stated.

As a matter of fact as you read, you will find he was under the impression my FACTS were in reality my opinions. After reviewing his very in-depth rebuttal, I have decided to make public our email conversation.

My Responses are found below (Troy’s Response)

Start of Email….

I’m going to respond to what Troy said on the website at http://www.mlmhelpdesk.com/2009/05/18/are-dubli-and-dubli-network-legit-mlm-business-opportunities-or-scams/.

My overall reaction is of major disappointment for a couple legitimate reasons:

1. Most of the info in my responses could have been obtained without much effort or research, as I expressed in my initial response to you, which makes it seem like the report is more to attack DubLi (to stop a huge number of distributors from other companies from joining DubLi) than it is to “protect” the public.

(Troy’s Response) I have neither made a personal attack nor any hidden agenda, just laying out the facts as I found them.

On a personal note; the more people who join DubLi the more money I would make because I own a lead company, and we are already selling leads to DubLi distributors.

2. Many of the accusations are merely opinions about whether the person who wrote the report likes the product or business model. Saying you dislike a product is completely different than saying a company is illegal and/or will be shut down for “Money Laundering” or “federal RICO act” violations. If you want to make the case that DubLi is illegal, then do so, but complaining about how the auction process works or how much traffic the company has are completely separate discussions.

(Troy’s Response) I agree fully with you. And in some cases I made it clear it was my opinion, at other times I shared legal facts and case law.

And at no time did I ever say “DubLi was” an illegal or money laundering operation” But I did say based on my professional opinion it sure looked like one, but

only a Court of Law could decide.

Based on those two considerations above, I can only conclude that there is a serious bias and agenda behind this report, which makes me doubt the integrity of the DRA in doing their “research.”

My responses are in the order of the comments as they appear on the website above.

- “All Pre-Launch money received was from Licensing fees and the sale of Fictitious Currency” – There are so many businesses that sell tokens or credits that it’s amazing to me that the claim of “fictitious currency” is made right at the beginning of this report, without any further substantiation.

(Troy’s Response) You are correct many company do sell credits or tokens. Vegas is full of them. But very few put a network marketing compensation plan to them. In the couple of cases where they have like “My Shopping Genie” they have gone in and made huge changes to the compensation plan or dropped it all together.

And, your response did not negate my statement “All Pre-Launch money received was for Licensing Fees” (we’ll address the fictitious Currency below.)

I talked to several reps, went through the sign up process back in August and again in November and stand by my statement.

This claim is repeated in the next bolded line, “The product being sold is “Credits are a fictitious currency” with no real value,” but never provides any reason or judgment by anyone.

(Troy’s Response) I did provide “reason & Judgment” for my statement. Here it is again. According to DubLi.com http://us.dubli.com/info/13-Terms-Conditions Sub-paragraph

Ҥ 4 DubLi Credit Purchase, Credit Account

(1) In order to use DubLi services, the participant must purchase so-called Credits. Credits are a fictitious currency used in paying for online services offered by DubLi.
One DubLi Credit bought singly corresponds to the equivalent value of $ 0.80 (eighty cent). Credits may be purchased singly or in packages of between 10 and 5,000 credits. The participant must purchase a balance of Credits before taking advantage of DubLi services. Each participant’s current account balance will be displayed in their customer account area. Account balance statements are non-binding and do not in themselves justify entitlement to the use of DubLi online services at their equivalent value. Participant account balances are not transferable.”

So, as you can see, I used the terminology used by DubLi. And having the “equivalency of” is not the same as “real value.” Especially since the DubLi has already determined the Credits are part of a “fictitious currency system.” If a ‘credit’ is part of a ‘fictitious currency’ system, then the added value is only as good as the underlying ‘fictitious currency system’. This is nothing more than understanding the Law of noncontradiction, which is exactly what a court of law will use in a determination.

DubLi in fact has established and confirmed with both USA federal regulators and the 50 state attorney generals that the credits they sell are in fact valuable and would be purchased by consumers whether they were sold by the company or by reps in the field.

(Troy’s response) I believe you believe the above statement. However, having worked closely with federal agencies who deal in these types of situations (Secret Service, Treasury Department, State Department, FTC and SEC), plus running a network marketing company for several years, I can assure you that NONE of these agencies nor do State AGs write or offer opinions to companies to validate if they are legal or illegal.

So, if you can produce signed documentation from any and all agencies involved, proving I am wrong, then I will gladly write a rebuttal and shoot videos to resend my published statements.

More importantly from a profit standpoint, Yahoo! and its affiliated merchants who pay DubLi each month for its click-through shoppers agree that there is considerable value (along with all of the registered DubLi customers who buy credits each month and participate in the auctions).

(Troy’s Response) I respectfully disagree. What B2B sales are made based on click-through shoppers is far different than the sale of credits in a reverse auction.

Plus I made it clear right up front if DubLi could generate enough money to the field from other sources (not the sale of credits) then they might stay out of trouble. But even that will not negate the issues I have brought up based on the legal opinions that rule the Direct Selling Profession.

There is no question that businesses and customers alike find DubLi’s products and services valuable and are willing to pay for them month after month. This “fictitious currency” comment is nothing more than an attempt to harm DubLi, and it comes with zero substantiation (because there is none).

(Troy’s Response) Again, I have no personal agenda against DubLi or any of it representatives. My only agenda (if you want to call it that) is to make sure that anyone who is looking at DubLi realizes right up front there might be issues.

If great companies like Amway, ACN, YTB, XanGo, MonaVie, Primerica can have the FTC and State AGs come after them, don’t fool yourself to think DubLi is exempt.

- “For every 1 customer who wins, 99 lose.” – First, this is impossible to verify, so this is merely an allegation, and second, so what?

(Troy’s Response) If you take my statement out of contact I will fully agree with you. But when you put in back in context (Reverse Auctions) and you use the mathematical algorithms which are what a reverse auction is based on, then you realize that just like people sitting down at a bingo game, slot machine, or any other ‘game of chance’, everyone plays, but only one person wins.

As I shared in the blog post, if the majority of people get know value, then the FTC will not see this as a legitimate business opportunity. You can look at the current case against Burn Lounge, YTB, and Ad Surf Daily as examples.

This hardly makes DubLi’s auction unfair, unattractive, or illegal. That’s how an auction works. Every auction on ebay only has 1 winner.

(Troy’s Response) I made it clear in my post, that the Action Platform was not my concern. Since it is run as a completely separate business model, it will continue without the DubLi Network. The legality of DubLi Network is what I question, not the software platform.

And your comment about EBay has no logical place in this conversation. People do not pay to play at EBay.

- “Fictitious Currency (DubLi Credits) sold to customers to participate in reverse auctions (a type of gaming or lottery play)” – In a two-page statement from Nov. 2008 (PDF titled “Dubli Statement from [CEO and Founder] Michael Hansen”), it specifically says that “… according to all 50 of the U.S. State Attorneys offices, DubLi is not a lottery and is perfectly legal in every state.”

(Troy’s response) I have read everything published by DibLi as of the date of my Blog Post. And at no times does Michael provide the 50 state documents, not the four to five Federal documents to prove his statement. On the other hand I have contacted the Florida AG Office and they do not have any written or verbal opinion on record. But they were interested in learning who had purported that they had done such a thing.

Again, if you can get Michael to produce these documents, with the signature of the AG who issued them, I will do a full retraction and apology.

The USA State Attorney General offices seem to agree, based on their actions. None have elected to take any action or even object to DubLi’s auctions as “gambling enterprises” or “lotteries.”

(Troy’s Repsonse) You must not have much interaction with law enforcement agencies because you have no clue what they are doing right now, nor how long it will take. Ad Surf Daily made statements just about as bold as you are right now. Then one day Secret Service Agents from Washington busted into the offices, and froze $53 million dollars in assets. Guess who lost… the distributors who believed every word of their upline leaders, who believed every word of the owners. Sadly it is these top distributors who are also named in some of the pending litigation.

As I said at the very beginning… Only a Court of Law will decide in the long run.

The people who post negative comments about DubLi in order to drive traffic to their own site can say that it’s gambling, but the legal authorities who are responsible for enforcing gambling laws in each state do not agree. Furthermore, on the DubLi website at http://www.dublinetwork.com/download.php?ID=350 (PDF), the company has provided the legal opinion of an attorney who goes into extreme detail about whether or not DubLi is a gambling or lottery business (from December 29, 2008).

The attorney’s contact info has been hidden to eliminate the massive number of people who otherwise would be contacting him, but if you wanted to speak to him to get important info before putting out serious accusations, I’m sure you could get his info from DubLi.

(Troy’s Response) The statement on “driving traffic” is asinine and so over used. It’s as bad as 95% of people fail in MLM.

Now as for the attorney with the hidden name. All that shows is Michael paid too much for legal advice. Pres. Bush has hundreds of attorney’s who said “Water Boarding is Legal”. Now with a new administration a new set of attorneys had written opinions stating “Water Boarding is Illegal.”

Attorneys are paid for two things their opinions or their ability to win. And in some cases they write their opinions in order to get the first right of defending those opinions.

If you can provide the Legal Agencies written opinions, then I would be interested. But a private attorney doesn’t mean a thing. That is why we have more than one law firm creating Policies & Procedures for the profession. One group “Grimes & Reese” say one thing, Babner another, and Gerry Nerah still another.

Let’s stay focused. Provide the Legal opinions of all 50 AGs and the Federal Agencies, and I will contact them write what I find and blast it all across the net.

- “Dubli Network nor DubLiCOM have any type of “Real” corporate office or employees in the USA.” – DubLi’s corporate headquarters address is listed online and you can fly there tomorrow.

(Troy’s Response) Sure we can fly there. I provided links to the building where their mail is delivered, phone is answered, and where their Statutory Agent of record resides. However again going by their websites, they do not have any operations in the USA, and the logistic company is not (as of the date of my post) legal to do business in AZ, and was also located in the above units.

In fact, how responsible is it to hammer a company for numerous allegations without going to their main office first?

(Troy’s Response) Their main office is in Berlin, and they only hold open house every now and then. I don’t need to go to an office to pick up the phone make a few calls, talk to the people on the other end and find out what I need to know.

They are just now getting everything setup in the USA and will soon have a huge presence here. But where a company is headquartered is immaterial anyway.

(Troy’s Response) They have been doing business in the USA since 2004. Yes they have just now launched in a big way the network side of things. But, it is easy to review all of their past years worth of website pages, and they have been promoting the business opportunity for a few years as a USA based company.

I agree, where a company is headquartered is not important. But purporting that you have a headquarters and you don’t is material; especially when you run a marketing company using a network marketing compensation plan.

I was with Nu Skin Enterprises for 17 years, and I was in the “headquarters” of many of their foreign offices when they were initially being established, and they looked like very temporary setups for quite a while until several months of production passed.

(Troy’s Response) You said it yourself. They had overseas offices. However, DubLi as of the time of my post, did not have their own office. I provided all the facts I did not make it up.

You need to understand, I hope DubLi Network gets their ducks in order. As a matter of fact it would have been better to use grimes & Reece as they office of record, compared to just a fly by night company who could not answer the basic questions about the company.

- “All Funds are funneled out of the USA” – This allegation will be null and void (and very embarrassing for you) when the US payment system is finally established in the next few weeks. All money will process in the USA and commissions to reps will be paid in the USA.

(Troy’s Response) If you want to call it an allegation then prove it.

What might happen in the future has nothing to do with the past. I could have gone deeper and explained why PayPal and Google Money are not payment options.

Remember, I went through the sign-up process twice, money was wired or placed through an international merchant processor.

When you have provided me all the documentation, the updates when everything is up and running, I will gladly write a new post, sharing the good news.

Again, this is not a “slam DubLi attack” It is to share with unknowing distributors the facts as they are, or were when I wrote the post. I have been keeping up with purported changes, and will continue.

- “DubLi and several of its partners operate in well known Tax havens” – Using this logic, I guess if I live in Harlem I must be a crack dealer. This is another ridiculous accusation. Besides, anyone smart enough to avoid taxes gets my respect, not my condemnation.

(Troy’s Response) When the President of the USA comes out and states “I am going after ALL companies doing business in the USA foreign and domestic who are doing business from known tax havens”, then I would not see this as a ridiculous accusation.

Besides it was not an accusation, it was fact, based on the DubLi, DubLi network, and DubLi Investment websites.

Then add to that, the fact that two of the top distributors also validated the facts and stated “Michael is a wealthy European and needs to protect his money.”

You are a very successful, wealthy leader, who is doing DubLi for the money. But there are those who are brand new to MLM, who are looking at DubLi Network as the answer to their dreams. If you are right and this company will soon become the next billion dollar company in MLM, then they will win and win big. If I am just ½ right, you will go on to do something else, they will get burned and will tell their friends MLM is a scam. My agenda is to make sure that if they are going to join DubLi Network they do it with their eyes wide open, and can’t blame anyone but themselves.

I do not know everything, but instead of sitting back and asking yourself “Why does he feel this way” or “what does he know”, you decide I have some hidden agenda.

Let’s take a logical look at this for a second. I am second generation MLM. I have a successful 27 year track record; I promote the profession of several radio shows. I am not attacking DubLi because I hate MLM, I am investigation and providing facts because I Love the Profession – I’m not the enemy!

- “DubLi is offering to sell unregistered securities within the USA without proper registration.” – I actually wondered about this myself, and will leave that topic alone. I’m not sure what the right answer is here, but it still doesn’t have anything to do with the other accusations about the legality of DubLi’s business model. Actually, if anything, you have to wonder if a “money laundering” business would really bother to sell securities or stock in its company if it didn’t have long-term intentions.

(Troy’s Response) It’s just as important as everything else. It’s never one BIG thing that brings a company down. It’s a combination of little things that leaders say “But it doesn’t have anything to do with the legality of the DubLi business model.” I disagree.

Based on your response, just because Enron was cooking their books, it doesn’t matter, because it has nothing to do with the services they offer.” If a company or a person is acting unethical in one area, do you really think it stops there? There is no such thing as business ethics. You are either ethical or you are not.

As for your statement on “You have to wonder if a “money laundering” business would really bother to sell securities or stocks in its company if it didn’t have long term intentions” I guess you really don’t understand money laundering.

It all comes down to ethics. Do It Right, Or Don’t Do It At All.

- “might pass FTC scrutiny, if the commissions paid from the sales of products is at least 50% of the commissions earned” – Really? In my 20 years of network marketing (19 of them full-time), I’ve never seen a company stay in business where reps were NOT paid 100% on commissions on the sale of products.

(Troy’s Response) Look I can tell you are just a distributor who made some great money. If you don’t understand the law, and did not take time to review my statements, then don’t say anything at all.

You can’t get paid legally for enrolling reps, so where else is the money coming from?

However, in almost all companies, the overwhelming majority of product sales are to reps, but with DubLi the majority of product sales in Europe are to customers.

Here in the USA, we will begin our customer acquisition phase next month, and customer product purchases will quickly surpass that of our reps. That process takes some time to establish, of course, but in the meantime all our credit purchases by reps are still legal and valid.

(Troy’s Response) Time will tell. Please keep me posted.

- “Dean Mannheimer, has been called the Master Franchiser & V.P. for DubLi USA” – Dean is not a traditional “V.P.” for DubLi, but has attained the rank of VP – our top reps are called “Vice Presidents,” just as some companies call the top ranked reps Diamond, etc.

(Troy’s Response) OK

- “no address is listed for any DubLi Arizona warehouse.” – They’re shipping products, though, because we have many people who have received their shipments. I can put you on the phone with 5 right now if you want to interview them. So the fact DubLi doesn’t provide an address for the warehouse is unimportant.

(Troy’s Response) I fully understand they are shipping. However, they list AZ as the place of business for DubLi Logistics, yet that company is not registered through the state of Arizona Secretary of State and a foreign or domestic company. And the website has it based in Delaware.

Again if you can’t connect the dots, questions come up.

- “During the pre-launch all reps located in the USA we signed as European reps, and had to wire transfer money or use international merchant accounts in order to be approved.” – True that USA reps were enrolled “as EU reps,” false that we “had to wire transfer money or use international merchant accounts.”

(Troy’s Response) That is not false. That is based on my personal experience and what the website info stated. I’m not saying you could not pull out your credit card and use it. I am saying the money trail was offshore.

And as one more fact to this issue… ALL DubLi websites are based outside the USA. If you are signing up, then your money is being submitted offshore.

- “It was not until the official USA launch of the DubLi Network (Beta) in October of 2008 that U.S. based reps were allowed to start selling and/or giving away credits in the USA.” – True statement. I looked at DubLi’s marketing strategy and thought it was brilliant. The word is slowly getting out, but we’ll still accomplish what we originally set out to do, and that is to have almost all of our reps simultaneously flood the market with credits, creating a stampede of customers to our site. It worked very well in Europe, so we expect similar results in North America.

(Troy’s Response) Above you made a statement about Web Traffic. In doing years of background traffic reviews for DubLi, I still do not see where they have ever had massive customers hitting their sites. I do not question they are successful in Europe, I question if their definition of success in Europe is the same as ours in the USA.

- “85 to 1 customers to reps: According to the DubLi Knowledge Base website DubLi states ‘In Europe, the customer base to associate base is 85 to 1.’ In reviewing the last five years of the website DubLiNetwork.com, the site was registered in 2004, but did not go live until 2006, the same year that DubLi changed its domicile to the USA. However, since they did not start focusing on building the DubLi Network until last year, and they brought the USA based reps into the game as EU reps, it is easy to see how the 85 to 1 numbers have come about.” – All of that is true. Not sure what the problem is.

(Troy’s Response) There is not a problem with the statement at all. However, it can be seen as misleading and would be used by the FTC or SEC as a method to show enticement of BAs, based on numbers that are not based on the USA alone, but are a mixture of USA reps, and European customers which did not have much of anything to do with the DubLi Network.

DubLi specifically says on their site at http://www.dublinetwork.com/1-22/e-conomy_booming that “DubLi.com’s select test market in Europe saw 2.3 million customers come in just eight months.” They later told me in an email that “The 2.3 million customers made a purchase in the shopping mall or purchased Credits on DubLi.com.” In less than a year, as a new company getting 2.3 million people to buy something from your site is a spectacular success, period.

(Troy’s Response) I agree that getting that many customers would rock for any of us. However, again their web traffic analytic do not show this type of traffic at all.

I read everything I could get my hands on, because I would have been frontline to Hubert Humphrey and would benefit from my relationship with him and his family. But, each time I reviewed what I read or was told, I could not find the validation of facts to back it up.

Forget the Website traffic for a second. If a company could generate 2.3 million customers in 8 months, logic tells me that there would have been some international and local stories on their success. I went through all the tech blogs I know of searching for anything. I hit every search term I could think of and after hours and hours of research I still could not find any mention by 3rd parties of any company attracting 2.3 customers in 8 months.

- “in reviewing their original P&Ps it is easy to see they are written for USA laws, not EU laws, which seems to indicate DubLi was not focused on building a EU based field force” – This statement is factually incorrect and the correct info could have easily been discovered by asking a few more questions.

(Troy’s Response) I am not sure why you feel my statement was “factually incorrect” I read the original P&Ps from the website and they talked about US postal addresses, and us laws. I am just showing a continued track record of questions.

I have met several of the EU rep force, so DubLi definitely did focus on building the EU first, but yes, they expect the USA to be much bigger. That sounds like logical reasoning to me. DubLi spent many years and a lot of money and effort to create a business and website that would have a global impact for decades.

(Troy’s Response) I agree if I ran a business I would think the US would grow bigger.

- “we should be able to see passed news reports and traffic results to their site to prove the purported results.” – Web metrics companies (like Google or Alexa) don’t measure traffic that comes through “personal home pages.” Most DubLi customers visit dubli.com via a Business Associate’s individual website link (i.e., dubli.com/xxxxxxx). By their own admission, most web metrics companies do not count what they classify as “personal home pages,” which are treated separately if they can be automatically identified as such from the URLs in question, which is the case with any Business Associate’s dubli.com/xxxxxxx link.

(Troy’s Response) You are correct. However the companies do count the hits as “Home Page hits” And they do show where the traffic is coming in from, which will also allow for a metric result for incoming links.

If in an 8 month period a metrics company saw traffic of 2.3 million people hitting one DNS block (forget the URL), it would raise questions. When the research was done, the press would want to know more about how they did it. And the reality is the traffic would be even higher, because the 2.3 number is for customers. So now we have to ask is that 10%, 25% of more of the actual traffic flowing to the DubLi DNS block.

- “within the USA, the distributors have purported monthly incomes of over $100K per month for two of the top leaders by March of 2009.” – In doing my own due diligence before joining DubLi, I saw and studied the back office of one of the top DubLi USA reps, and his income did reach well over that “$100K per month” amount. I saw it with my own eyes. He has said very clearly and without any pretense or attempt to mislead, that his income came from reps buying credit packages, with the expectation that we’ll all release those credits simultaneously at a time in the near future. Also, the other “top leader” who had unbelievable income growth is my sponsor’s sponsor, who made over $99,000 in March. My organization was approximately one-third of that. I’ve seen his income via the internet nearly twice a week for the last 3 months. He’s never lied about it – he’s shown it. You can’t ask for more transparency. Of course, we could just make outrageous claims that are never verified, as nearly every other MLM out there does.

(Troy’s Response) It’s good to know the numbers are true. However, the FTC ruling does not give any ground on internal consumption. So if all this income is earned from the internal consumption, and not from customers who are not part of the compensation plan, I go back to my original statement, that DubLi will not stand up as a legitimate MLM company.

But again, what does this have to do with “Money Laundering” or “federal RICO act” violations? Not a thing.

(Troy’s Response) The concept of Money Laundering (which does fall under the RICO act) is how a company covers illegal gains.

If you have a field force of excited distributors who are buying (but can’t sell) massive amounts of credits; enough to generate six figures in income, then any illegal money you earn can be washed through the system.

The company keeps a percentage adds it to the business side of things to cover shortages in business operations if any, and the dirty money now cleaned goes out as some type of expense, bad investment or to pay off a loan where money was never borrowed in the first place.

Now, this is just one small scenario, I am not here to judge I am here to provide facts, engage thought, and allow people to make an open judgment on if they want to join the company.

Anyone who knows much about web design and programming can tell that DubLi invested tens of millions of dollars to put their website and business in place, to prepare for tens of millions of customers to rapidly hit the site. And if you recognize that, then you probably easily come to the conclusion that they didn’t invest all that time and money just to run a money laundering or elaborate pyramid scheme. Common sense should prevail here.

(Troy’s Response) I would not agree with ‘tens of millions’ but I do agree they invested a pretty penny to make sure the platform was solid.

And even if they invested tens of millions why would you say “they didn’t do it to run a money laundering or elaborate pyramid scheme?” maybe an amateur would not do that, but pros do all the time.

If you get the chance listen to Pres. Obama’s speech this week on cyber-crime and you may change your mind. I deal with Cyber-crime on a daily basis, tracing and tracking different threats, and the pros will invest tens of millions.

I pray DubLi is exactly as you see it. And as I have said many times provide me the documents, and I’ll research each one, then blog the results.

If you’d like to discuss any of this with me, I’m happy to get on the fone with you. I’m just disappointed that this type of “reporting” has been done by an organization that promotes itself as an industry watchdog. I expect this type of “reporting” from shoddy, agenda-driven, soon-to-be-bankrupt, anti-business groups like the NY Times, not from an industry “resource” known as www.mlmhelpdesk.com.

(Troy’s Response) In closing let me state again. The DRA had nothing to do with this report. I did this on my own, then did present it to the Board for review. The report to the Board did not include all the info I presented on the website, but at no time did the DRA indorse, approve, accept, and release any opinion on the DubLi network.

Again, thank you for taking time to respond, and John I have followed your success, you are a solid leader and someone I believe is good for our profession.

I look forward to a continued relationship.

Never Give Up,

Troy Dooly