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$150 Plasma TV Matrix Site Faces Lawsuit

from the disgruntled-customers dept

Back in January we had an article about the growing trend of “matrix” scam sites. These are really pyramid schemes, where people pay $150 for some useless junk for a chance (if enough people join under them) at getting an expensive plasma TV or other hot deal. While you might think that the FTC might shut such sites down for being illegal pyramid scams, the latest challenge is actually from a disgruntled customer who wants his money back. He’s not claiming the site is an illegal pyramid scam, but rather that it’s an illegal lottery. While I have no sympathy for the folks who run such sites, I have even less for those who fell for it. The guy had all the information to know that he was never going to get his “reward” from these sites – and yet he still bought into five different ones. Now, after demanding his money back, he’s trying to create a class-action lawsuit, saying they’re running illegal lotteries since the results are left up to “chance”. Of course, I would think that’s easy to defend against, since the results aren’t up to “chance” at all. They’re dependent on how many people join the pyramid scheme beneath you. So, yes, if you understand basic math, you would know it’s a scam and not to join – but that doesn’t mean that it’s a “lottery”.

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Comments on “$150 Plasma TV Matrix Site Faces Lawsuit”

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Anonymous Coward says:

first exposure to ponsi schemes...

…was in college. A house mate named Fritz solicitied my participation in a scheme called “Airplane” (quite remarkable the graphics on the site listed on the other comment is an airplaine). Perhaps it was the fact that I had exposure to descrete math courses, but I declined. Amazingly Fritz was a “school of economics and business” major. I later found out that Fritz also had a coke problem… which kinda’ explained his weird, ertatic behavior, bad ideas and quest for easy money.

Personally, I can’t think of anything more pathetic than an econ./bus. major with a coke problem. It’s like tatooing “born to lose” across your forehead.

Tim (user link) says:

Re: first exposure to ponsi schemes...

I read the above posts, and I understand your questions. I am the person in the article. The fact is that the article does not explain the depth of the case. You will need to read it. The law suit document declares that this recent matrix-site phenomena IS a pyramid. However, the suit reaches beyond that allegation and speaks about illegal lotteries. One thing the article also didn’t mention is http://www.matrixwatch.org, an internet watch-dog site on matrix-company practices. You can download the law-suit there to print out, or read online. I will not be on this forum much, so you will need to contact me through Matrix Watch.

Tim (user link) says:

Matrix Watch

MatrixWatch.org was created to foster an online community of people who want to see the matrix sites have their “day in court”. I offer the recent law suit against EzExpo to download, and I answer questions about the law suit and misinformation from the matrix sites. I filed the recent law suit, and there are reasons that we pursued the illegal lottery charge. We do address the pyramid issue.

eno narden says:


a lottery is not defined by a general idea that you or I may have. a lottery is something that has an exact definition in the law. Like a variable in programming, or an array. There may be some discussion about whether or not one condition or another has been met – but not as much as you might think. It can be very puzzling at first because we know the word lottery in one context and we don’t realize that this is a specific example of one kind of lottery. A lottery is the name of the general case. A lottery is defined to have three elements- this isn’t from your idea or my idea, a lottery has a definition just like a triangle has a definition. Three elements and it’s a lottery.
1) consideration – what you put in. the price of a lottery ticket, for example, the entry fee, or in the case of the “matrix” the money that you pay to enter. The fact that you are told that you are paying for “ebooks” and other junk that you didn’t come there to buy – that you wouldn’t want at a much lower price – that doesn’t, not for one moment, turn it into anything other than “consideration”. Pyramids have been trying to use the selling of all kinds of small items that don’t have the actual market value of what you pay to enter – for years. Doesn’t work. It isn’t decided over a beer in your living room. It is a precise concept that is easy to determine. Would you pay $235 at Gotmatrix.com for those ebooks without the “prize” being offered? more importantly – which makes it into “consideration” with no questions or argument that can work – again, not done over the phone at 2AM with a drunk friend who uses the word “liberate” when they mean “theft” – would they sign you up for the “free” giveaway if you didn’t?
Oh, by the way, ever heard the term “no purchase necessary” on the radio or TV when they’re promoting a contest at Wendy’s or any other place? They aren’t just being nice. If they require you to buy a hamburger or anything else, they’re running an illegal lottery.
2) prize – that’s easy. The thing that you get if you get to the right point in the standing. The plasma TV, the computer, etc.
3) chance – here’s the thing that you are having a bit of trouble with. Chance just means this: you don’t have a precise way of controlling what other people are doing to sell more junk to change your standing in the “matrix”. You bring in ten people – fine – but what control do you have over how many they bring in? Therefore, from your perspective – once you pay your money – it is a matter of “chance” when or how you “get paid”. You are not going to know enough about when and how you are getting your prize nor are you going to be able to control it. It is thus just like any other lottery. Plus, I can’t say because I don’t know – but I really can’t imagine that you could trust anything they tell you about where you are in the standing. Do they have some verifiable accounting by a trusted (by you and me) third party? Why would you believe the number that they give you – they are the only ones who will ever know the truth. That alone should tell you how “chancey” it is.
If you run one of these, sooner or later you will – if you are fortunate – get a letter from a state attorney general informing you that you are running an illegal lottery. you will fume and sputter, and have a beer with your friends and argue like a child about what you think a lottery really is, and then, if you’re lucky, you will refund everyone’s money and pay a fee of some type and agree never to do it again. If you’re lucky.
In case anyone wonders why these are illegal – aside from the fact that there is a law against them for the following reasons (recursive, I know) – it goes like this.
Here, for example, we might take a “matrix” of 15. At the 15th person, the first gets a G5. At the 30th the second person, at the 45th the third person. So for any person at a point in the list you can know that 15 *(number in the list) people will have to buy in for that person to “get paid”. Now, that 45th person wants a G5 also – no? I mean that’s why they’re doing it – not so you could get one… For that 45th person to get a G5, it will mean that there must be a 15*45=675th person, who will have to wait until the 15*15*45 numbered person signs up – that person will have to wait until the 15*15*15*45th person signs up, who will want one of their own – which will happen when the 15*15*15*15*45th person signs up – are there enough people in the world for everyone to get a G5? No, because the last generation – always the largest – won’t be able to bring in any more people. For that last generation – which will happen very quickly if it were to keep going – but of course it won’t, we know that,- every rodent on the planet would have to come up with $235 then every protoplasm, then every bacteria. It means that a “matrix” is a large swindling life form. It comes to life, builds a little bit, and cheats everyone at the end. And there must always be an “everyone at the end”. So it is a scheme to defraud a lot of people and there will be many unhappy people at the end – which will come fairly quickly. As for whether or not the group running it makes a profit – that last group – notice they don’t get any G5’s? Yeah…. that’s where the profit is. It isn’t from 15*235 – (cost of G5) = profit. that’s part of the fraud. They could lose money on that as long as they needed to – but that last big generation – that’s all profit. all profit. Fraudulent, swindled, criminal profit. That’s inevitable.

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