The End of FreePay - ToS Changes Limit User's Ability to get Prizes

FreePay (formally known as Gratis), a company that offers to give away free gifts to individuals who sign up for a unique matrix type of offer, has changed their terms of service to limit the ability for it's users to receive gifts. The new terms of service force users to complete all the requirements within 90 days of first signing up, then wait another 30 days to fill out a form that must be mailed in to them to be verified. Previously, a person could sign up and take as long as they like to finish the requirements to get the free gifts.

The site works through a referral system where an individual signs up to the site and then they must complete an offer and then sign up a certain number of other people under them and also complete an offer to qualify to receive the free gifts. The offers are normally trial offers for things such as DVD rental services, dietary supplements, credit cards, phone offers, and etc. Freepay makes money when a user signs up for one of these offers and they are in turn paid a commission by the company.

Some people would consider this to be a pyramid scheme, but it technically isn't. This is because once you finish your requirements you are no longer obligated to do anything else with the web site. Where as a typical pyramid can go on forever, keeping people signed up in downlines that continue in a pyramid type fashion, matrix type sites work by only allowing the individual who signed up under the original referrer to be included in the first downline. For example, Jane signs up for FreeMiniMacs.com, then Jane asks her friend Joe to sign up under her. Jane completes her offer and then Joe completes his. Now, Jane needs 9 more people to sign up under her and complete an offer ("go green") to get the Mini Mac. Joe needs 10 people to sign up under him and go green so he can get the Mini Mac. Anyone who signs up under Joe will only go towards Joe's credit for the Mini Mac, and not Janes.

Because the amount of commissions that FreePay earns when people sign up under people is going to be less than how much the gift is worth they lose money when someone completes their obligations to receive the gift. In order for Freepay to stay in profit and not lose money they count on people not being able to sign up enough people under them and give up on signing up people under them. Using the example above, if Jane can only get 5 people to sign up under her to get her Mini Mac and gives up, then FreePay will have made money off Jane and the 5 people who signed up under her, and doesn't have to send out the gift. However, matrix programs, similar to pyramid programs only work if they continue to sign up new members who keep infusing the system with cash and don't have to pay out as much when people give up. In both setups, the bottom can fall out if the company is paying out more than they are taking in and that seems to be what has finally happened to FreePay.

FreePay has always been seen as the staple of the free sites as they have usually had the lowest amount of complaints and have continued to ship out prizes when other sites have fallen apart quickly. They have also maintained a good selection of offers for users to complete that aren't extremely expensive or not interesting as some sites have done. Unfortunately with these new changes in the terms, users will be limited to being able to complete the sites as they only have 3 months to find the specific numbers of people to sign up under them and complete an offer. This extreme move by FreePay is seen as an obvious sign of their downfall and has caused many people in the free site community to think twice about starting their sites.

Important Change to Terms & Conditions

This email concerns an important change to the Terms & Conditions for [SiteAddress].

* With a start date of March 1, 2006 – users of FreePay websites have 90 days to complete all offer requirements.
* Upon completion of all offer requirements, existing users will need to print a "Redemption Form" that must be filled out in its entirety and mailed with a postmarked date no later than 30 days of completing their offer requirements.

You will find an indication of how many days you have left to complete the requirements on the Status page. When you have completed the requirements you will be able to download the redemption form from the Status page.

To coincide with this change, look out for an update soon that will make it even easier to refer friends!

Best wishes

- The FreePay Team

FreePay has stated in the past that there is a great deal of fraud on their sites by users using dubious means to complete the sites and get their free prizes. More likely, the problem is that there are groups of "professional" traders on communities like Anything4Free.com and ReferralSwapper that work hard and strive to complete the sites easily and as fast as possible. Professional trading has been citied in the past from site owners, such as the fallen Coobro sites, as the reason for having to shut down and suspend operations.

Anything4Free.com has downgraded FreePay to a grade "C" site and many users are trying to figure out what to do. I am currently trying to finish two sites (although I had been planning to eventually try and complete all of their sites), FreeMiniMacs.com (5 refs needed) and iPodnanos.freepay.com (3 refs needed). Most likely, I will have to pay people to sign up under me so I can complete the sites, which in my opinion, defeats the entire idea of a "free" offer site.

UPDATE: 10/12/06 - FreePay finally sent me my iPod Nano and Mac Mini that I had been owed since back in May. Although it took a long time, I never had to contact the BBB like many other members had. I will not be doing anymore FreePay sites, although I have a few other free sites I may try and complete.

Because of this action by FreePay, I have started a petition for people to sign which I will send to FreePay and ask them to reconsider this change in policy, or at least reimburse users for their referrals that they have and were unable to complete. Although this action might not be successful, it is the only action I can think of that could possibly influence FreePay to change their minds.

PLEASE SIGN THE PETITION HERE. ONLY BY ORGANIZING AND WORKING TOGETHER CAN WE TRY AND REMEDY THIS SITUATION.

I, like many FreePay users, have worked long and hard, spend many hours and money trying to complete these sites and promote FreePay to our friends, family, coworkers, and total strangers. We should not be treated this way, and as veterans of FreePay/Gratis and other free sites, we should band together to try and stop this unfair action. Even if you don't think the petition will help, please sign it anyway. By being proactive we can at least say we tried to fight against these changes.

The contact information contained in the petition was taken from the BBB report on Gratis and their domain registration information. If anyone has any other contact information please post it in a comment or contact me with it so I can update it with more current or valid data. Their domain registration information is:

Gratis Internet
Domain Administrator
PO Box 50945
Washington DC, DC 20091
US
Phone: (202) 595-9123
Fax..: 202.478.0817
Email: domains@gratisinternet.com

I also encourage you to send letters, emails and faxes to FreePay/Gratis and let them know your disapproval about their new terms. If you receive any replies, please post them in the comments.

Stay tuned for updates.

UPDATE:

I have posted the link to the petition on several forums which has started some very heated discussions. Here they are:

Anything4Free.com Discussion
FreeiPodGuide Forums Discussion (with comments from Jake, FreePay rep)
ReferralSwapper Discussion
Gear Live Discussion

Many people have openly flammed me for attempting to try and create a solution to this problem. This is very discouraging to me after I feel like I am not just trying to help myself, but the free site community in general. If anyone has any words of encouragement, I welcome them. Right now I feel like I need a Valium...

Transdermal L-Deprenyl Approved as Treatment for Depression

The FDA has now approved a transdermal patch containing L-Deprenyl (Selegiline) as treatment for depression. This comes as a very interesting move as selegiline is not a true anti-depressant in the sense that it's not an SSRI or MAOI. Selegiline has been formally sold in the US, under the brand name Eldepryl, as a treatment for Parkinsons disease because it keeps dopamine from breaking down. It also works as an MAO-B in low doses, but as a true MAOI at much higher doses. Selegiline has been used in a wide variety of off label uses, including as a "smart drug" to enhance cognitive function. It has also been used by people in the life extension crowd to possibly help extend their life as studies in rats has shown it contains this possibility.

Selegiline sold for off-label uses has often been towted as a type of "miracle drug" for all the abilities and uses it has. It has been used to treat patients who have damaged brain function due to MDMA poisoning and even as a type of nutritional supplement because it increases the levels of the antioxidant Super Oxide Dismutase (SOD).

The drug itself has a very interesting history, including the story of one man who was sent to prison for selling the drug over the counter. There is also a very good article on it at Avant Lab's magazine, unfortunately it is going through maintaince at this time and I don't have access to it. However, you can find a cached copy of Part 2 through Google.

In the mean time, read The History of Deprenyl.

FDA Approves Emsam (Selegiline) as First Drug Patch for Depression
Lowest Dose can be used without Restrictions Required of MAOI
Class of Depression Drugs

The Food and Drug Administration today approved Emsam (selegiline), the first skin (transdermal) patch for use in treating major depression. The once a day patch works by delivering selegiline, a monoamine oxidase inhibitor or MAOI, through the skin and into the bloodstream. At its lowest strength, Emsam can be used without the dietary restrictions that are needed for all oral MAO inhibitors that are approved for treating major depression.

"Emsam provides a significant advance because at least in its lowest dose patients can use the drug without the usual dietary restrictions associated with these types of drugs known as MAO inhibitors,“ said Dr. Steven Galson, Director for the Center for Drug Evaluation and Research.

Major depressive disorder is a common psychiatric condition in the U.S. population. Symptoms of depression include general emotional dejection, withdrawal and restlessness that interfere with daily functioning, such as loss of interest in usual activities; significant change in weight and/or appetite; insomnia; increased fatigue; feelings of guilt or worthlessness; slowed thinking or impaired concentration; and a suicide attempt or suicidal ideation.

MAO inhibitors usually require specific dietary restrictions because when combined with certain foods they can cause a sudden, large increase in blood pressure, or “hypertensive crisis”. A hypertensive crisis can lead to a stroke and death. Symptoms of a hypertensive crisis include sudden onset of severe headache, nausea, stiff neck, a fast heartbeat or a change in the way your heart beats (palpitations), sweating, and confusion. Patients who have these symptoms should get medical care right away.

The lowest dose of the MAOI patch, which delivers 6 milligrams (mg) of the medication over a 24 hour period, can be used without such dietary restrictions.

The Emsam patch will be made available in three sizes that deliver 6, 9, or 12 mg of selegiline per 24 hours. The patch is a matrix containing three layers consisting of a backing, and adhesive drug layer, and a release liner that is placed against the skin.

Emsam has been shown safe and effective for treatment of major depressive disorder in two 6-8 week studies and also in a longer-term study of patients. The data for EMSAM 6mg/24hr support the recommendation that a modified diet is not required at this dose. Patients are advised to change the patch once a day. The more limited data available for EMSAM 9mg/24hr and 12mg/24hr do not rule out food effects so that patients receiving these higher doses should follow dietary restrictions that advise them to avoid certain foods or beverages. This includes foods and beverages such as aged cheese and wine.

The only common side effect of Emsam detected in placebo-controlled trials was a mild skin reaction where the patch is placed. There may be mild redness at the site when a patch is removed. If the redness does not go away within several hours after removing the patch or if irritation or itching continues, patients are advised to contact their doctor.

Another side effect that was seen less commonly was light-headedness related to a drop in blood pressure.

The manufacturer and distributor of this new product have planned an educational campaign for patients and prescribers to ensure that advice on dietary modifications for the higher patch strengths is adhered to. They plan to conduct both patient and health care provider surveys to assess the effectiveness of the educational campaign. The manufacturer and distributor will also closely track reports of adverse events, and follow-up on those that might represent hypertensive crises, to further ensure the safe use of this product.

Although the effects of heat on the patch are not known, the drug labeling advises health care professionals and patients about the possible effects of direct heat applied to the Emsam patch. Direct heat may result in an increased amount of the drug absorbed from the patch. Patients should avoid exposing the patch to heating pads, electric blankets, heat lamps, saunas, hot tubs, or prolonged sunlight.

Like all approved antidepressants, this product carries a warning of increased suicidality in children and adolescents.

EMSAM was developed by Somerset Pharmaceuticals, Inc. In December 2004, Bristol-Myers Squibb and Somerset entered into an agreement that provides Bristol-Myers Squibb with distribution rights to market EMSAM after approval in the United States. Selegiline was initially approved in capsule form for use in Parkinson's Disease.

From the FDA Press Release

SEC: 12DailyPro "Complete Ponzi" - Company Shut Down

The SEC has completely shut down 12DailyPro and frozen the assets of it's sole operator, Charis Johnson. It has debunked the myth that 12DP was anything more than a "complete ponzi" and there were absolutely no outside revenue streams.

SEC Halts “Paid Autosurf” Internet Ponzi Scheme that Raised Over $50 Million from 300,000 Investors Worldwide
FOR IMMEDIATE RELEASE
2006-26

Washington D.C., Feb.27, 2006 — The Securities and Exchange Commission today announced the filing of securities fraud charges against the operators of www.12dailypro.com, a “paid autosurf program” that in fact was a massive Ponzi scheme which raised more than $50 million from over 300,000 investors worldwide by offering a 44% return on investment in just 12 days. As a result of the SEC’s charges, the defendants, Charis Johnson, age 33, of Charlotte, N.C., and her companies, 12daily Pro and LifeClicks, LLC, ceased their solicitation of investors and agreed to a freeze of all their assets and the appointment of a receiver who will take control of the companies’ operations.

According to the Commission’s complaint, which was filed last week in federal district court in Los Angeles, Calif., www.12dailypro.com claimed to be a paid autosurf program — a form of online advertising program that purportedly generates advertising revenue by automatically rotating advertised websites into a viewer’s Internet browser. Advertisers purportedly pay “hosts,” which in turn pay their members to view the rotated websites. The Commission’s complaint alleges that 12daily Pro’s sale of membership units constituted the fraudulent and unregistered sale of securities under the federal securities laws. The Commission also today posted to its Web site an investor alert concerning autosurf programs. The alert can be viewed at www.sec.gov/investor/pubs/autosurf.htm.

Randall R. Lee, Regional Director of the Commission’s Pacific Regional Office, said, “Paid autosurf programs have become an enormous industry on the Internet. When these schemes depend on attracting new members in order to pay returns to current members, they are destined to collapse. The promise of guaranteed, double-digit returns in a matter of days should raise a red flag. We urge the public to be aware that paid memberships in these schemes may be a form of investment, and to exercise extreme caution before investing in any get rich quick scheme.”

According to the Commission’s complaint, the 12daily Pro website, recently ranked as the 352nd most heavily trafficked website, solicited investors to become “upgraded members” by buying “units” for a “fee” of $6 per unit, with a maximum of 1,000 units. 12daily Pro promised to pay each upgraded member 12% of his or her membership fee per day for 12 days. At the end of 12 days, the member purportedly would have earned a total of 144% of his or her original membership fee, 44% of which would be profit on the membership fee. To receive the promised payment, a member purportedly must view at least 12 web pages per day during the 12 day period. The amount of returns that 12daily Pro would pay its members, however, was in fact dependent solely on the amount of each member’s investment, not on the amount of website-viewing or any other services rendered.

The Commission alleges that the defendants defrauded investors by operating 12daily Pro as almost a pure Ponzi scheme — using new investor monies to pay the promised returns to existing investors — in violation of the federal securities laws. The defendants falsely represented that upgraded members’ earnings “are financed not only [by] incoming member fees, but also with multiple income streams including advertising, and off-site investments.” In fact, at least 95% of 12daily Pro’s revenues have come from new investments in the form of membership fees from new or existing members. The other “multiple income streams” from advertising revenues or off-site investments touted by the defendants were either negligible or non-existent. In addition, undisclosed to investors, Johnson transferred more than $1.9 million in investor funds to her personal bank account since mid-2005.

Johnson and her companies have consented to the entry of a court order that permanently enjoins them from future violations of the antifraud provisions of the federal securities laws, imposes a freeze on their assets, prohibits the destruction of documents, and appoints Thomas F. Lennon as permanent receiver over the assets of 12daily Pro and LifeClicks, LLC. The order is subject to approval by United States District Judge Nora M. Manella. Johnson and her companies consented to the order without admitting or denying the allegations in the complaint. The Commission’s complaint also seeks repayment of ill-gotten gains and civil money penalties; the amounts to be sought will be determined at a later date.

The Commission’s complaint alleges that the defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act.

This matter was referred to the Commission in early February by several members of the public. Complaints and tips from the public are vital to the Commission’s mission to protect investors, and the Commission staff reviews each and every complaint it receives.

Taken from the SEC's Press Release

This action could effectively shut down the auto-surf industry entirely, as new companies should be weary that they are no longer under the radar and are not immune from action from government bodies. 12DailyPro, obviously being the largest auto-surf of it's kind, was effectively shut down when it's payment processor, StormPay, froze all of it's accounts after claiming that it was a ponzi and was being investigated by unnamed outside sources. After this, all the attention was focused on 12DP and it's operator, Charis Johnson, who has in the last two months, been hounded by reporters and it's own members trying to get to the bottom of what happened.

With this latest action by the SEC it is clear that 12DailyPro was, without question, a completely fraudulent program designed to steal members money and place it in the pockets of new members to keep the program running. The rest of the money was diverted to Charis Johnson's bank account to buy her a brand new house.

Auto-surfing, a new name for an old scheme called a Prime-Bank, has recently popped up online as a blockbuster way to make huge returns on investments in a short period of time. The North American Securities Administrators Association said that Prime Banks are one of the top 13 ways that investors are likely to be ripped off this year.

Prime Bank Schemes. These schemes often promise high-yield, tax-free returns that are said to result from “off-shore trades of bank debentures.” Investors are told that only very wealthy people can get the benefit of these programs but the promoter is able to make it available to the victim. Sometimes the victim is required to execute a “confidentiality agreement” in order to invest and is told not to consult an attorney, accountant or financial planner because they keep these programs for the “big boys” and will deny that they exist. There are no such programs, no such debentures and no such high-yield trades. These prime bank schemes are the securities equivalent of a purse snatch. Once the seller has your money, it’s gone “off shore” forever.

Now, with the SEC releasing a report condemning the autosurf industry, it is highly likely that most of these companies will shut down or go underground in an effort to once again stay off the radar.

While auto-surfing may sound easy and appealing — and risk-free — there can be a hitch. Some auto-surf programs require their surfers to pay to participate, although perhaps not initially. When you first sign up to auto-surf, the firm might assign a limited number of sites for you to visit and pay you accordingly. Once you’ve made a modest amount of money, the firm might encourage — or even require — you to purchase a “membership” so that you can maximize your earnings. The program will promise high — often double or triple digit — returns on your investment in the program, often within days or weeks of joining.

The line you’ll hear is that the more you click, the more you collect. But the reality is that any scheme that requires you to pay to participate — and promises handsome rewards in no time at all for little to no effort on your part — bears many of the hallmarks of a “Ponzi” or pyramid scheme. These schemes look deceptively legitimate because the fraudsters behind them typically use money coming in from new recruits to pay off early stage investors. But eventually the pyramid will collapse when it gets too big. It’s simply not possible to “rob-Peter-to-pay-Paul" forever.

UPDATE 2/28:

Charis Johnson has started a new blog [which has now been removed] after claiming that the 12DP site was seized by the SEC and she can no longer post there. She has posted the following message on her blog in response to the recent press release from the SEC:

To those watching for a comment from me on the 12dp forum regarding today's SEC press release and the cooresponding filing, there will be none there.

The website is to now be under the control of the SEC and thus I am unable to post anything on the site without approval.

I hope to have my attorneys agree to the release of a statement within the next day or so which will clarify our position, dispel the inaccuracies in the filing and explain why we reached an agreement with the SEC that was in the best interest of members, despite such inaccuracies.

Keep in mind that the SEC never interviewed us, never talked with us, never examined our data, never looked at our bank accounts, and never examined our books before placing this filing. All information came from outside sources, primarily StormPay and an ex-convict seeking media exposure.

Before reaching the agreement, my attorneys provided documentation to the SEC in the form of bank records and EMO records showing the funds withrawn from StormPay were utilized for business purposes, with more than 70% used to fund LifeClicks' EMO account. They were also provided documentation that showed that StormPay does not have a merchant account option and that when you add a bank account to your SP account, their terms state that the name of th bank account must match the individual name on the StormPay account. We were following the StormPay TOS. The SEC omitted these things in the press release, I would assume because it would weaken their case for the original filing.

Regardless, we are and will continue cooperating with the SEC in whatever way they require of us.

I seriously doubt that the SEC did not view her bank accounts, and how could she know this information? The SEC could easily look into her personal accounts and determine her earnings based on information released by the bank under court order and from IRS filings. Never the less, if the SEC filing has it's desired effects, members should hope to be expecting refunds in the near future.

UPDATE 2/28 10PM:

The SEC has released more information on the litigation action against Charis Johnson and 12DailyPro today.

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19579 / February 27, 2006
SECURITIES AND EXCHANGE COMMISSION v. CHARIS JOHNSON, LIFECLICKS, LLC, and 12DAILY PRO, Civil Action No. CV 06-01018 NM (PLAx) (C.D. Cal.)
SEC HALTS “PAID AUTOSURF” INTERNET PONZI SCHEME THAT RAISED OVER $50 MILLION FROM 300,000 INVESTORS WORLDWIDE

The Securities and Exchange Commission (“Commission”) today announced the filing of securities fraud charges against the operators of www.12dailypro.com, a “paid autosurf program” that in fact was a massive Ponzi scheme which raised more than $50 million from over 300,000 investors worldwide by offering a 44% return on investment in just 12 days. As a result of the Commission’s charges, the defendants, Charis Johnson, age 33, of Charlotte, N.C., and her companies, 12daily Pro and LifeClicks, LLC (“LifeClicks”), ceased their solicitation of investors and agreed to a freeze of all their assets and the appointment of a receiver who will take control of the companies’ operations.

According to the Commission’s complaint, which was filed last week in federal district court in Los Angeles, California, www.12dailypro.com claimed to be a paid autosurf program — a form of online advertising program that purportedly generates advertising revenue by automatically rotating advertised websites into a viewer’s Internet browser. Advertisers purportedly pay “hosts,” which in turn pay their members to view the rotated websites. The Commission’s complaint alleges that 12daily Pro’s sale of membership units constituted the fraudulent and unregistered sale of securities under the federal securities laws.

According to the Commission’s complaint, the 12daily Pro website, recently ranked as the 352nd most heavily trafficked website, solicited investors to become “upgraded members” by buying “units” for a “fee” of $6 per unit, with a maximum of 1,000 units. 12daily Pro promised to pay each upgraded member 12% of his or her membership fee per day for 12 days. At the end of 12 days, the member purportedly would have earned a total of 144% of his or her original membership fee, 44% of which would be profit on the membership fee. To receive the promised payment, a member purportedly must view at least 12 web pages per day during the 12 day period. The amount of returns that 12daily Pro would pay its members, however, was in fact dependent solely on the amount of each member’s investment, not on the amount of website-viewing or any other services rendered.

The Commission alleges that the defendants defrauded investors by operating 12daily Pro as almost a pure Ponzi scheme — using new investor monies to pay the promised returns to existing investors — in violation of the federal securities laws. The defendants falsely represented that upgraded members’ earnings “are financed not only [by] incoming member fees, but also with multiple income streams including advertising, and off-site investments.” In fact, at least 95% of 12daily Pro’s revenues have come from new investments in the form of membership fees from new or existing members. The other “multiple income streams” from advertising revenues or off-site investments touted by the defendants were either negligible or non-existent. In addition, undisclosed to investors, Johnson transferred more than $1.9 million in investor funds to her personal bank account since mid-2005.

Johnson and her companies have consented to the entry of a court order that permanently enjoins them from future violations of the antifraud provisions of the federal securities laws, imposes a freeze on their assets, prohibits the destruction of documents, and appoints Thomas F. Lennon as permanent receiver over the assets of 12daily Pro and LifeClicks, LLC. The order is subject to approval by United States District Judge Nora M. Manella. Johnson and her companies consented to the order without admitting or denying the allegations in the complaint. The Commission’s complaint also seeks repayment of ill-gotten gains and civil money penalties; the amounts to be sought will be determined at a later date.

The Commission’s complaint alleges that the defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act.

This matter was referred to the Commission in early February by several members of the public. Complaints and tips from the public are vital to the Commission’s mission to protect investors, and the Commission staff reviews each and every complaint it receives.

Originally posted here. View the entire court document here. (PDF)

SEC shuts down Ponzi scheme that raised $50 million - Feb. 27, 2006

ABC4 Reports That 12DailyPro is Shutting Down

According to a new report from ABC4, Charis Johnson has announced on her forum that 12DP has shut down for good after reports that they are receiving Cease & Desist orders from state and federal investigators. In a report from CourtHouseNews.com, they say:

Internet Ponzi Scheme Raked In $50 Million, SEC Says
LOS ANGELES (CN) - Charis Johnson, 33, of North Carolina, has raised more than $50 million from more than 300,000 investors an Internet Ponzi scheme, and has skimmed $1.9 million from it since the summer of 2005, the SEC claims in Federal Court. The agency claims that Johnson, of Charlotte, got the money through her Web-based businesses, LifeClicks and 12daily Pro. She sells 12daily Pro "membership units"� as a "paid Autosurf program" whose members allegedly are paid for "�viewing the websites owned or promoted by other online professionals."� Suckers can become "�upgraded members"� for $6 per unit, and the scam is so effective that 12daily Pro "�was recently ranked the 352nd most heavily trafficked website on the Internet," the agency claims.
The SEC says Johnson runs 12daily Pro as "�almost a pure Ponzi scheme -� at least 95% of the funds 12daily Pro uses to pay returns to upgraded members come from new investments in the form of new or existing members" upgrade fees.� She promises to pay each "�upgraded member"� 12 percent of his or her membership fee per day for 12 days, promising a 44 percent profit after 12 days.
Since mid-2005, the Defendants have raised more than $50 million from more than 300,000 investors nationwide and overseas, the agency says. �One of the Defendant'�s payment processors, StormPay, Inc., currently holds approximately $50 million in investor funds, which it has voluntarily agreed to freeze. The Defendants are seeking to undo the freeze.�
The SEC says Johnson has made �material misrepresentations and omissions in offering and selling the 12daily Pro investment program, and says �the bank holding Johnson's account (with the $1.9 million she allegedly skimmed) is unwilling to freeze the funds in the account without a court order.
The SEC wants defendants accounts frozen, documents preserved, accounting, disgorgement with interest, a receiver appointed, and penalties.

I'm not sure how they determined that Charis "skimmed" $1.9 million from 12DP, except from bank filings. One would surely expect that she would make money from her own program and company, as she is acting president and there would be operating costs, not to mention she obviously wasn't running the program from charity. However, with the SEC order it sounds more likely that it will freeze her bank account and will probably result in the seizure of her new house.

This seems to be the final nail in the coffin for 12DailyPro though, and we will find out next if users should expect to get their money refunded or if Charis Johnson will skip town. Regardless, Charis Johnson's name is now tainted in the world of auto-surfing, and any type of investment scheme she might try to open next would probably end up a complete failure. Her best bet would probably be to cut her losses and maybe write a book about the whole ordeal.

Interestingly enough, StormPay seems to have faded from the picture after the Jeff Johnson & ABC4 interview that occur at their offices (at least in the media). User's are still desperately trying to retrieve money out of their accounts that was frozen by StormPay through chargebacks and other filings through their bank. Yours truly withdrew the money that was in my account and successfully received it, although I never invested in 12DailyPro.

We'll find out what the official action taken, sometime Monday, was by the investigators in NC and with the SEC.

ABC 4 - 12 Daily Pro Shuts Down as Investigation Heats up

Cease & Desist Order Issued Against 12DailyPro

ABC4 is reporting that authorities in North Carolina and the SEC have issued a cease and desist order against 12DailyPro to stop it from selling unlicensed securities. This action comes a little too late for most, since 12DailyPro has already stopped opening new accounts and allowing people to upgrade since the debacle with StormPay. From ABC4's article:

"A summary cease & desist order is issued by the Securities Division when it appears that ongoing activity violates the North Carolina Securities Act or the North Carolina Investment Advisers Act and poses the threat of irreparable harm to the investing public. The cease & desist order commands those who receive it to stop any further violations and to comply with the requirements of the securities laws."

Although no information has been posted on the NC Attorney General or SEC's website (it should be posted Monday), Charis Johnson, the operator of 12DailyPro has responded with the following statement:

Please be aware that Monday, 12dp will release a statement regarding a compromise that has been reached between 12dp with authorities that will lead to the resolution of this matter and the beginngings of an accounting and refund process.

You may hear news this weekend regarding a legal pleading that contains much misleading information provided to authorieties primarily by StormPay. Our attorneys have already proven to the authorities the most outstanding allegation made to be false, which likely will not be reported on the news. One issue to be cleared up is the fact that StormPay does not have an option for creating merchant accounts and linked merchant bank accounts. If any business signs up for a StormPay account, they have to use someone's individual name and StormPay insists that any bank account added must match that same individual name.

But a full statement addressing such issues will be made to that affect early next week.

Thank you for your patience and we are glad that we have been able to take steps that will help bring this ordeal to a close soon.

So what happens next will be anyones guess. Obviously 12DailyPro doesn't need to take any further action to comply with the C&D order, unless there are more specifics in them that haven't been published yet. We will have to wait and see if there are going to be refunds for the many customers of 12DP who invested in the service, as well as for those who lost money due to the canceled GPT convention that was canceled.

New Action by State and Federal Regulators Against 12 Daily Pro

Simple Car Modifications to Boost Horsepower

In this article I'm going to discuss some simple and cheap ways to enhance your cars performance to boost your horsepower. Doing so will also (usually) increase gas mileage and increase rear end torque.

I did a lot of modifications to my 96 Firebird. Some of them were very hard and very expensive, but there are a lot of simple modifications you can do to your domestic or import car that are cheap and simple to install that allow you to improve performance. Depending on how much you want to spend and how much work you want to put into it, you can spend a lot of money on a car and sometimes not get a lot out of it. When deciding on whether or not to start modifying a car, you have to take into account what kind of engine it has, what is the stock HP, and whether or not any companies make prefabricated parts for it to allow you to modify it. So, for example, if you have a Ford Escort and you want to get it up to the same horsepower as a V8 Trans Am or something, you're going to have to spend a lot more money than you would if you probably just searched around and found an older model used car that's already got a large engine in it, or a different car that is easier to modify and give you more bang for your buck.

But, as for the modifications, most can be installed yourself or installed cheaply by a local muffler shop or some place similar. First, we'll look at the intake system.

Cold Air Induction

Cold air induction is a very simple modification most people can make to their cars, and many aftermarket car parts manufactures make prefabricated cold air induction systems for most models. By default, your car has an air filter that connects into the throttle body that's within the engine compartment. When the default system is in place, hot air is sucked into the throttle body within the engine area and you have a reduced flow because of the smaller sized tubing and connectors that go between it and the air filter. Installing a cold air induction system removes the parts from the throttle body to the air filter, and tries to move the air filter to a place away from the heat of the engine, so it's sucking in colder air. Colder air cools your engine off slightly, and gives you more air into the throttle body to allow for more combustion. Cold air kits also come with higher flow air filters (normally K&N) that are reusable, so they last forever - you just have to clean them every now and then. As I mentioned, many companies make cold air kits for your car already, so you just have to check and see if one is made and if it's within your price range. If you're lucky, you might have more than one company who makes a system for your car and then you can pick and choose. They're fairly simple to install, and normally come with instructions that you could use to install it yourself in your garage. If you can't find a premade cold air kit for your car, sometimes you can make your own out of metal pipes or hoses that you can purchase at automotive stores or fashion yourself out of other parts. Do a search around on some forums or newsgroups about your car and more than likely someone has written up some instructions as to how to make your own if no one makes one for you.

If you don't want to spend the money or can't find a cold air kit for your car, you can install a K&N High Flow Air Filter. It just allows for more air to flow in than standard air filters which also increases horsepower, but to a lesser degree (although they claim anywhere from 10-20hp, but that's really pushing it for just a filter).

Read more about Air Intake Systems on AutoAnything.

Cat Back/Muffler Kits

A cat-back is a exhaust kit for a car that replaces all the exhaust pipes from the catalytic converter back (hence the name). This includes a new muffler and often times new exhaust tips. There are many, many cat-back systems out there to choose from for most cars and you can pick them based on how loud you want it to sound, or if you don't want it too loud you can find a quieter system. Cat-backs normally cost around $300 or so and can normally add around 10-20hp to your ride, so it makes for a good pretty cheap investment. With the additional exhaust tips, it can also add to the look of your car so you can pick what your preference is.

If you don't want to install an entire cat-back, you can install just an aftermarket muffler. Again, many choices here and having a higher flow muffler will add some horsepower too. You'll have to check and see who makes what for your car and decide on how you want it to sound.

With a cat-backs and mufflers, you will most likely have to have it installed somewhere, unless you have your own car lift and know how to weld. Most places, like Midas, don't charge a lot to install a cat-back and don't take too long. Just make sure that they're qualified and know what they hell they're doing so your new exhaust system doesn't fall off on the ground as soon as you drive off. If there are specialty automotive shops in your area, they can usually install it for you too, but will probably charge more.

Read more about Exhaust Systems on AutoAnything.

Low Temperature Thermostat + Redline Water Wetter

Installing a lower temperature thermostat triggers your radiator to cool off the engine when it reaches a certain temperature. Most cars with a standard thermostat have it set by default for around 200 degrees. However, you can buy a lower temperature one for 160, so it will start cooling the engine when it reaches 160 degrees instead of 200. This will let your engine run cooler and give you some extra HP. The next thing you can add is Water Wetter by Redline Oils. Water Wetter is a pour in product that you add to your radiator fluid. Adding one bottle will reduce engine temperatures by about 7 degrees or so. If you were to use a half and half mixture of just Water Wetter and water, it would cool it even more. But, it doesn't have freeze protection like anti-freeze, so it's not a very viable option for every day drivers. However, one bottle is about $7 and helps cool off your engine somewhat, so it's worth the investment. It also lubricates the water pump and helps keeps your radiator free of rust and corrosion. You can read their full technical writeup about it. (PDF). You can normally pick up a thermostat and Water Wetter at a local auto supply store for less than $20.

Synthetic Fluids

A very cheap modification you can do to any car is to change out all the fluids from the standard dinosaur oils to more efficient synthetic types. For just about any type of fluid that goes into your car (with the exception of gasoline) there is a synthetic fluid or oil that you can use to help improve performance. I always use Royal Purple motor oil in my car. It is the best oil in the world and can actually help increase your cars horsepower, as well as a multitude of other things, including helping to reduce engine wear and improved gas mileage. You can change out pretty much any type of fluid in your car with either products from Royal Purple or Red Line, and now many other manufacturers, such the popular Mobile One are entering the market with transmission fluids, brake fluids, gear oil, and even grease. A good fuel system treatment, like Red Line's Complete Fuel System Cleaner can help keep fuel injectors spraying at their fullest and keep the entire fuel system free of corrosion and improve gas mileage as well. Although these may cost a little more, they are one of the easiest changes you can make and can help significantly. Remember, don't use a higher octane gas than your car's manual recommends unless you've made a specific modification (such as a computer chip modification) that requires it. Using a higher octane fuel, even on occasion, is not necessary as it does not provide more power to your car or any more cleaners than is in regular fuel. Also, don't waste your money on "oil additives" like Slick 50 or other gimmicks. These have been proven time and time again to be primarily bunk and don't help your cars performance or gas mileage. Adding to your car can sometimes even void the warranty.

Read more on How to Save on Gas at AutoAnything.

High Performance Spark Plugs and Wires

There are many brands of spark plugs and spark plug wires than can improve performance by creating a faster spark, along with lower heat resistance and a longer life span than standard plugs and wires. I use Bosch Platinum +4 plugs. There are many different brands of wires to choose from based on your model car that can help improve performance too. It's also a good idea to place some heat shielding around them, depending on where they are positioned in the engine. I've had several spark plug wires melt because of how close they are to the exhaust headers.

Computer Chips and Programmers

On most new cars since the mid 90s have had computers and computer chips in them to regulate the functions of the car, such as the timing, the gear ratios, the amount of fuel that goes into the engine, the speed of the transmission shifting, and so forth. There are many aftermarket computer chips and "power programmers" that you can purchase to reprogram or reset your cars computer chip to increase performance by modifying these variables. Often times these are in the high price range (usually around $400) but can make a significant difference to your cars horsepower and torque, especially when combined with many of the modifications mentioned above. These are usually one of the easiest modifications to apply, because all you have to do is either plug them into your cars computer socket or crimp it into some wiring. Most of them offer options to switch them on and off so if you have to take it in to get it inspected or take it to the dealership, you can turn them off and make sure your car is in default settings.

Read more about Performance Chips on AutoAnything.

If you do all these modifications you can probably expect to add about a good 20 rear wheel hp (meaning true & solid horsepower). Once you've added all these performance enhancements you'll probably want to pick up a radar detector, lest you end up paying even more to the police department.

In my next article I'll talk about some simple modifications to improve your car's suspension and handling.

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