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My Brush With A Pyramid Scheme – How To Spot The Signs Of Multi-Level Marketing (MLM)

Muli-Level Marking company?

While at a Starbucks at Victoria Park and the 401, I came across, Kash Shahzada. He seemed like a very nice fellow, dressed well. He did not appear to be working at one of the nearby office buildings at all. Actually, while I glanced over to him, he had a book that said “How to deal with people” or something to that effect. The book was sitting in a fold up style of duo-tang that had more papers, possibly brochures. Hard to tell, I just glanced over. The truth is, you can tell so much about a person just by observing. I should listen to my observations more.

Kash’s profile picture (at the CN Tower)

You have to know, I wasn’t really paying all that much attention to Kash, I had been sitting on a chairs crunched up in the corner and that chair was painful on my back. When a couple chairs that were more comfy opened up, I just at the chance to sit there. Kash started up the conversation by asking me about my laptop. “Do you like that type of laptop?”. Off to the races I was with talking. I really don’t talk to too many people in coffee shops, so this was a real treat to spark up a conversation there. I did spend allot of time talking about myself. maybe too much.

In between my talking, Kash would talk about how he was involved in Network Engineering, that he went to school for it and that it didn’t really pan out. He decided then that he would become an entrepreneur. What was interesting was that he didn’t have a whole lot to say about his company (one of the first warning signs that something was fishy).  While he talked about his line of business, he would talk about how he was a “marketer” and that he did “business marketing”. Kash talked about how his company used “the social networking” to reach clients and that it was very successful. I was kind of in this gray area, nice to meet someone self-employed, yet a little confused with what he was talking about. He was getting his business card primed and ready.

We exchanged cards. The one he gave me looked good on first blush, but it took me a few seconds to determine the more interesting red flags about the company. Here was his card:

The Kash Enterprises business card

Business Card Red Flags
1. The company name in bold KASH ENTERPRISES – this appeared to be named after him, and yet still called an “Enterprise”?
2. The moniker “I-Commerce Business Solution”  – foregoing the typo, really what does this mean? It really seemed like a fancy way of looking technical but meaning nothing.
3. Lots of phone numbers, US numbers, Toll-Free numbers. Why all these phone numbers for a business that I still don’t know anything about?
4. Lastly, his email address’ domain name did not match up to his web site’s domain.

This was all kind of happening as I was meeting Kash. He was a very nice guy, very affable. While I was chatting with him I turned and quickly reached over to my computer and typed in his website. I still didn’t know anything about his business. but I was curious. I was met with this to start with:

I was thinking “Wow, I’ve never seen this before – what was so important that it has to be protected by a password?”. I even asked him. His response was something to the effect of:  “The business intelligence we offer is highly sought after, so we protect it”. On the back of his business card he wrote the password to access this website: guest. Our conversation kind of ended abruptly, so I left it at that. I had to get moving myself, I was late to meet a friend.

The next day comes and I thought, I’m curious what this is about and I why I need to login. Let me take a closer look. I went to the site and was presented with the following video when I first logged in. Go ahead and take a look:

Of course, not really realizing, I included my real information. Somewhere in the time from of 2 to 3 hours later I got a call from Kash himself. His first question was “how the laptop doing”? He said that he had noticed that I logged into his site and wondered if I had questions about the content, what it was about. I clearly said I had no clue what it was about or what it was. I could hear noises in the background and the call ended shortly after that when he said he was about to be in a meeting. He requested the ability to call back and I said OK. This had me really intrigued – it clearly smelled of a pyramid scheme, that was that. But, I’m a curious fellow – I really needed to know more about the seeming contradiction of Kash’s personality and more about how this company works.

The Man
searched to find out more about Kash Shahzada personally. I found all sorts of information:

1. Twitter –  http://twitter.com/Kash_Shahzada
He seemed to have given this up in March. I noticed that he had been in contact with the @ltdhq account quite a bit. He references a number of sessions or meetings. From what I could tell, Kash did not seem to be a social media expert based on his Twitter account usage and fall-off.

2. Linkedin – Note: Link was no longer active.
His Linkedin profile lists this as his occupation “I own a business system that coaches and teaches individuals how to create Passive income through Social Networking.”. It also says he’s been running Kash Enterprises for 7 years, 9 months. I also found another profile, one that Kash probably intended to delete at some point that lists his occupation as this: “I am part of LTD Team. We teach and train people in how to live a Rich LifeStyle. Self improvement is at the heart of LTD.”. In both cases the industry listed is “Marketing and Advertising”

3. The kash-ent.com website – http://kash-ent.com (login: guest)

The page’s top banner area lists information about the company. “Building People to Build Families to Build Businesses”. I thought, what does this mean exactly? Boy was this confusing. One thing, however, was clear that whomever wrote this was not in command of the English language. The equation below “Time + Money = Freedom” is fine although really money is what generally equals freedom. I’m still confused.

The info provided on his website was also interesting. The address given seemed like the Center for Early Learning, though it’s possible this could be an apartment building. He lists his direct blackberry email address (again, suggesting that he’s not overly familiar with social media). During one call, he did mention that he lived in Scarborough. When I looked up his domain on who.is – I found the answer in his administrative contact:

Kash-Domain

An Apartment? Is this a person who has been selling rich lifestyles for close to 8 years and yet lives in an apartment in a somewhat skeevy area in Scarborough? I was really curious now. What in the world has brought this seemingly nice guy a business that clearly seems not to work.

Note: This post has been updated to remove personal details. For more on that, see this column.

The Company
While searching for the above video, I cam across the fact that the kash-ent.com site simply redirects to a placeholder domain on the ldlteam.com domain (see below). Who was ldlteam.com?

It turns out ldlteam.com is the domain of a company called Leadership Team Development – I then searched for more about Leadership Team Development:

1. A Blog that describes LTD as Quixtar and Amway – he goes on to explain the “The Perils of joining LTD, Quixtar, or Amway”. There is allot of talk about religious undertones of this organization.

2. I found an interesting answer at answers.com. What was most interesting was the comment: “I got more information on how to recruit people to give them $200”. Recruiting people for $200? That sounds allot like a pyramid scheme. Lots of other details line up with what Kash mentioned to me, including the McDonald’s reference.

3. I found some very interesting complaints about the company, one such post sizes up the opportunity well:

LTD is supposed to be a web-based business, but it was clear that the speaker does not understand how eCommerce works. LTD’s business model appears very weak, and requires constant recruitment to maintain any kind of cash flow. They create ‘alternative’ websites for companies to sell products, but why would a company need them? If a company can sell a product from its own online store, it makes no sense to pay someone else to sell it for them.

4. Searching google for the domain of ltdteam.com shows how many “enterprises there are (total of 909 pages referenced by sub domains). Each one of these sites were based on the same template, allowed login by way of a password of guest and included the same structure, the same description text with few variations, and videos. Also, included no information about the business itself.

5. Finally, I took my search to the Better Business Bureau – here is where you will find a clear rating of “F”.

More Communication
We would talk at length by phone for a few days. I was really after answering one BIG question “You seem like a nice guy, why get involved in this?” – but the asking of this question is very tricky. In the beginning it was made clear that they (LDL, I presume) were interested in cutting off those not interested (IE Sane) people while retaining those excited about the opportunity. Fair enough, so he was slightly skittish, so I tried to ease into this. In the process I had a number of questions:
Me: “What do you do?”
Kash: “I’m a franchisee and also a franchiseor” “Take the McDonald’s franchise structure as an example”
Me: “Do you charge franchise fees?”
Kash: “No, we are Private Franchisers”
Me: I pressed him for What Products they sold
Kash:  “Health and Wellness – Nutrition – Skin Care Products” “We are not product specific”
Me: “How do you make money doing this”?
Kash: “This is not a money making proposition as much as it is a lifestyle proposition. I make money off of volume”
{click} DISCONNECT

Me: “You mentioned earlier that THE COMPANY gives you this support structure, who or what is the company?”
Kash: “Have you ever heard of Amway?”
Me: “Who is Learning Development Team, or whatever it’s called” (I tried feigning ignorance)
Kash: “They are the support company, much like Burger University and McDonald’s”

I asked him about the disparity between his McDonald’s example (at the mcdonalds.com website they talk about a product – fast food) and his website (kash-ent.com has no mention of health, wellness, or health care products).
Kash: “Again, none of this is product specific. We are selling the business model”

Me: “How Long have you been doing this?”
Kash “Seven Years”
{click} DISCONNECT

We would get cut off mysteriously a number of times during he course of our conversation.

I finally asked him the big question: “Why”
Kash: “For security, financial security, security for my family – to live the lifestyle I want to live”

At the end of talking for more than an hour off and on. Kash finally said “Kevin.. can I call you back? Can you give me a call if your interested? It’s been more than an hour and I need to eat something”. That was the end of our conversation and presumably the last time we would speak.

What had me fascinated was how this role is played out by him – how his job seemed to be to intentionally keep the details light and confusing. It occurred to me that if this cycle of “Confused? Get more details here” keeps moving then it would allow him to get my eyeballs in front of the people who can REALLY sell the product (at the info session). In all of the buzz-words Kash used, the most interesting of them was the liberal use of “lifestyle”. Kash really seemed like a nice guy – I wanted to help him, but didn’t know how to do it. What makes people turn off the “bullshit meter” and get involved in these things?

I’d love to hear more about your own experiences with this, good or bad. Am I wrong to consider this a pyramid scheme?