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Premium Strategies Pty Ltd
(The site contained nothing except the promotional brochure, so I have downloaded it and linked to my copy)
Another betting scam! A few days after I had a telephone conversation with the representative of the crooks running the Foxtab betting scam I received a brochure from another promoter of one of these frauds. Strangely, this outfit has its head office in the same set of serviced offices as Foxtab, and its Melbourne office (seen at right) also shares a desk with the same competitor. Luckily for businesses which run with a lean staff, the serviced office company only charges $154 a month ($77 for the first month) to answer the phone so that you can pretend to have a real office.
[Update: On January 11, 2005, I was advised by the operators of the serviced office business which Premium Strategies had been using that Premium Strategies was about to be terminated as a client of theirs. The company modestly requested that their name not be associated with Premium Strategies in any way. I think this is false modesty, as "We do not deal with criminals" is a useful message to include in any company's set of public policies.]
Another thing that Premium Strategies shares with a competitor is the breakdown of where everyone is at retirement age.
(Amway promoters put it differently when they say "95% of people ... are dead, disabled, or broke at age 65", but the threat is the same.)
Speaking of pretending, the brochure contains an image of a letter from a firm of accountants. The letterhead looks like this:
and the text says:
17th November, 2004
To whom it may concern:
RE: Premium Strategies Pty Ltd
We are the accountants of the above undertaking.
We are of the opinion that Premium Strategies Pty Ltd is currently fully compliant with Current Regulations and Trading Acts. We are able to attest to the sincere objectives of the directors and officers of the company to ensure that such a compliant scenario continues indefinitely.
The company, although recently registered, has set course to achieve ‘ISO 9002 Accreditation’ to provide a clear indication to clients of the company of its intentions in providing first class service now and for the foreseeable future.
It is worthy of note that the predecessor company during its last two years of trading was fully compliant at all times and did not have any issues that required intervention from either ASIC, ACCC, Department of Fair Trading or the Department of Employment.
In summary, we find that reputation of the company to be totally without redress and beyond reproach. Further more, we are able to confirm information contained in this brochure to be true and factual and in no way misleading.
Wallace MacMullan and Betts
Let's start at the top.
You do not have to consider anything more than the deceit of the "accountant's letter" to know that this whole scheme is a fraud and the people running it are crooks. The rest of the brochure contains the standard set of half-truths and lies that one has come to expect from the promoters of these schemes. I was impressed, however, by how the scamsters have adapted the dreams of easy wealth and the exploitation of greed that are used by pyramid scheme operators as part of showing the plan. I wonder if they would show me pictures from Profiles of Success if I invited them around for a cup of tea.
As is my practice, I dumped this scam into the appropriate authorities. My complain (Number 71611774) to the Australian Securities and Investments Commission said:
I received (yet another) brochure in the mail offering great wealth through a betting scam.
The really nice part about this one is that the accounting firm which provided the glowing reference does not exist. There is no "Wallace Macmullan & Betts" listed in the Adelaide telephone book, there is no firm by that name listed on either the ICAA or CPA web sites, there is no organisation by that name listed in the Australian Business Register. The best part is that the person who registered the domain name wmb.com.au, by amazing coincidence, just happens to use the same disposable Hotmail email address as the person who registered the permstrats.com.au domain.
The full brochure is available as an Acrobat file from the scamster's web site at www.premstrats.com.au. Just in case they decide to remove it, it is also available from my site at http://www.ratbags.com/rsoles/comment/premium2.pdf
I like to inform people of what I am saying about them, so I wrote to the scamsters.
The Australian Securities and Investments Commission complaint number is 71611774. Copies of your brochure will be in their hands shortly. I see that your are smarter than Foxtab, your neighbours in the [serviced] offices in Brisbane and Melbourne, and have registered for GST and also included a disclaimer with your "income tax free" claim, so I won't be tipping you into the tax office just yet.
I like the touch of the fake accounting firm in Adelaide. Inventing an accounting firm to say how well your company did before it existed is just the sort of thing that separates professional fraudsters from amateurs. Most of the suckers that you will fool won't bother to check, because they would not think that anyone would try anything so blatant.
Your story will be featured on my web site at http://www.ratbags.com/rsoles/ in next Wednesday's update. The press release about your scam will go out the same day.
Regrets, I've had a few (4/1/2005)
The operators of the Premium Strategies betting scam are not pleased with me. Here is the latest exchange of words:
From: "Dean" <email@example.com>
Subject: Premium Strategies
Date: Tue, 4 Jan 2005 09:32:13 +1000
Before you go and do something your going to regret i would like you to call my office on 1300 135 712 in regards to your email you sent me.There are a couple of things i would like to go over with i.e.. "income tax free".I have in my hands an item that might just help you out.
I am not sure what you are implying by saying "something your (sic) going to regret". I hope that this is not a threat of some kind, but in any case I have already done it. I haven't sent the press release out yet (the one about the last scam I looked at went to finance and business writers at 190 media outlets and I received a lot of positive feedback) but I will get onto it immediately. Your mention of my possible regret will be included in the release.
Two principles I use in business are that I never deal with people with no last names and I never ring anyone on a redirected "1300" number unless I know who I am calling. If you want me to call you, you will have to provide a fixed-line number which can be dialled directly, the name under which that number appears in the telephone book (I will check), and your full name.
Your concern about the income tax implications of your scheme is a bit puzzling, as I thought I made it quite clear in my email to you that the disclaimer in the brochure, as small as the type was, provided a loophole for you to climb through should any of your clients have trouble with the tax office. I assume that you advise your clients that if the income is not taxable then the costs are not deductible.
If you have any information or documentation which you feel may be of interest to me, feel free to fax it to me. My fax number is easily obtained by a small amount of research. If what you want to send to me includes commentaries on taxation matters from your fake firm of accountants that would be even better.
As is my usual policy, your email and my reply will be published on my web site at http://www.ratbags.com/rsoles/comment/premium.htm
I just thought ... (4/1/2005)
Perhaps "Dean" was talking about a horse. Here is the first stanza from "The Man from Snowy River" by A. B. Patterson:
There was movement at the station, for the word had passed around
That the colt from old Regret had got away,
And had joined the wild bush horses - he was worth a thousand pound,
So all the cracks had gathered to the fray.
All the tried and noted riders from the stations near and far
Had mustered at the homestead overnight,
For the bushmen love hard riding where the wild bush horses are,
And the stock-horse snuffs the battle with delight.
Premium Grade Literacy (8/1/2005)
The conversation with the operator of the Premium Strategies betting scam continues, as he tries to convince me that even he isn't confident that a disclaimer in the brochure is enough to get past the eagle eyes of the taxation office. Here is this week's instalment:
From: "Dean" <firstname.lastname@example.org>
Subject: Re: Premium Strategies
Date: Wed, 5 Jan 2005 09:58:01 +1000
knock your self out mate but you should look at EVANS V's FEDERAL COURT and BABKA V's F.C just to name two. If you thought what i wrote to you was a threat you are in dire need of friends i've never threatened or have i tryed to threaten any anyone.
It is difficult to locate the correct court cases when they are not cited correctly. There are no cases versus the Federal Court, although there are cases heard in that court. The Evans case was very hard to locate, as Evans is a common name (a search at AustLII returned 7058 possible cases and decisions), but I was able to locate the Babka case. Its correct citation is "Babka v Federal Commissioner of Taxation (1989) 89 ATC 4963". (It can be found here.)
In Babka, Mr Justice Hill followed the High Court's Martin decision of 1953 (Martin v Federal Commissioner of Taxation (1953) 90 CLR 470), where it was held that someone was not carrying on a business of gambling if the gambler operated without a betting system and placed bets randomly or at whim. In his decision, Hill J said "As I have already pointed out the decision on which horse to bet was one that was made haphazardly and with regard to no hard and fast rules. A bet placed may have been no more than the result of an impulse at the moment" and "his activities were not so considerable and systematic and organised that they could be said to exceed those of a keen follower of the turf". In other words, income from gambling is not assessable for income tax (and the losses cannot be deducted) unless the gambler follows a system and bets according to that system.
I await with joyous anticipation the first time one of the clients of Premium Strategies argues in court that his income from the scheme is not taxable and relies for his argument on Babka and Martin. I assume that your company will provide lawyers to argue on the client's behalf that the income was not taxable because the Premium Strategies system is not a system and the weekly selections are not chosen by any systematic or scientific method but are just "the result of an impulse at the moment". The client might then feel the need to ask what he had been paying for.
At the time I am writing this the Australian Taxation Office's investigation hotline is closed for the weekend, but I will be contacting them next week with the details of this conversation. I should like to remind you that in my original comments about Premium Strategies I alluded to your disclaimer about income being tax-free "Assuming profits are not a sole source of income". As you have opened the door by making the tax implications of the scheme a major issue, I feel it only appropriate that the ATO be brought up to date on what is happening.
I am relieved to know that I will have no need to regret anything. I wasn't going to anyway.
|I just thought of a song!|
|It was something 'bout the brochure. Hey!|
That CPA!, Oh, Deano!
The betting scam was plain to see.
ASIC! Oh, Deano!
Though you'll move on to another scam
There's no regret.
When I have to do the same again
I will, my friend, Ol' Deano.
Foxtab and Premium Strategies (15/1/2005)
I had a conversation during the week with someone from the company which had been supplying serviced office space and telephone answering services to the two betting scam operators which have been receiving some attention around here lately. The lady told me that her company did not want to be associated in any way with such criminal activities (she asked me to remove all clues to her company's identity from this site, and I did so immediately) and she also told me that Foxtab was no longer a client of theirs and Premium Strategies was about to obtain the same status. All those fancy brochures now mean nothing until the crooks can get the phones redirected and some new desks for the telemarketers to sit at.
Speaking of Premium Strategies ... (17/1/2005)
Some messages were left on my voice mail: