I constantly marvel at how multi-level marketing (MLM) can continue to lure in millions of people a year, who collectively pump billions of dollars into these losers. Time and again, industry experts calculate a failure rate of 99% (failure = losing money on the deal) … And still consumers line up to sign up for these things.

Even the COLD HARD FACT that they have almost no chance of turning a profit does not deter them. Stop and think about it. These people have less than a 1% chance of turning a profit in MLM, yet they still sign up and pay hundreds or thosands of dollars each into these recruiting schemes. (Schemes… because the name of the game is signing them up and getting their money via fees to join and/or inventory purchases.) Consumers have a better chance of coming out ahead if they simply put their money on a table in Vegas.

Guest post by Joe Taxpayer

As I looked at multiple United First Financial agents’ sites, I found the common thread was the claim that one simply can’t do this on their own, that the shifting of funds from a checking account, to a HELOC, and then to a primary mortgage somehow needed such a level of sophisticated computer analysis that it was beyond the average consumer.

But let’s dig a bit deeper to understand what savings may or may not be possible with the UFF Money Merge Account. In the classic MMA example (i.e. the one appearing on or linked from most agents’ sites) we are looking at a 6% fixed rate mortgage, and $5,000 in net monthly cash flow.

Welcome to the September 29, 2008 edition of carnival of fraud. We’re a little skinny on submissions this week, as I messed up the posting dates…

Allen in Fort Worth presents Have you paid off your Subprime Mortgages? posted at The Whited Sepulchre, saying, “why are taxpayers having to co-sign for fraudulent mortgages?”

Sara Goldstein presents Bargain Queens scoop Elle magazine posted at The Bargain Queens, saying, “Copying, inspiration or coincidence? Make up your own minds…”

Tracy Coenen presents Mark Cuban’s idea of a private bailout of the financial sector posted at The Fraud Files Blog, saying, “An idea with a lot of merit…. too bad lawmakers would never go for it.”

That concludes this edition. Submit your blog article to the next edition of carnival of fraud using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: carnival of fraud, blog carnival.

From the “how many ways can we waste taxpayer dollars” file…

Daniel B. Kapustin has filed a complaint with the state’s Government Accountability board about the September 9 elections held at Christ the King Lutheran Church in Delafield. City buildings are under construction, so the church is the temporary polling location.

The impetus for the complaint? Church members were handing out coffee and cookies to voters. He says that means they were trying to interest voters in joining their church. City Clerk Gina Gresch says they had permission to do it, were not electioneering, and were more than 100 feet from the polling room.

Advice to Kapustin: Don’t stop at the table and accept the coffee and cookies.

Mark Cuban has an idea: Let’s scrap this government bailout of the financial sector and instead make it private. Create an Exchange Traded Fund (ETF) that buys the distressed securities these companies want to get rid of, as well as all warrants and shares of stock in the companies themselves. Investors choose whether or not to put their money into the fund and Mark is  offering up $50 million of his own funds to invest in such a plan.

Tonight the Milwaukee Public Schools board met to discuss the possibility of dissolving the district. The consensus is that they can’t do it.

But the sheer ignorance is stunning. The sound bytes from board members went like this: “The problem is the funding formula. We need to fix our funding.”

Wrong! The problem is the spending. The district is wasting nearly $14,000 per child. It’s wasteful because children aren’t being educated, and because the amount is excessive.  That’s not a funding problem. That’s quite simply a spending problem.

This whole “bailout” of the financial sector bothers me. It bothers me that as a taxpayer, I will be on the hook for a nice chunk of the $500 billion to $1 trillion that this will cost. (And the way things are looking, the cost may be closer to $2 trillion.)

It bothers me that executives on Wall Street got multi-million dollar bonuses and perks in recent years, but now they don’t have to share in the downside of what they’ve done. (What they’ve done is made a ton of bad loans to parties who weren’t credit worthy, and then they engaged in a series of selling those loans by lying to the buyers.)

The Wall Street bailout, publicly estimated to cost taxpayers somewhere between $700 billion and $1 trillion or more, could end up to be bigger than we ever imagined. Now added to the bailout plan: student loans, auto loans, credit card debt, and other “troubled” debt.

The Washington Times reports:

How much money would it take for you to agree to sleep on a wet matress for 59 days?  The mattress keeps getting wet over the 59 days, so it gets a little moldy and a little smelly. But would you do it for $295,000?

A Wisconsin prisoner was just awarded $295,000 by a jury for that exact thing. Reggie Townsend is in prison with a 23-year sentence for killing an 11-year-old girl when firing a gun throughout up a neighborhood one night.

Welcome to the (late) Carnival of Fraud..

• Wenchypoo presents Word of the Day: Decadence posted at Wisdom From Wenchypoo’s Mental Wastebasket.
• Sam E. Antar (former Crazy Eddie CFO and a convicted felon) presents Overstock.com (NASDAQ: OSTK) CEO Patrick Byrne Pays Utah Attorney General Mark Shurtleff to Defame a Blogger posted at White Collar Fraud.