This week Barry Minkow and iBusiness Reporting did a comparison of the business models of Pre-Paid Legal Services Inc. (NYSE: PPD) and the Take Shape For Life division of Medifast Inc. (NYSE:MED). Pre-Paid Legal is being investigated by the SEC, and Barry wondered how the compensation plans of Pre-Paid and TSFL stacked up. The obvious question is whether Medifast could eventually face the same scrutiny as Pre-Paid Legal.
It seems that the SEC investigation of Pre-Paid Legal has focused on its stock buyback program (this is how executives and insiders get rich) and how the company is marketed. They also asked for data on membership statistics, so this could open the door to evaluating whether the practices of the company are like a Ponzi scheme.Continue reading
A report on Prepaid Legal by expert Robert FitzPatrick, nationally recognized by both law enforcement and the private sector, where he concludes:
“Pre-Paid Legal Services Inc. is not a direct-selling company but a bogus ‘business opportunity’ scheme in which money is transferred from hundreds of thousands of consumers who are falsely lured to invest time and capital, only to inevitably lose money and quit the scheme year after year, to the benefit of a handful of company owners and recruitment promoters. Pre-Paid Legal is an ‘investor Ponzi scheme’ in which funds gained from the fleeced consumers are also used to manipulate Pre-Paid’s share price which further enriches a handful of company owners at the cost of the company as a whole.”Continue reading
PrePaid Legal boasts their “legal services plan.” The truth is that very few legal services are ever provided under the plan. If you have a criminal case, contrary to what you’ve been told, the plan is useless. You are told that you have something like 60 to 300 hours of “free” legal services.
The truth is that those hours are for trial only. All the legal maneuvering up until then? You get 2.5 hours. That’s next to nothing. You will need hours of services before the trial that you will pay dearly for.