News: Flippa template seller type conman jailed for four years

[Clinton]

It seems the easiest type of business - there are thousands of "website flippers" telling us how easy it is to create a new site and sell it for a profit.

Some use the same template over and over again (or with minor tweaks). Others have become smarter in disguising their templates/turnkeys as real businesses by installing auto-blogs, inserting free content they've taken from article directories, even putting fake ads on the site to give the impression they are established sites and popular with advertisers.

The scammer in this story setup site after site using a £450 database and a basic site design. He then targeted middle class individuals who wanted to break out of the rat race and run their own business. He charged them tens of thousands of pounds.

His sales talk was very convincing. He demonstrated potential and had very plausible looking revenue projections. He took buyers to his own house in Cornwall and showed off his designer furniture and 81 inch TV. He was described as living like a tycoon with fast cars, speed boats and properties in exotic locations.

He created an illusion of wealth. And he convinced them to buy into it.

In essence, he sold them website templates at up to £40,000 ($60,000) a go.

He never listed at Flippa. Instead he used what other sellers - some good and some bad - have done before him and will no doubt continue to do. He targeted not the webmasters who've bought into the idea of running an online business via buying a turnkey from Flippa. No. He focused his efforts on the people who had the same desire to make a lot of money online but who weren't already aware of marketplaces like Flippa. He further ensured that he pitched only to those middle class individuals who had larger sums of money to "invest".

It has all the hallmarks the savvy buyer here has seen before at common marketplaces for buying and selling websites

The court was told that MacIntyre gave a number of reasons for wanting to sell the business, ranging from an intended move to Spain to a desire to spend more time with a new partner and baby.

In reality, the businesses he sold ... had never made money.

MacIntyre would often call potential clients once a day to pressurise them into a sale.

(He) would also offer his services as a consultant for fees of thousands of pounds when alleged victims complained they were not making any money.

Yesterday he was jailed at Cornwall Crown Court for four years.

Judge Paul Darlow told him:"These offences were sophisticated and involved the careful illusion of wealth generated by successful businesses....

"Families parted with up to £40,000 and resulted in misery for them, and in on case actual medical depression.

Other links about this criminal: 1 | 2 |

Note: Please draw no parallels between this case and the business of any existing member of our forums.

[Andy]

Seems like there's always someone ready to fall for a con.

Andy

[Clinton]

What amazes me is that the serial turnkey sellers on Flippa go to so much of trouble and have extensive ebooks on the art of making another $10 out of each sale and people like MacIntyre rake in seven figure sums.

[Andy]

What amazes me is that the serial turnkey sellers on Flippa go to so much of trouble and have extensive ebooks on the art of making another $10 out of each sale and people like MacIntyre rake in seven figure sums.

Clinton,

Like any other business, it's just a matter of positioning.

Andy

[DomainMagnate]

Wow that's the first time I hear of a case like what.
So what exactly was he accused of? I mean obviously this was some serious con job going, but the problem with such things is there is usually nothing really illegal, so the vast majority of such con artists stay below the radar. Was it because of some faked revenues, or unrealistic projections, or lies about previous successes?

[benitez17]

Wow that's the first time I hear of a case like what.
So what exactly was he accused of? I mean obviously this was some serious con job going, but the problem with such things is there is usually nothing really illegal, so the vast majority of such con artists stay below the radar. Was it because of some faked revenues, or unrealistic projections, or lies about previous successes?

He was found guilty of fraud and deception. Fraud is illegal in most (if not all) countries, though proving it might not be the easiest thing to do. It sounds like all the fake revenue and lies about his track record are probably what brought him down.

My question is whether they were able to recover the money. If he has $1.2 million waiting for him on the other side of jail, he might not be that upset.

[Clinton]

DomainMagnate, that's a good question.

If you build templates and sell them to webmasters who are in the market for a template that's a useful service and a perfectly legit business.

But then it gets competitive and you start looking for non-webmasters and selling them templates. It's still a useful service - you're buying the domain and setting up a template on it and that'll save them time.

It gets more competitive and you work harder to convince these non-webmaster newbies that they can make money with your template though you know many of them don't have a snowball's chance. Still not a crime.

You take it further because you need more n00bs to buy into the idea and that involves getting over their natural fear of the unknown. You play the advisor! That's when it starts getting dicey.

- You build your site on a dropped domain that is showing some residual PR and you advise your buyer that your domain was first registered ten years ago. You point him to an article on how important age it. But don't feel the need to disclose that yours is a dropped domain and the clock has probably been reset.
- You do some keyword research, get the site to rank but don't tell him that the initial rank new sites get usually disappears after a few days/weeks
- You create his sales projections for him or point out (like Flippa does) what the PPC cost of the keywords are and base the site valuation on this i.e. inflated valuation
- You convince him about how much of money he can make even though you know that's vastly exaggerated

All of these, and more, are typically employed by some Flippa sellers. Not all, but more than a few. At some point it crosses over from legit business ... to fraud. There are a lot of Flippa sellers in the grey area in-between. And the ones commiting the fraud get away because, as benitez17 points out, this is very difficult to prove.

[Casey101]

This really irks me when I see sellers doing small-scale versions of this. As Clinton said, it's not a crime, but it's certainly not ethical. Especially when one thinks of the target audience.

I think of people like my dad who would be prime targets for things like this. Middle-class, hard working, honest people who are looking to (as Clinton quoted earlier) break free from warehouse jobs and minimum wage induced hopelessness. I just wish I could put up a big sign that says "STAY AWAY"

[Rover]

This makes no sense to me. It isn't against the law to take money from a sucker - only unethical. There are a lot of unethical sellers out there that simply can't be prosecuted because of their intelligence. Maybe the real problem is that this guy wasn't smart enough to sell you certified crap. As they say in school, caveat emptor. What's the difference between selling a template and taking off all the backlinks after you sell a site? Better yet, you can send out some keyloggers to steal proprietary ideas, make a million porn sites, become a registrar and fake all your info, and nobody will prosecute you, but if you sell an overpriced template you are going to go to jail. The real truth is that the authorities are pretty challenged mentally. The only reason this guy went to jail is that he was pretty dumb about how he went about it and it made it easy for the authorities. The real scammers out there are pretty much free and rich. In no way am I endorsing any type of criminal behavior. It's just sad that the big time criminals aren't getting caught.

[Clinton]

Nice to see you back, Rover.

The big time criminals could be caught easily. The less savvy you seem the more they'll exaggerate, fake, make false claims. If someone like you signed up, played stupid and recorded every conversation you'd have enough evidence to get them put away.

Anyone planning a sting may want to sound christopheravell out, he's very "passionate" about exposing scams (the style on his site may be a bit brash but ol' Chris knows his scams).