My Story – How I Got Scammed $35,000
By on Jul 12, 2011

I have thought about writing this post for a while but have always hesitated for one reason or another. I feel now it’s about time to tell my story and help stop other people from getting scammed.

This incident marked one of the most stressful times of my life.

At 18 years old I was finishing my last year of college (high school). Still living at home with around $800USD in my bank, I was really interested in online business and I was hoping I could use my savings to invest in some online businesses.

I started dabbling with a few small online ventures that made me enough to  go out in the weekends and cover petrol costs. At the time I was very naive businessman. Nothing could go wrong. Everyone could be trusted. The business world was a fun game filled with rainbows and lollipops.

Mr X at the Beach

At the start of the year I was introduced to a guy called Allan Jerman from San Diego, USA. He was referred to me by a mutual friend as a good coder and entrepreneur. My friend also mentioned that Allan was a extremely strong Christian so I shouldn’t cuss in his presence.

For about a year or so Allan and I did some freelance work for people. I would do the design and he would code. It was a small but smooth operation. We got on well.

A while later Allan approached me asking if I would invest in a new venture he had in mind. It was basically creating Myspace layout sites and arcade game sites, placing Yahoo ads on them, sending traffic to them and making profit from the Yahoo ads. He was making great ROI on his own investments so I thought this was great!

Great idea, working business model,  trustworthy business partner, what could go wrong?

Investing started.

I was approaching the end of school and University was on the horizon. So this seemed like a perfect time to start picking up business. Allan asked me for some investment money around $xxx. It was big money for me at the time,but there seemed to be minimal risk. The terms were that we each put in 50% each of the money and we each got 50% of the profits. We built the websites together. He gave his secret traffic source contact “Mr Middleman” the funds. Then traffic started.

We sat and watched as money started coming in. Instead of the ROI being 1:2 it came out at around 1:4. Things were looking HOT!

But, payment terms were slow and we only ending up getting paid every 45 days. After the 45 days rolled past we got paid low $x,xxx each. Wow were we happy! So we decided to invest a lot of that money for the next month. 45 days later we must of made high $x,xxx each.

Things were getting exciting.

His initial payment to me gave me confidence. Plus his STRONG repeated references to his family’s religious adherence gave me further assurance. I invested another mid $x,xxx which was the max we were able to spend at the time (so I was told). 45 days later that money turned into around low $xx,xxx.

Wow was it the most amount of money I had ever had under my name! I had enough money to rent out as many DVDs as I could handle!

The big push forward.

I approached my parents, my sister and my girlfriend asking if they wanted to invest in my new profitable business.

My parents said yes and sent me mid $x,xxx.

My sister trusted my parents’ decision so she too invested mid $x,xxx which was a big chunk of her savings.

My girlfriend said yes and put forward mid $x,xxx which was her university fund.

I said I could return them double their investments within 90 days. I felt like a hero! I had the possibility to really help my family and girlfriend.

Allan gave me confidence that we could turn this approx $18,000 (family money) +$17,000 (my money) somewhere close to the $100,000 mark. So based on our previous successes, our solid 2 year relationship, and his “Christian” values I sent him the $35,000 to pay for more traffic.

I was told that it would take a while for Mr Middleman to “tweak” and “optimize” the traffic campaign in order for it to start running. No problem I thought to myself.

Over the span of a month he convinced me that the campaign was not running for one reason or another.  Allan was telling me Mr Middleman had a holiday, then attended a wedding, then was tweaking. There was always something new. I started getting stressed about it so I asked for Mr Middleman’s contact details.

That’s when things started going sour.

Allan kept on dodging the question when I asked for Mr Middleman’s contact info. So I took it upon myself to track down Mr Middleman on my own. I finally found his contact info.

I contacted Mr Middleman. He thought I was some CRAZY nutter. He did not want to talk to me at all.

Somehow Allan convinced him that I was up to no good and was crazy. Once I plead my case and started talking about lawyers to Mr Middleman, he came around, but, was not helpful at all. Maybe he knew what was going on and felt scared himself. Who knows?

Anyway I went around in circles for a month trying to knock some sense into the two. Each were blaming each other. I sent out legal letters from New Zealand with no response.

At 20 yrs old I was in my second year of university. In one foul swipe I had no income. I had $18,000 non university related debt ($36,000 NZD at the time) owing to my parents, sister and girlfriend. I also lost $17,000 ($34,000 NZD) of my own money. Topped off with a bunch of grey hairs (literally).

What did I learn?

  • Sad to say but, don’t trust anyone with online business. Anyone I work with now have to earn my trust. It’s not there by default.
  • Don’t be over accommodating. If you have a problem with something, mention it early. Push back.

It wasn’t all bad…

This scam really built a motivating fire in my stomach. I needed to make something work in order to pay back my family. There was no option.

It resulted directly in leading me to pursuing affiliate marketing, and where got me where I am today.

It is likely everyone will get burned in business. Personally I’ve been burnt a few times, with a lot more money than in this story, but this example hurt the most because of circumstances.

Hopefully timing and price will be kind to you and you can learn from it.

…Oh, and one last thing. Allan if you’re reading this.

Flick me an email sometime. I’d love to talk.

xoxo

Comments (218)

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  1. DinoVedo says:

    Seems like everyone gets scammed one way or another in the online marketing world.. sometimes like you said though it can be the motivator to make even more so not always that bad…..

  2. John says:

    WOW, that sucks man… thanks for sharing. I'm a bit surprised by the ending though – it looks like you have some class 🙂 Its gotta be tough to not want to track him down and rip him apart.

    But you know how things like this go. I'm sure he is getting a few karma bitchslaps in his life for it.

    On the brightside, and as you mentioned, it gave you that fire to succeed and pull-through… so congrats on that!

    P.S. Write another guide like you posted in the STM forum. That is one of the best affiliate marketing posts ever 😀

  3. d3so says:

    What an unfortunate experience. I assume that the case remains unsolved?

    I haven’t gotten scammed so far. Though, I’ve been getting emails from people asking me to invest in their ideas.

  4. jordan says:

    I was scammed the very first action I took in my IM journey. The numbers isn't anywhere near as yours but still hurts.

  5. Sindre says:

    I'm still recovering with dept from getting burned on an attempt on starting a webdesign firm. Mid-low $xx.xxx. So now I'm looking at affiliate marketing or internet marketing in general to find a way to get rid of this without ruining my whole private economy for years.

    Great post, it's nice to see that its not just me who get burned 🙂

  6. ProfitsIM says:

    That's not cool. Have you considered contacting these guys: http://protection.ppc.bz/?

  7. Max says:

    Welcome to the club. I've been scammed by different affiliate networks for over $200K over the years

  8. What happened to the middleman? He obviously had a prior relationship with Allan…probably just as much of a scammer. Probably also knows where Allan is. What a dick.

    • mrgreenam says:

      He's still around…actually in the affiliate arena.

      I chose not to mention his name because I'm not entirely sure how much he knew…

  9. Liam says:

    This sounds like an example from the 48 Laws of Power… Was the initial income legit or was he just trying to build you up for the fall in some kind of long con?

    I guess what I'm asking is, if you had a good working method, what did you need him for?

    • mrgreenam says:

      It was legit, but he was smart keeping a lot of things out of my reach, telling me the bare minimal.

      Remember this was one of my first ever business ventures so I was wet behind the ears, I didn't ask questions just did what I was told…didn't want to interrupt.

  10. Mark says:

    I like these kinds of posts. Not because I'm morbidly happy to see someone else fail but because I can identify with making mistakes and it's encouraging to see someone share their failures and how they dealt with the fallout. Thanks.

    About 5 years ago I bought a flash game site, purchased a Yahoo Publisher Network invite from a friendly fellow in China, purchased super cheap "play free flash games" clicks on Google, stuffed the site with health themed YPN ads (acne, fat loss, etc.) and proceeded to rake in fat cheddar…for about a month.

    Yahoo understandably didn't cotton to my machinations and promptly confiscated my significant…ahem…earnings. (Yet I had about 30 days of Adwords bills to pay!) When I tried to foolishly purchase another YPN beta invite the "friendly fellow" tucked my wired $600 into his waistband and I never heard from him again.

    A hard lesson learned.

  11. chino says:

    Ahh the wonderful world of arbitrage. I have dealt with similar situations with traffic generating partners trying to scale up and ending up messing everything up in the process.

  12. barman says:

    Now tell the fb aduploader story!

  13. I posted a story on my blog about 3 weeks ago about how I was scammed by my partner who I had worked with for over a year and made lots of money together. Luckily, I had gotten most of the money from the business and only invested a few hundred, except a ton of content that he tried to steal. And I mean about 1,000 articles that I have bought off of freelance writers with extra content. But after a bunch of DMCAs, he quickly deleted it all.

    Anyway, my story pales in comparison to yours, but the message is still clear that you need to always watch your back and trust no one. Glad it lit a fire under your butt though!

  14. John says:

    fb aduploader story guess….

    Mr. greens coders start scraping Facebook ad targeting keywords at a furious rate and think FB wouldn't notice, but they do. amirite?

  15. thanks bro says:

    have you considered finding allan and killing his children then him?

  16. John Marino says:

    Gotta love information available on the internet nowadays. http://www.spokeo.com/
    ^type in Allen Jerman. Perhaps you can find his contact information and ask him a few things on your mind…

  17. It's one thing when it's your own money and you take the risk. Losing your family/friends money takes it to a whole-nother level. Those 2 guys will see their bad karma soon enough i'm sure. Great that you bounced back hommie.

  18. Stuart says:

    Don't get me wrong, its awful that you got scammed and not only did you lose your money, but money from your family. But it is so helpful to hear about the mistakes that can be made in internet marketing and the pitfalls you need to avoid; rather than the usual "here's how I made a crap load of money in a week". Thanks for the helpful and inspirational story.

  19. WakaWaka says:

    That's what should happen…
    "Back Against The Wall" is one of the
    best changing agents that will push you
    through your potential.

    I love this story man

  20. […] “My Story – How I Got Scammed $35,000“ – Don’t let this happen to you! Find out how it happened to Mr. Green and what he learned from the situation. Could you be trusting the wrong people online too? […]

  21. […] “My Story – How I Got Scammed $35,000“ – Don’t let this happen to you! Find out how it happened to Mr. Green and what he learned from the situation. Could you be trusting the wrong people online too? […]

  22. Vlad says:

    I told you we should get this sucka and whoop his ass, you never listen though.

  23. Spewing, I can imagine how hard that hit you especially at an early age. All up hill for you now, right?

  24. scammersuck says:

    man, this post pisses me off lol. Although I'm sure you got pissed about the scammer and such, it seems like you are fine with it in the end as an expensive education…Personally, I say eff that. I would have stalked his scamming ass and made him really regret stealing my money like that. Hell, I'm in Southern CA and SD is pretty close. I could even go give this guy a visit lol.

    What pisses me off the most is the douche is probably laughing his way to the bank and thinks he got away with it. Not only that but he probably figures it was so easy he will continue to screw other people over.

    People have been murdered for a LOT less…the dude should try to clean his slate as best he can and go bow to his silly "god" and repent lol. Figures though, some of the worst people out there claim to be "christian" and end more evil than anyone.

    • mrgreenam says:

      If you look at my position, I was 19-20, based in New Zealand, in the middle of university, owing a lot of debt, with no sustainable income.

      If I decided to go after him, I would of had been distracted away from university. I would of had to get more funds for lawyers. There wouldn't of been any certainty of recovering my money. If I were to recover my money I didn't know how long it would take.

      I was in a reck already, I didn't want to risk anything more.

  25. NegBox says:

    I don’t get why Allan would turn around and run with 35k when there was real profit being made by you two – you commented the profits were legit. He could have had 35k about 90 days later by just reinvesting. Was he retarded at math? Or… Was this his way of gaining complete control of the sites and cutting you out?

    • mrgreenam says:

      Cutting me out meant he could of had 100% of profits.

      The $35,000 was enough for him to float the campaign.

      People change when the see money…

  26. One of my friend faced the same problem and finally he got the decision to use the scam.com and make a thread with the cheater name and it helped him to solve the issue.

  27. Joel says:

    Good story and good lessons. Same sort of thing happened to me. Was buying CPM mail on a smaller scale…they gained my trust, I was scaling / testing more….Sent $16,000, their mail went down….they wouldn't answer me…blah blah blah….$16K gone.

    I'm over it, but every now and then at night I get super fucking mad and sweaty hahaha

  28. peetu says:

    and i thought i have been scammed badly…
    were "only" around 4-5k and it was my own money. but well, it was the money my parents and other people gave to me as a gift. and i burned it all, i dont like to think of that but your story reminded me of it.

    your circumstances were much worse. props to you for pushing forward!

  29. Sonam says:

    How much did you lose in the FB Ad-manager software?

  30. Jay says:

    Sorry to hear about your experience. I had something similar happen in the offline world, which turned out to be a Ponzi scheme from someone who I thought was my best friend. Sometimes its hard to see the forest for the trees. I got wiped out to the tune of 200k (in credit) within about a year and was thinking of busting a cap in this dude's ass, but life in prison isn't worth any amount of money. I was just getting into IM at the tailend of the fiasco, which I'm sure helped with the success that I've had. Four years later my credit still kind of sucks but I can buy pretty much anything that I would want with cash. The experience has definitely affected my relationships with people that I know and deal with, but life goes on.

  31. Your story provided a good lesson. Thanks for sharing.

  32. makemoneycure says:

    Hey,

    I am gutted for you, I too got scammed and wrote about it – http://makemoneycure.com/how-i-got-scammed-on-fli

    It's a shame people have to do this but you need to focus again and make positive things happen like I am doing. In business we take risks, some pay off some dont but if you keep on you will end up successful!

  33. Sorry to hear about this. It's really hard to find people you can trust nowadays. The best thing to do is learn from this experience and move on.

  34. yogev lif says:

    I think the main lesson is transparency. if you work as a team and you buy traffic together from someone you should have access to him as well as your partner…
    of course that it seems that there was no way you could see it coming because he helped you earn money before…

    quite an interesting story I must say

  35. Sad to hear about the story but it was a lesson indeed. You'll surely be rewarded and the scammers will earn their rewards, too.

  36. jeffrey says:

    One "foul swipe"? I guess you mean one "fell swoop".

  37. Poor guy MR. x
    sorry to hear this..
    yeah… you said right.. not to trust anyone

  38. Miss green says:

    What goes around comes around I say, I'm really admire you brother

  39. Irwan Subianto says:

    I'am so sorry to hear that, and i want to said Thanks to share us for your own journey story,may You can get back your money from Affiliate Marketing,can i give some suggest? Don't Blame Yourself for this case, it can make you stronger if you release your fogiveness for Mr.X

    Regard
    Irwan Subianto (Indonesia)

  40. Kaan says:

    This was a sad story, however, also a very educative one. Thank you for sharing.

  41. Fake guy says:

    Test comment probably fake

  42. Lily says:

    Sorry you went through that. I was scammed too. It's an awful feeling. You aren't alone. At least your wiser now and it won't ever happen again. Take care and forgive yourself.

  43. Alan says:

    But you have to start somewhere right? And he did do his due diligence ie. christian values, 2 years working together etc…it's not like he jumped into it blind…. What else could he have done more to determine whether this was right or not?
    Especially when it comes to online business….it's recommended you find key people who can help you on this journey… it's difficult to find the real giants from the trash as there's so many online marketers out there.

  44. Jon says:

    Would that “middle man” be Brian Evans? They got me too.

  45. george says:

    Its a sad story. It is difficult to refund money.

  46. So did Allen returned the money?? I have got burned too but it was just a small amount and then I never trusted any one.

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    Sorry to hear that you got scammed. Hope the guy burn in hell..

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  103. If you want to get much money, don't be lazy

  104. Great post i need to say and thanks for the data. Education is unquestionably a sticky subject. However, continues to be among the leading topics of our time. I appreciate your post and appearance forward to a lot of.

  105. Pakar SEO says:

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  106. many scam programs out there, Inever experienced too, though not as big as it was.

    I seding heard the story but keep the spirit!

    Baby and Kids

  107. You're making that enjoyable along with you still care for for you to stay that sensible. We cant hold out for you to read far more by people. That is actually any great web site.

  108. motarum says:

    age 18 years with a savings of about $ 800USD have in the bank already includes pretty, if only not a scam
    thank for your nice story…
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  109. holy cow!!! hope you can take the good from this trouble…. 🙂

  110. More Comment about this. I'm impressed! nice work dude.

  111. i love this blog, very good article

  112. Greeting! Very interesting article. The explanation is fairly easy to understand and be understood.

  113. thanks for sharing.. will inspire a lot of people

  114. it's sick bro, but congrats bro hehe

  115. Thanks for sharing it. Sorry to hear about this. It's really hard to find people you can trust nowadays. The best thing to do is learn from this experience and move on

  116. ancika h says:

    I really sorry, but the important thing as a businessman is how to get up from your situation and get start another business. asuransi kesehatan terbaik. We should realize that business is like trial and error so the most important things is how to manage the risk until we found the right formula for our business. Harga Emas. Thanks for sharing it

  117. World peace will be created if we are patient with each other

  118. najibherbal says:

    xcacac

  119. It’s going to be ending of mine day, but before end I am reading this fantastic post to increase my know-how.

  120. harga says:

    Excellent post. I was checking constantly this blog and I'm impressed! Very useful information particularly the last part 🙂 I care for such information much. I was looking for this certain information for a very long time. Thank you and good luck.Kelebihan dan kekurangan samsung

  121. It is sucks, please be careful
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  122. kyesoke says:

    i think you must be carefull

  123. ihsan says:

    wow!! this is rarely document,is amazing thanks…..

  124. Leticia says:

    We can't saw a person from an outside. For this open information, we need to more be careful. We can't trust anyone we know in one or two days. <a href="http://www.baliandvillas.com” target=”_blank”>www.baliandvillas.com

  125. Excellent post. I was checking constantly this blog and I'm impressed!

    Read more: http://www.mrgreen.am/make-money/my-story-how-i-g

  126. What youre saying is completely true. I know that everybody must say the same thing, but I just think that you put it in a way that everyone can understand. I also love the images you put in here. They fit so well with what youre trying to say. Im sure yo

  127. iam sorry to hear that, i think this is tragic, my friend just scammed to from forex investation but not as much as you, u should more careful with online business/investation

  128. There is always lesson we can take..it can be a very useful experience, as the wiser says 'experience is the best teacher' Cepat Hamil

  129. toko bunga says:

    Im so touch about your story. It's like we dont trust others people instantly at tihis time. I can learn from your story, and I hope you get the best experience.

  130. Rosalyn says:

    Hmm is anyone else experiencing problems with the pictures on this
    blog loading? I’m trying to determine if its a problem on my end
    or if it’s the blog. Any suggestions would
    be greatly appreciated.

  131. […] My Story – How I Got Scammed $35,000 – Mr Green […]

  132. Nice post. I was checking constantly this blog and I’m impressed!
    Very useful information particularly the last part 🙂 I care for such info much.
    I was looking for this particular info for a long time.
    Thank you and best of luck.

  133. […] My Story – How I Got Scammed $35,000 – Mr Green […]

  134. hendra says:

    thanks for sharing

  135. pacomet says:

    Nice posting to motivation me make money online

  136. You know, i have been getting scam over $ 1000 when i starting my Internet Marketing Business. I bought some ebook, tutorial and useless software. But with that experience i learned about how to build credibility in my business. Now i start up my online shop and trying to keep my customer faith. Nice share brother…

  137. dont give up, keep trying!

  138. Hi Mr.Green, your story is very inspiring, success usually starts from a failure or deterioration.

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