Why did I create this site?

The tipping point was hearing that friends of mine were going to become resellers in a the snakeoil stickers sold by CeiAura.

However, I am equally motivated by my distaste for scams in general … most of us work too hard to make a honest dollar to sit idle while these criminal get a free ride.

When i started my research one afternoon just to prove CieAura was worthless, I discovered a whole lot more than I planed on.

Its easy to find the criticism on lack of evidence that the products could possibly do anything and just criticism of MLM’s in general … i was looking for something a bit more damning, so I just started digging into the owners of management to see how reputable they were.

I discovered a whole slew of companies pitching nearly identical products. Some of them told entirely different lies on how they worked, but the products all had the same unverifiable effects.    I had not been directly exposed to any of these before CieAura ( LifeWave, 8ight, Power balance, and the rest) — but its immediately obvious they are selling the same idea.

Its deeper than that — many of these companies have formed incestuously from the owners, CEOs, and sales people of the previous scam.

I’ll summarize my initial research in the next post and add to it as i have time. If you have dirt on these crooks that can be verified, feel free to comment with it and I’ll try to add it.

After revisiting this CieAura claims several times in the past few days, I thought I would compile some of my research to hopefully benefit others from falling for it.

CieAura is one of many companies woven over the past decade to sell these products.

Their management and owners include several criminals who have been found guilty of operating pyramid schemes, and their company design is one that has been repeated over and over.

Some example criminals brought in from the Burnlounge pyramid scheme

Alex Arnold – CieAura owner  – $16,245,799.70 Federal Trade Commission fine from his involvement in Burnlounge.  Now also runs Lexxus International, another MLM.

John “JT” Taylor -  – $620,139.64 FTC fine (http://www.cieaura.com/john-taylor.html)

FTC fines from Burnlounge – A pyramid scheme, making deceptive income claims

FTC-v-Burnlounge-Final-Decision

ftc.gov – Complaint:
FEDERAL TRADE COMMISSION,Plaintiff
v.
BURNLOUNGE, INC.,a corporation;
JUAN ALEXANDER ARNOLD, an individual;
JOHN TAYLOR, an individual;
ROB DEBOER, an individual; and
SCOTT ELLIOTT, an individual;
Defendants.

 

Beyond those from Burnlongue, the setup of the company and its relationships are suspect – a series of companies setup with similar products created in the past 5-10 years run or owned by repeating individuals.

Ken Rasner – CieAura CEO, previously Executive VP of LifeWave.  Also co-owner of Harmonic FM.

[Correction May 16,2012 - Pointed out by Joel on the MOH forum]

LifeWave (http://www.lifewave.com/) largely spun off from 8ight (http://www.8ight.com/) which sell the same stuff dealing with “intrinsic energy”

 8ight (http://www.8ight.com/)  was formed by Warren Hanchey who had previously been with Lifewave (http://www.lifewave.com/ after Warren Hanchey and David Schmidt had some sort of falling out that left Hanchey publicly saying some uncomplimentary things about Schmidt.  8ight largely sells the same type of product dealing with “intrinsic energy”

[--]

CieAura’s HQ address (7251 Lake Mead Boulevard, Suite 300) is really a Regus (http://lasvegas.citysearch.com/profile/map/47283929/las_vegas_nv/regus_hq.html ).  Regus offers the equivalent of combined PO Boxes, answering service, and rental conference rooms.

All of which seem to be front companies for HarmonicFM, which does not sell directly:

http://harmonicfm.com/

The address on their website (http://harmonicfm.com/contact.php) is really a house in Atlanta (http://www.zillow.com/homedetails/3610-Old-Atlanta-Rd-Suwanee-GA-30024/14630265_zpid/) owned by Marvin Barre (http://qpublic4.qpublic.net/ga_forsyth_display.php?KEY=159   029 )

Marvin Barre, who lists his occupation as “Energy Medicine” in his political campaign contributions, also is used as the eventual contact point for power-balance wristbands.   Power Balance wrist bands have been subject of scam exposure on Australian TV also (http://www.youtube.com/watch?v=yd0Gb9EgkHA )

8ight also in Suwanne, GA (Same city as Marvin Barre http://www.8ight.com/contact-us/  )  Whose address, as best I can tell is the UPS Store since the shopping strip at that address uses lettered suite names and I know the UPS store mailboxes use numbers.

Marvin is listed as a director of Lifewave (http://secure.lifewave.com/pdfs/Directors.pdf  also made a copy of it here)

Lifewave and CieAura actually manufacture through HarmonicsFM – again, Ken’s company who apparently manufactures out of Marvin’s house in Georgia.

Other than Lifewave, Cieaura, Power Balance, HarmonicFM, and 8ght – I believe a few other companies were mentioned in my research as front companies selling patches and braclets, although I don’t recall there names at the moment.

Some interesting commentary from which I derived names and did some of my own research above:

http://repspace.com/forums/t/1652.aspx

http://repspace.com/forums/p/1296/2231.aspx

http://mlmblog.net/site/2010/02/is-cieaura-holographic-an-mlm-a-scam-similar-to-lifewave.html

Here is a video demonstrating the ‘tip test’ used in the pitch:

http://www.metacafe.com/watch/6843934/how_to_perform_a_cieaura_tip_test_demonstration/

(with overlay pointing out what is done to scam you – notice how it’s the same technique as Power Bands…)

At the end of the day, it’s a hologram sticker, and you can buy 1000 holograms on a roll for $200 printed in the US – even cheaper if you outsource it. (http://www.novavisioninc.com/pages/prd_transparent_hologram.html)

Here is a huge thread on someone trying to track down the printer for Lifewave: http://answers.google.com/answers/threadview?id=541335  Their research exposes 5 or 6 more patch/sticker companies making different health claims  and they tracked down that the stickers are just 3M stock material.  The ‘medical company’, VLV  (http://www.vlvassociates.com/pages/5/index.htm ) is either a auto parts store or an apartment above it:

Google Streeview  of VLV

Regardless, the more I search, the deeper I get in the rabbit hole of inter relationships between these scammers.

I thought a new visual of how intertwined these guys are may help shed some light on the scam. While there are more players and ‘companies’ involved, this diagram represents what I have information to back up so far.




Also view this image in PDF

Way back in 2002, David Schmidt filed for a Patent for his LifeWave patch — go so far as to refer to himself as “Dr” (He only has a 2 year business degree, he’s not a doctor of any sort)

I have downloaded and OCR’ed the original patent application for your reference. Or you can read the patent yourself from the US patent office: (thanks again Joel on MOH Forums)

To retrieve the document go to http://portal.uspto.gov/external/portal/pair and get past the Captcha. Type in 60413617 into the Application Number Field, then hit the Submit button. Then select the Image File Wrapper tab. That will let you view and download the various parts of his provisional patent application including his signed cover letter, in which he twice claimed to be “Dr. David Schmidt.”

Keep in mind this is just an application. The actual patent has been rejected multiple times. (read: its a scam)

Again, Joel on MOH forums provided in a recent update on the Lifewave that Schmidt’s most recent patent application ( 12/915,419 ) was rejected on March 15,2012 — so I put together this history for those of you interested using the Patent Office website:

Application 60413617:
2002-09-25 Original Application
2004-07-19 EXPIRED PROVISIONAL (no file)

Application 10/669,596:
10669596 2003_09_25 Application
- I recommend flipping to PDF page 86 n this one to see Schmidt’s high tech drawings of a power bracelet/band for a good laugh.
10669596 2007_05_23 Lifewave Non Final Rejection
10669596 2008_02_19 Lifewave Final Rejection
10669596 2011_03_24 Lifewave Abbanodment

Application 12/915,419: (largely the same as prior application, including the poor drawings)
12915419 2010_10_29 Lifewave Application
12915419 2010_12_22 Lifewave Application Ammendment
12915419 2011_07_12 Lifewave Power of Attorney
12915419 2012_02_13 Lifewave Letter from Edward Blendermann to Deny
Edward claims it was his invention in patent application 10/075,221 which I haven’t researched yet. Not sure of his relation to any other ongoing fraud though.
12915419 2012_03_15 Lifewave Rejection

disclaimer: there is some additional fee related correspondence on the USPTO office if you’re interested that I did not capture, so this does not capture all correspondence on these patent applications.

Additionally David Schmidt’s has had 3 patent rejections unde the numbers 09/775,550, 09/886,935, and 09/887,531 for various other supposed inventions. If you care to look those up.

I suspect David Schmidt’s efforts to get a patent are so that he can say ‘Patent Pending’ and/or perhaps lure investors into his business under a guise of legitimacy.  He has been dragging out effectively the same patent application for nearly a decade.

Sometimes I have been asked why people see a benefit from the various snake oil products I am trying debunk and otherwise shine light on.  People are much more accepting of the fact that it’s not just a placebo effect.

In my researching of the all of the scam products from Lifewave, Cieaura, bHIP, 8ight, Harmonics FM, QNet, etc and the similar products of decades past (crystals, magnet bracelets, etc) — there is a common theme.

The products from these schemes vary greatly on how they are supposed to work.

Almost universally however, they share one common requirement to be effective:
Drink Water

In some cases, such as in the stickers and bracelets, its just part of the instructions:

“A critical requirement for CieAura Chips to be effective is proper hydration – drink water.”

“Always drink plenty of water while wearing any LifeWave patch technology. Drinking water is particularly important when wearing the skin patch in order to flush …”

In the case of the drinks (bHIP) — it either is water or you add water.

In the case of things like the Bio Disc — obviously you won’t see the benefit of energizing the water unless you use it and then drink the water…

Regardless, not drinking enough water can be the source of a whole range of health issues — easily corrected. If there is any grain of medical benefit to these products, it is that they act as a reminder to drink enough water

Mayo Clinic: Water: How much should you drink every day?

Take a look at 10 Health Benefits of Drinking Water, come up with a slick name for each point, print a magic sticker or get a bracelet made for each benefit, and you have yourself the next great snake oil company.

Regardless, if you know someone who is already a victim of these scams — they may be more easily convinced that the product claim are fraudulent if they think deeper about their water consumption habits.  If they have been drinking a few extra glasses a day to get that head-ache busting, allergy relieving, energy producing,etc. widget they have glued, strapped, or carried on their person to ‘work’ — they might be happily surprised to find out they can remind themselves to drink water in less expensive ways.

Take a look at the full case history for

Case No. 2:07-cv-03654-GW-FMO
FTC File No. 062 3201

FEDERAL TRADE COMMISSION,Plaintiff
v.
BURNLOUNGE, INC.,a corporation;
JUAN ALEXANDER ARNOLD, an individual;
JOHN TAYLOR, an individual;
ROB DEBOER, an individual; and
SCOTT ELLIOTT, an individual;
Defendants.

http://www.ftc.gov/os/caselist/0623201/index.shtm

Turns out this case is STILL dragging on as the FTC is trying to collect the fines.

CieAura is being acquired by Digitial Media Group (DMG).  Ken Rasner and Paul Rogers remain executives in the new company, — I have yet to research what new players are involved.

On October 3, 2012, Digital Media Group DMG successfully concluded negotiations to acquire certain operating assets of CieAura, LLC.

via Digital Media Group Announces the Acquisition of CieAura Assets.

According to the Digitial Media Group Website:

(DMG) is the preferred global 3D image creator for one of the biggest manufacturers in the world. Our ability to effectively utilize and create a blend of creative tools and services can help revolutionize how your business approaches the constantly evolving world of eCommence. We are able to provide you with quality 3D photorealistic images at the speed required for your business’ advertising and marketing needs.

Sounds like a case of a customer so large (ie, CieAura’s printing of 3d stickers) that they might as well be a partner.

Looking at the Cieaura Management Team web page, it appears that Ken Rasner and Paul Rodgers are no longer listed — so perhaps this is a move to allow Paul Rodgers and Jerry Yerke to move up the chain of the scam.