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In what quickly became a battle of e-mails, Charis Johnson, the Administrator of 12 Daily Pro, an internet get-rich-quick program, wrote members Friday that “upgrades” – increases in money paid into the program – have been stopped and there would be no new memberships. That, coupled with a freezing of all 12 Daily Pro accounts with its payment transfer service, Storm Pay, effectively shut down the program temporarily.

In an e-mail of its own to people in the 12 Daily Pro system, Storm Pay offered this explanation:

“It has recently been brought to the attention of StormPay, Inc., that the current rash of new Auto-Surf and Paid to Read accounts are NOT operating in the traditional manner. Further investigation by both StormPay and other outside investigational organizations/law enforcement agencies have drawn early conclusions that these types of programs are nothing more than well hidden “Ponzi” or “Pyramid” schemes. While many of you may not agree, or wish to agree that these programs or (are) illegally operated ponzi’s, there are many facts that are unavailable to you, or that may have been hidden by the operators of these programs. Please note that StormPay’s user agreement has always banned merchant accounts for these types of activities. Throughout the investigations into these programs, StormPay has asked the “Merchant(s)” to provide a detailed explanation of the workings of these programs including how profit margins and customer payments are made. These questions were asked point blank by Storm Pay while on a conference call with the owner/operator and their attorney. The requests for information from the “merchant” were simply denied…” (Original spelling and grammar retained.)

Late Friday, Ms. Johnson fired back that Storm Pay has understood her business model from day one. She also charges that Storm Pay tried to “blackmail” her into using their service exclusively.

12 Daily Pro promises on its website that members can “earn 12 percent daily” while using an auto-surf program on their computer. At the end of 12 days, the member is told they will receive back their original investment plus 44%. Using a compound interest table, that calculates out to an annual interest rate of 5,634,651%*.

“I’ve been in this business 14 years,” says Francine Giani, head of Utah’s Division of Consumer Protection, “and I wouldn’t believe anything like that.”

In the Friday morning e-mail, Charis Johnson of 12 Daily Pro pledged “to be proactive in cooperating with any authorities that may want to ask questions.” That pledge apparently does not extend to ABC4 News.

Our message left on the company’s answering machine has yet to be answered. We invite Ms Johnson to provide a detailed prospectus that shows exactly how the company can generate revenues to support its interest claims. ABC4 News also left a voice mail message with Storm Pay. We are seeking clarification of the reason for freezing the accounts as well as an explanation of the vague reference to investigations by “law enforcement agencies”. That message has also gone unanswered.

ABC4 News did successfully contact the Attorneys General offices in both North Carolina and Georgia. Both confirmed active investigations into LifeClick L.L.C. and 12 Daily Pro, but neither has yet to take any action. Also, there is no similar investigation currently in Utah.

Story by: Brent Hunsaker

* The computation is very simple – just take one dollar and multiply it by 1.44. The result is 1.44. That’s the first 12 day cycle. Then take the 1.44 and multiply it by 1.44. That’s 2.07. That’s the 2nd 12 day cycle. Multiply that by 1.44 and the result is 2.99. That’s the 3rd 12 day cycle. There are approximately 30 such cycles in a year, so just keep following the same formula for 30 cycles and you get 56,348. Divide that by the initial investment ($1), subtract 1 and multiply by 100 to get the astounding annual percentage of 5,634,651%.

Source: Dean Ned C. Hill, Marriott School of Management, Brigham Young University.

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