I have a long and sordid history with modern snake oil salesmen. They prey on my greed and impatience and I part with my money far too easily and too often. I may have developed a bit of resistance to their hypnotic gaze, but I still sometimes feel that familiar attraction. Every reformed junkie knows what this feels like. It’s like when you take Sudafed for a head cold, but later you feel that slight tingling sensation at the base of your neck, the slight sting up in your sinuses as the pseudoephedrine hydrochloride goes to work. You remember all of the pleasures of meth and none of the negatives.

The same seems to apply to the con and scam artists of the internet. Recently a paid SEO/Internet Marketing forum I am a member of had an interesting discussion about the new feature article posted over on The Verge. Someone linked to it and asked for people’s opinions. The first several responses agreed with the author while mentioning that they were uncomfortable that the author had lumped *all* internet marketers in with the true scum. But then several people chimed in to defend some of the major personalities attacked in the article! Even the original poster defended them to some extent.

I made a feeble attempt to point out what I thought was obvious, but it was to no avail and I ended my participation in that thread with a lame “we’ll just have to agree to disagree” type of post.

Today someone in that same forum linked to a recent article from Leo Dimilo on his newer Drunk On Life blog – Confessions of an Internet Marketer. It’s a great read, and it confirmed much of my recent thinking about my future direction in online marketing. It starts with a question:

Q. What’s the most dangerous thing a marketer can do?

A. Grow a Conscience

And that is the main problem I have with the hucksters mentioned in the Scamworld piece. Even those that my fellow internet marketers were defending don’t seem to me to have much of a conscience. Some of this can legitimately be seen as a grey area. After all, aren’t all voluntary transactions between consenting adults technically both legal and amoral?

As I was reading and thinking about the topic, I was reminded of a time when I myself would have defended this type of person. I understand the reasoning. You buy an overpriced, hyped product from someone, you feel the need to justify it. If said product has helped you to make some money, often that is justification enough. Just don’t develop a conscience about it and start thinking about the cycle you are in. Don’t dwell on the fact that you are purchasing a product that, for example, shows you how to make money by teaching you to how to sell their product to other people, or teaches you how to separate the naive and desperate from their money. This type of ‘circle-jerk’ cyclical Ponzi scheme of marketing is the modus operandi of most of those exposed in Scamworld.

And then I remembered her. That lady. The one I took advantage of just to line my pockets with cash.

Of course I don’t remember her name, or really even her face. That might personalize things a bit too much. But under the guise of ‘helping’ her I instead took advantage of her desperation and naivety, pocketing a wad of cash in the process.

The product line I had bought into here was Ron LeGrand’s ‘Cash Flow Generator’ which was basically a few binders and CD’s with information and forms all about making a fortune in real estate. Most of the information was outdated, but some was still relevant and worked. We went all in. I believe that by the time all was said and done, we had attended two seminars (we flew to one in Nashville), bought two or three packages of info and ‘invested’ around $9,000.

The techniques were all ‘grey-hat.’ We pushed the edges of morality and legality. And after many stops and starts, I unfortunately got a bite. I contacted a woman who was selling her home. As it turns out, she had gone through a divorce and was being drained by the mortgage payments and just wanted out. The house needed some work. By this time I had begun partnering with a couple of remodelers and used their main contractor to give me an estimate. He agreed to buy the home for a certain price.

The home owner at some point had told me what she owed on the home, and I made an offer that would give her enough room to clear maybe $1000 after fees. I used some techniques common in the sales industry when I made my offer. Specifically, I told her the amount, then I shut up. She spoke first, voicing her hopes that she would be able to make more on the house. I said something like “Yeah, I know” and nodded my head. I waited her out. Eventually, she agreed and signed my form, an assignment of contract. She assigned to me the right to the home, but I would then turn around and assign the contract to my contractor. This is what is referred to as ‘flipping’ a home.

A couple of weeks later all of the paperwork was in place and I went to the title company to sign my part. My title agent told me the funds should clear by the next day. When I went back to pick up my check I got a bit of a lecture. The title agent, a wife of one of my real estate breakfast buddies, scolded me a bit and told me it was a good thing she liked me. As it turns out, my contractor had assigned *his* contract to another investor that he knew, who in turn assigned it to yet another person. Five different parties had come in and signed, with the final person taking ownership. I didn’t care. I walked away with a check for $14,000 in my pocket.

At this point in the tale, I could (and did) tell people that my investment in Ron Legrand’s Cash Flow Generator was worth it, and that I had more than made my money back on it. His real estate investment schemes could then be seen as ‘legitimate.’ Technically true, but that didn’t stop Ron from attempting to get more money out of me. I was a bit surprised one day to get a postcard from him, telling me about a way to make even *more* money than real estate. It was easy. All you have to do is … (wait for it) …

Host a real estate seminar!

I should have seen the irony. He was telling me that he made more money by selling me a seminar package than he did by actually following the instructions in the seminar package. And the same can be said for probably 75% of all informational products out there, especially the high-dollar items.

Unfortunately the irony was lost on me, and my profitable status didn’t last long. The contractor in that deal is the same contractor I had become involved with while doing some partnership remodeling deals with a couple of other real estate investors. These guys weren’t snake oil salesmen, they were better than that — straight up old-school con men. By the time all was said and done they had caused me to deplete my meager retirement fund and any other profits I made elsewhere, max out a couple of lines of credit and eventually forced me into filing a half-million dollar Chapter 7 bankruptcy.

That karma sure is a bitch!

It was a painful learning experience, but I would like to think that I won’t have to learn it all over again. It is a major reason why I find similar types of pitch men to be distasteful. And yes, when it comes to internet marketing I would put Frank Kern, Anthony Morrisson, Mike Filsaime, John Paul Raygoza and Jeremy Johnson all in that same bucket with Ron Legrand, Carlton Sheets,  and Robert Kiyosaki and all the other real estate ‘gurus’ out there. Snake oil.

The age-old debate here often comes down to motivation. One side points out that if these people were making such good money in real estate or internet marketing, why would they need to sell a ‘system’ to others? Wouldn’t they be creating competition? The other side often points out that these people made legitimate money on their own and are now helping others as an extra stream of income, something that is smart. They also assert that there is plenty of room for competition without hurting one’s own market.

I beg to differ – most of these scammers started making money by selling their system on how to make money. Ron Legrand’s background is in working the skeeball tent at carnivals. Kiyosaki is harder to pin down, but John T. Reed wrote quite a lengthy expose on him.

So yes, as someone who has been working the system in Internet Marketing, I have a problem. My conscience is waking up, and it’s getting harder and harder to justify flirting with the edge of the grey. Coincidentally I have been working on doing something somewhat like a normal business — creating and selling my own product! For now, mainly some short memoirs to be sold on Amazon. Unlike most internet marketing products, these will be in the NON-fiction category.

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For more information on the real estate gurus like Ron Legrand, check out John T. Reed’s excellent Real Estate Guru Rating page.

More on Legrand’s recent charges brought by the SEC.

For more information on the scammers in the internet marketing arena, check out the silliness over at the Salty Droid.