By Bryan Kramer
This part 3 of a 4 part series of articles providing insight into HOPROCKET a recently established US based internet travel membership company selling its membership in PNG.
The purpose of my articles is to help people determine whether the company is a genuine business or an illegal pyramid scheme disguising itself as legitimate Multi-Level Marketing Company.
Part 1 provided a general overview of the company's club membership the purported benefits to signing up as a member including their reward plans (commission structure). It emphasised the company was using pyramid style scheme to lure people to buy in. Further the scheme benefits those who are at the top of pyramid passing on the cost of their membership to the people under them.
Part 2 discussed in brief the company's origin and those behind it. It also discussed the difference between a legitimate Multi-Level Marketing company and an illegal pyramid scheme.
I later published a public notice alert by US Securities & Exchange Commission to beware of pyramid schemes posing as Multi-Level Marketing Programs.
In response the Governor of Bank of PNG published a similar notice in both daily newspapers making reference to HopRocket.
Following the publication of Part 1 the company's Chief Executive Officer Tim Richardson issued a statement disputing my views that HopRocket was a scheme. He noted while he respects my right to an opinion he claims it certainly wasn't accurate.
"We too want to make sure the people of PNG are protected from what he calls “schemes” and we do, and will continue to do everything on our end to care for, in this regard." he said.
He went on to state "we also work hard at HopRocket to provide the absolute best for all our Members and to give back to the economy and people of Papua New Guinea. We base the services we provide centered around an “consumption based economy” of which in simple terms is to provide value in goods and services bought by people."
He said he would also like to let people know a very important fact, that is 100% of every dollar received to date and then some has, and is being poured back and invested into the local PNG economy. Examples of this are as follows;
1) Plans to open two offices in Port Moresby & Kokopo
2) Plans to employ 4 people
3) Had corporate staff in PNG spending over 80 nights in past two months in hotel rooms - added another 30 nights
4) Hired a PNG law firm to setup a company for them - so more money invested in PNG.
5) Will hire a local Accounting firm - again more money invested in PNG.
6) Established a local bank account so will pay bank fees.
7) Commissions paid to PNG members which they expect them to spend back in PNG economy.
8) They have spent $10,000 of dollars in preparation of opening offices to support local PNG economy.
9) Spending Travel trip in June 2016 and will spend $50,000 in PNG during the trip.
10) Completed 4 PNG specific charity projects - example painted Port Moresby corination along with giving away K30,000.00
Mr. Richerson went on clarify depending on the type of membership a person purchases what they can receive in services when the join up with Hoprocket in brief they include
1) Access to their website where you can book travel for less and save money.
2) Access to VIP Hot Trips at prices you can't receive anywhere else.
3) Hopshop - (not yet available)
4) Hope Events:
5) Access to Training Seminars:
(Note I will explain in detail these purported benefits in my next article)
"The above are 17 different and specific examples of items that go along with HopRocket, all of which is part of our foundation to provide goods or services to our Members based on consumption" Richardson said.
Richardson furher claims they are making a big investment with local vendors in both time and financial resources into PNG. This is a long term approach that we expect can do good things for the local economy."
"Most important we see an opportunity as a company to make positive impact on the lives of the people in Papua New Guinea. This is an amazing country with amazing people and we want to be part of its future," he concluded.
It's important to note Richardson's response avoided most of the issues raised in my article.
So was Richardson telling the truth or telling lies?
1st Lie - HopRocket gives back to the economy and people of PNG. Every dollar received by Hoprocket and then some has been poured or invested back in PNG.
Truth: HopRocket takes from the economy and people of PNG using a travel website and deceptive marking practices to lure people to buy into it with a promise of significant savings on travel and a easy way to make fast money. The fact is the membership and monthly subscriptions fees collected are sent offshore and only commissions are sent back. I believe the margin of commission to be anywhere between 9-25% with 75%-90% pocketed by HopRocket. (I will explain the commission structure and margins in Part 4).
Further still a company with plans to employ four people, engaging nominal services of a local law and accounting as well as setting up a bank account that pays bank fees is hardly a significant investment in PNG's economy. In fact most long established businesses in PNG would find such arguments laughable.
2nd Lie - "We base the services we provide centred around an “consumption based economy” of which in simple terms is to provide value in goods and services bought by people."
Truth: HopRocket does not provide goods or serves it sells online membership to people to buy into a pyramid style scheme in the guise of making fast money.
3rd Lie - That that they wanted to make sure the people of PNG are protected from what I call “schemes” and they do, and will continue to do everything on our end to care for, in this regard.
Really? It seems Mr Richardson failed to elaborate just how he and HopRocket plan to achieve this. They don't have any legitimate cause or authority to protect PNG from anything.
Truth: They are here to make fast money and doing so by recruiting other PNGeans to help them do it.
4th Lie - Hop Rocket corporate staff spent over 80 nights in past two months (Feb & April) in hotel rooms in PNG.
Truth: On 19th February 2016 HopRocket corporate staff namely its Founder and Chief Sales office Fredrick Ninow, his wife together with Danny Liccardi travelled to PNG for the first time. They stayed only three nights to stage a one off sales/training seminar at Gateway Hotel on 21st February before departing the next day.
On 10th April 2016 they arrived back in PNG to host further seminars at Mt Hagen, Lae, Kokopo and Port Moresby. They spent 10 nights in PNG before departing for Brisbane on or about 17th April 2016.
On 5th May 2016 Fred Ninow his son and Danny travelled back to Port Moresby for a further tour. The stayed 8 nights and left on 13th May 2016.
In total it adds upto only 21 nights and not 80 as claimed by Richardson.
5th Lie - They would add another 30 nights of payments to local hotels next month (June) as well.
Truth: Mr Richardson, Fredrick Ninow, his wife, son and Mr. Liccaridi are currently in PNG and so far only spent upto 13 nights and I suspect they will be leaving shortly.
6th Lie: They completed 4 PNG specific charity projects - example painted Port Moresby Corination Primary School along with giving away K30,000.00
Truth: On first trip to PNG on 20th February 2016 Ninow and Licciardi visited Corination Primary School in Boroko. They donated a TV, Printer, school bags - The visit was recorded and downloaded onto YouTube there was no mention of K30,000 cash donation. On their second trip they visited the same school painting a classroom.
It's my view the Hope Project is nothing more than a front to conceal the company and those behind it true financial motive to exploit people in PNG. Evidence that supports this is view is that the day Ninow and Liccardi flew into Port Moresby the first venue on their itinerary was to make an event out of handing out school bags and later painting Coronation Primary School. This would allow them to market themselves as a legitimate and genuine company who are concerned about PNG.
So it seems Mr. Rirchardson has provided more misleading statements than any real answers.
Part 4 of this article will explain in some detail the company's operations from its launch in July 2016 in the US to taking up office in PNG. Why their entire executive management is now focused on PNG and no other country and the fact they don't have a real presence in any other country except PNG.
The claims of 50-65% savings in travel that aren't even there or available to PNGean. The deceptive marketing practices or tactics they adopt that has helped them reap millions of kina from PNG in less than 6 months. The company's founders history of being bankrupt on several occasions and as recent as October 2015. How the profits from PNG bailed him out.
Lastly we will look at the potential margins of profits HopRocket executives and representatives will profit from PNG versus what they offer, if any, in return.