Noted MLM expert Robert FitzPatrick did a recent blog post on the YourTravelBiz.com lawsuit filed by the California Attorney General. He has a nice analysis of how and why YTB is nothing more than a pyramid. These multi-level marketing companies are almost always the same, they each just have a different “hook.” In this case, the hook is travel services, although according to the company’s own numbers, very little travel is actually sold. (That’s a clue to it being a pyramid scheme… Little “real” business done, in favor of instead selling a dream and recruiting with that dream.)

Here are some interesting statistics and analysis from Fitzpatrick:

My next book, Expert Fraud Investigation: A Step-by-Step Guide won’t be out until February 9, 2009, but it’s already on Amazon.com and available for pre-order.

From the product description:

A fraud investigation is aimed at examining evidence to determine if a fraud occurred, how it happened, who was involved, and how much money was lost. Investigations occur in cases ranging from embezzlement, to falsification of financial statements, to suspicious insurance claims. Expert Fraud Investigation: A Step-by-Step Guide provides all the tools to conduct a fraud investigation, detailing when and how to investigate. This guide takes the professional from the point of opening an investigation, selecting a team, gathering a data, and through the entire investigation process. Business executives, auditors, and security professionals will benefit from this book, and companies will find this a useful tool for fighting fraud within their own organizations.

Don’t just take it from me and from Dave Ramsey. We think the mortgage accelerator program sold by United First Financial for $3,500 is a waste of money. We’re pretty smart, but are there other smart people who agree with us? YES!

Jack M. Guttentag is  Professor of Finance Emeritus and former Jacob Safra Professor of International Banking at the Wharton School of the University of Pennsylvania (one of the world’s best graduate finance programs). He is the former Chief of the Domestic Research Division of the Federal Reserve Bank of New York and formerly on the senior staff of the National Bureau of Economic Research. Jack says:

The Milwaukee Journal Sentinel ran this story a few days ago, and it’s just so indicative of the mismanagement of the district from a financial standpoint. No one in the private sector would get away with wasting billions of dollars and not be held accountable. Yet the district will again spend almost $1.2 billion or almost $14,000 per child. And not be held accountable.

Here’s the latest demonstration of ineptitude. Back in 2000, someone had a reasonable idea: Let’s get children back into neighborhood schools instead of busing them all over the city. We’ll save money because of reduced transportation, and we’ll have students in schools in their own neighborhoods… investing families in the neighborhoods and hopefully improving the city.

The cost of the Neighborhood Schools Initiative? $102 million. Add the interest on the debt used to pay for the program, and it will cost $175 million.

Back in April I told you that Usana Health Sciences (NASDAQ:USNA) would be rolling out a new “energy drink” at their annual convention:

The new product is an energy drink. Apparently, studies by Usana show that you could get a bigger kick from a cup of coffee, but they are counting on the cult mentality to sell the product. Usana-heads will believe management… If they say it gives you energy, then by golly, it gives you energy!

The details are set to be released to the sales force at the convention next week, but here they are…

For those who aren’t local to Milwaukee, Eugene Kane is a columnist for the Milwaukee Journal Sentinel who writes about racism. No matter what happens, it’s always motivated by racism.

The debate about light rail has been going on for years. The bottom line is that it won’t work for Milwaukee. It’s too expensive, will have too few riders, and won’t have enough reach to make it worthwhile. But in Kane’s world…

Frankly, the resistance to light rail has always seemed to me motivated by concerns other than economic ones, particularly the potential for residents of the central city to access suburban locations where jobs are more plentiful. In Milwaukee, the anti-light rail crowd often seems more intent on limiting, rather than expanding, the ability of inner-city residents to find jobs.

Who knew that people were against light rail primarily to keep inner city (black) people from getting jobs in the suburbs? A grand conspiracy, indeed!

Probably the biggest single lie told by United First Financial “agents” is that you can pay off your mortgage faster than scheduled, with no change in your spending or lifestyle. That sounds too good to be true, because it is.

Simple math debunks this claim. Think about it. If you’re currently paying $1,500 a month on your mortgage and you’re scheduled to have it paid off in 30 years, how would you pay it off earlier? The only possible way to do that is to pay more than $1,500, right?

How much does it cost to get Mark Shurtleff, Utah’s Attorney General, to lie for you? Apparently only $5,000. What a bargain!

Today Sam Antar has an enlightening piece on his blog, entitled “Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne Pays Utah Attorney General Mark Shurtleff to Defame a Blogger.” It details a situation in which a $5,000 Overstock.com campaign contribution to Shurtleff was followed immediately by public lies by Shurtleff. And there’s plenty of evidence to support the claim that Shurtleff blatantly lied.

Usana Health Sciences (NASDAQ:USNA), the company that founder Myron Wentz wanted to take private for $26 or $28 per share, just provided a tidy little profit to the Wentz Family. And not at $26 or $28 per share, mind you. They ran off with between $35 and and $36.38 per share.

Gull Holdings is owned by Myron Wentz, so he got more than $4.5 million of the loot. Tax free, of course, since Myron renounced his U.S. citizenship and now calls himself a “citizen of the world.”

It seems like the family thought it was a good time to cash out some of their stock, now that they’ve gotten a break from allegations of fraud by Barry Minkow.