Now, however, the sucker is Dalbey, who's settling a federal and Colorado lawsuit to the tune of $330 million. Photos, videos, documents and details below.
The 2011 complaint against Dalbey, his wife Catherine and assorted business entities was jointly filed by the Federal Trade Commission and Colorado Attorney General John Suthers; it's included here.
The document points out that since at least 1996, Dalbey had marketed products and services "purporting to teach consumers how to find, broker, and earn commissions on seller-financed promissory notes or cash flow notes.... These promissory notes are privately held mortgages or notes often secured by the real property that is the subject of the loan." By 2002, his pitches were going out via nationally broadcast infomercials, direct mail, websites and e-mail.Here's one Dalbey claim featured in the complaint: "It's so incredibly easy, you wouldn't believe it. You simply find a cash flow note, and there's millions of them out there, and then you list what you just found on my exclusive nationwide buyers network where buyers are ready to buy what you just found."
Problem was, the only people apparently collecting no-sweat cash as a result of this concept were the Dalbeys. Here's another excerpt from the complaint:Few consumers who use the initial WITCFB products and services purchased in response to the infomercials and websites, and few consumers who use the additional products and services purchased through Defendants' telemarketers, have been able to quickly and easily broker any promissory notes or earn substantial amounts of money from brokering promissory notes. In fact, most consumers who purchase Defendants' products or services have not brokered any promissory notes or earned any money using Defendants' products and services.Another alleged irony: A number of those offering testimonials in support of Dalbey's formula on infomercials were far less successful than advertised. The complaint maintains that "in numerous instances, Defendants advertise inaccurate earnings claims for testimonialists. For example, some testimonialists paid out substantial portions of their earnings to co-brokers, employees, independent contractors, or other third parties, thereby yielding substantially lower earnings than what is stated in their testimonials. In addition, some testimonialist earnings claims were total earnings figures accumulated over several years rather than in one year." Continue for more about the Russ Dalbey settlement, including videos and original documents. The kicker, according to the complaint? "Defendant Dalbey has not earned millions of dollars from brokering promissory notes. Most of Defendant Dalbey's note-related income for the past two decades has come from the marketing and selling of products and services purporting to teach consumers how to find and broker promissory notes."
This lucre piled up quickly. As noted by the Colorado Attorney General's office, consumers were charged a fairly modest amount for initial "Winning" programs -- prices typically varied between $40 and $160. However, armies of telemarketers then descended upon them, nudging them to spend far more for seminars, coaching sessions and "promissory note holder lead lists."
Most of the people drawn in by this encouragement never made enough to offset this investment, but the Dalbeys scored big.
How much did they make? Authorities will soon find out. As part of the settlement, the Dalbeys "must disclose their assets in sworn financial statements; repatriate all foreign assets; and cooperate fully as the FTC and the Colorado Attorney General's office determine how much of an agreed-upon $330 million judgment they can pay. The judgment will be suspended upon the defendants' surrender of those assets."
In addition, the Dalbeys are now banned from "telemarketing, from marketing or selling business opportunities, and from producing or distributing infomercials."
No doubt plenty of other get-rich-quick schemers are already coming up with plans to fill the vacuum.
Look below to see a pair of Dalbey videos, followed by the original complaint and the case order outlining the settlement.
More from our Videos archive circa December 2012: "Videos: Richard Heene, Balloon Boy's dad, invents crazy stuff, makes crazier infomercials."
