Archive for month: July, 2021

Ban in Norway, tax debt in Turkey, penalties in Italy: despite many conflicts with the authorities, Lyconet and My World continue to solicit members to generate income via vouchers!

On July 23, 2021, this article appeared in one of the largest daily newspapers in Austria!

Here is the link to the original and below the translation: Wie Lyconet und Co ihre Kunden mit Rabatten abzocken – Geld – derStandard.at › Wirtschaft

Of the more than 35,000 euros that Nina G. invested within a year, she did not see a cent. According to Lyoness, G. would have had to recruit more people or buy more clouds to avoid being demoted in the internal “career system.” Only after a grueling trial was she awarded the full amount by the Vienna Higher Regional Court in February. The court found that the money was “trickling away.” Lyoness’ compensation rules were “highly non-transparent.”

Several aggrieved parties

G. is not alone: Lyoness’ cashback program, which now operates under the name My World, claims to have around 15 million shoppers worldwide. More than 600,000 are said to be in Austria. Lyconet is the name of the current company responsible for marketing. According to its own information, it counts half a million marketers, 13,700 of them in Austria. According to Lyconet, these are independent entrepreneurs who recruit other people for the discount system, but also invest themselves. In the case of G., the court ruled against this entrepreneurial construction: G. was to be considered a consumer who purchased vouchers in order to receive promised compensation.

In October 2018, the OGH already ruled that Lyoness’ business practice at the time before 2014 was a pyramid scheme. The companies gradually gave themselves a new coat of paint. Officially, Lyconet and My World deny being legal successors of Lyoness. However, the company register shows: Lyoness founder Hubert Freidl of Graz – who resides in Monaco – is currently the sole shareholder of Glenside Holding GmbH, which used to be called Lyconet. And My World AG 360 historically called itself Lyoness Group AG and Lyoness Cashback AG.

Viennese lawyer Josef Fromhold, who represented G. and around 2500 Lyoness victims, also sees similarities in business practices: Lyoness, Lyconet and My World would work with terms and conditions that they change at periodic intervals to the detriment of their customers. The advertised “shopping community” was a “Potemkin village” and only the “façade for a concealed capital investment model”.

High penalties in Italy

In Austria, aggrieved parties are constantly fighting their claims in court, while in other countries the authorities are taking action. In Italy, the competition authority imposed a fine of three million euros on Lyconet Italy and My World Italy last December. The authority concluded that the cashback service was just a pretext to recruit others and to sell Lyconet products such as cloud investments. However, these clouds had no relation to any real economic activity: a pyramid business model that should be discontinued, the authority said. In Austria, the companies commented: The decision concerns only one product, which is no longer offered since March 2020. In Norway, the lottery authority also concluded that the activities of Lyoness, My World, Lyconet and Cashback should be discontinued. It was an illegal pyramid-like revenue system. The authority says that there are around 16,000 aggrieved parties in Norway alone and that people are still complaining. Lyconet itself had announced to the authority that it wanted to continue the business. When asked, the companies let it be known that the ban only affected Lyoness Norway and Lyoness Europe AG, but not My World Nordic AS or Lyconet Global AG.

While the noose for Lyoness founders Freidl and Co tightens ever further, My World sees only one “next logical step”: the IPO. In an online seminar at the beginning of July, in which DER STANDARD participated, future shares were advertised: Those who buy virtual points in the form of clouds or discount vouchers now could exchange them directly for shares at the IPO. Every month there would then be distributions. My World was compared with no lesser companies than Apple or Google. However, the seminar leader also warned that the word “share” should not be used externally, as this would be liable to prosecution.

DER STANDARD also asked for a statement here and learned that these points are converted into company shares regardless of the planned IPO. However, the points could not be bought, only vouchers. The points are a “free incentive,” he said.

Internal IPO documents, dated February of this year, mention international business consultant Deloitte. In an online video, Freidl said “Deloitte’s stock market experts” expect My World’s IPO to be worth “tens of billions.” When asked, Deloitte denied an alleged assignment. MyWorld’s response to the STANDARD inquiry: Deloitte Austria handles the tax audit in Austria and has very well delivered first calculation models.

In 2017, the Association for Consumer Information (VKI) organized a class action lawsuit against Lyoness following an OGH ruling. Since then, the focus has been on monitoring: Lyoness has been an issue for around 15 years, and there have also been exchanges with international authorities, according to the ministry of Wolfgang Mückstein (Greens). The VKI welcomes the ruling in the case of Nina G.: “The new Lyconet conditions are just as non-transparent as those that the OGH already declared null and void,” says Ulrike Wolf from the VKI (Association for Consumer Information)

• The name has been changed by the editors.

Many thanks to the editor Mr. Laurin Lorenz for his accurate research!

Our MSc. Laura Husar moves to another media company and hands over to MSc. Nadja Messinger!

Lyconet level 8 Terje Duesund tells TV station: “…….that the Lyoness company behaved illegally. He believes he did not defraud or deceive the participants himself”. 

(Detailed contribution from BE-TV will follow shortly!)

The Lyoness/Lyconet/myWorld shopping network is also being sued in Norway by former members who have lost large sums. In total, the Norwegians invested half a billion kroner (about 49 million EURO or about $57 million) alone, probably even more. The money ended up in the distribution network at Lyoness, organized by Lyoness Europe AG, based in Switzerland. As in all the other countries, people in Norway believed in financial success. In  just a few years a multiplication of money, as a return on an investment, has been promise, so the accusation of the aggrieved parties.

Lyoness Norway was founded in Norway in 2012, and in the following years the business grew rapidly at first, as it did in the other 50 or so countries, which is the initial nature of any pyramid and snowball scheme. Siblings, parents, colleagues, friends and acquaintances recruited each other. The concept is the same as in all pyramid and Ponzi schemes: promising high profits.

A Norwegian court will now investigate whether there is fraud regardless of civil claims!

On May 31, 2018, the Norwegian Lottery Authority decided that Lyoness must stop all activities in Norway, as the business is an illegal pyramid-like trading system.

The global network company Lyoness/Lyconet/myWorld is now being sued. Currently, dozens of people are officially involved in the lawsuit, according to a Norwegian law firm.

A lawyer at the firm explains, “However, it is expected that far more people will follow after the case could now be presented by the Oslo District Court’s ruling on May 21. The main reason for filing a lawsuit, he said, was the Lottery Authority’s conclusion that the business was illegal within the period in question. Lyoness wanted the case to be handled in Switzerland, which is also pointed out in the members’ contract. We felt that the contracts cannot be used as a basis for a compensation case, as the case is based on the fact that the business was built on illegal contracts,” as she explained to the TV station.

The law firm is satisfied that a lawsuit will now also be filed in a Norwegian court, as the plaintiffs are Norwegians, and the business is geared and adapted to the Norwegian market.

The operation of “Procando” was discontinued in Norway and then continued in Malta. Terje Duesund moved on and started his career in the “global corporation Lyoness”. Here he quickly became successful, Lyoness offered him the perfect platform for his kind of work.

In the initial phase of Lyoness, the distribution of Lyoness in Norway and Northern Europe was coordinated by Terje Duesund. He has officially left the company in the meantime but continues to be a key figure in the distribution of the network concept.

A reward that the Terje Duesund received for reaching the top as a marketer in the Lyoness network. According to the magazine “Bergensavisen”, which followed the doings of Lyoness intensively for some time, Terje Duesund is one of the few Norwegians to belong to the so-called “President’s Team” in 2017 and is thus one of the leaders of the pyramid, ponzi scheme of Lyoness/Lyconet/myWorld. And now he wants to no longer know of anything?

The editorship of TV 2 stepped up to date with Terje Duesund in contact, who explains immediately that he would not like to be interviewed before the camera. What is surprising, because he usually presents himself gladly with splendor and pomp in public.

TV 2 sent several questions by mail to Mr. Duesund, in which he was asked to answer some questions, among other things, whether he does not think that Lyoness was operating illegally in Norway.

Duesund, who was essential to the construction of the network in Norway and Northern Europe and points out “that the Lyoness company behaved illegally. He believes he did not defraud or deceive the participants himself.”  So he confirms that Lyoness has behaved illegally?

“I have always believed that the Lyoness company has operated in accordance with Norwegian laws, starting from the opening in 2013 until the cessation of operations after the decision. Personally, I started as a Lyoness marketer in 2013 and built an international trade network by working in 33 countries worldwide for many years…….my main task was to expand my team internationally, and I did a little in the Norwegian market,” he wrote in an email to TV editorial.

But where is all the money now, please?

In Norway alone, half a billion norwegian kronen (approx. $ 57 million), probably much more, was invested in the purchasing network.

When asked where all the money had gone, Duesund, suddenly miming the little marketer, said, “Questions about details of cash flow and money dispositions must be directed to the company by TV 2, as a marketer I have no access to this information.”

By the time he is being pointed out with a new email that he played such a central role in the company that it seems strange that he can’t explain cash flow, he responds:

“I urge you to respect my repeated answer – I have NO in-depth knowledge of the company’s international cash flow, how the money is distributed and used.”

“Both resourceful and vulnerable people, young, sick, disabled and elderly, were tricked into participating in Lyoness, believing it was legal and that they would get ten times more out of their money back in a few years if they invested in the business. As far as we know, very few have gotten anything back, and the Norwegian Lottery Authority sees reason to warn against Lyoness, myWorld, Lyconet and Cashback,” she continued.

Some young people have given up their education to work for Lyoness, and several family relationships and friendships have been damaged by the business, she continues in the TV report.

In general, most of the victims feel shame and think that they are to blame for the misery. That is why many choose not to go public. This is likely to change now.

More about the injured parties and the Norwegian lawsuit in Part 2.

And as always, the Lyoness/Lyconet/myWorld press office is welcome to comment, or if anyone has more or different information on this, please feel free to let us know. We are not interested in making false statements and our primary goal remains to provide the full documentation.