When Puffing Turns Internet Scam & Becomes Internet Fraud

I provide a service, 5 Answers You Want To Know Before Making An Offer, that assists Buyers with initial “due diligence” to review an acquisition. Since the beginning of this year five of my clients have saved a combined $250,000 by avoiding Internet Scams and Internet Fraud. One client saved $25,000 by avoiding the purchase of a Sitepoint auction listing. Another client saved $100,000 by avoiding the purchase of a territorial franchise.

The most recent example occurred last week.

To clarify, nearly every Internet Business Opportunity seller will have a certain amount of “puffing” in their statements about their business. Why not? They are proud of what they built; and believe it has a bright future. You quickly identify statements like this, “your potential is to make Millions by improving my site”! That kind of statement about an Internet Business Opportunity is not an indication of Internet scam or Internet fraud to which I refer. What I refer to is “intentional misrepresentation”.

For example, the incident that occurred last week where a seller was advertising a “Canada Immigration Information” site for sale. My client was ready to negotiate a purchase price of $10,000 down and ten monthly payments of $1,000 each. For a total purchase price of $20,000. She paid my $350 “initial due diligence” fee and I went to work. The Internet Business Opportunity under review was profilebiz.com. The Seller had placed detailed information about the business at a non indexed page on his site. He, Dennis Surgatov,(aka Dennis Semenov), also communicated via email with my client making several additional claims:

Claims of seller, Dennis Semenov (aka Dennis Surgatov) regarding the sale of profilebiz.com:

Thank you for your interest to my Canada Immigration website (http://www.profilebiz.com).

1. Website is 100% automated. No inventory, no maintenance, no correspondence or any other contacts with buyers. Automatic products delivery. Automatic product updates.
2. You will spend not more than 30 minutes per day on work with this site. You can plan your time.
3. No any special skills needed from you. All work with the site consists of advertising only (I will give you the list of services).
4. You will receive full lifetime support and assistance from me in all questions. You can contact me at any time. Plus to this I have already composed detailed written instructions for the new owner on how to run this site.
5. Website made $10,000 in the last 90 days (see stats page). It is growing now and will be growing in the future. For example, 50-100 new backlinks are being indexed by Google every week! I will teach you how to support this growth.
6. Yes, you should keep in mind $500 as your monthly advertising budget. Really there will be some less, but this sum will definitely cover all advertising expenses. I will pay for some of the ads by myself. It will also help you.
7. If you want to reach $10,000 monthly in sales – you will need to do some things. To increase the promotion, of course. Secondly, to order some SEO services. And to add an US Immigration guide for sale. I can help you with all these points if you decide to start your work with Canadian site.
8. Website started selling the guide in August 2006. I can send you old reports if necessary. Advertising was stable: around $400-$600 per month. It consisted of various submissions, artcles and reviews placement, paid links, forums and blogs posting, etc.

First thing I check is not related to Internet Scams or Internet Frauds, but whether the site for sale can sustain competition in a category of Internet business; plus continue to grow. This is called my “Vicissitude Ratio”. In the case of this site the information was: “Canada Immigration” – Average Monthly Searches: 141,494; Vicissitude Ratio: 27.12; which was positive for growth and competitive advantage.

My next step is to check whether the stated owner has had any previous “bad acts”; or claims against them for Internet Scam or Internet Fraud. This is three simple search engine queries using the Registrant’s name and adding scam, ripoff, and fraud. In the case of this registrant I got the following search result in Google.

Rip-off Report: Dennis Semenov / Dennis Surgatov / Global Variant …

- Apr 23Apr 17, 2009 … Dennis Semenov / Dennis Surgatov / Global Variant Deceptive sale of website with no value Nationwide.
www.ripoffreport.com/reports/0/444/RipOff0444386.htm – 45k -

This becomes Warning Sign #1 that there may be a sign of problems with this Seller. This is NOT a definitive statement merely a sign to investigate farther. The reason for this is in the competitive business of Internet Business Opportunity competitors may plant false information to discredit a competitor.

Next I used a special domain name tool to research domain ownership back to 1995. I was looking for any other domain names that had ever been registered using the name Dennis Surgatov or Dennis Semenov. I found several, but concentrated on two … treysweb.com and getsetexchange.com. A simple matter of checking whois information on these two domains provided email addresses for the current owners. More on this later.

Next, I begin researching the claims of the Seller (see above). In every Internet scam or Internet fraud there always seems to be some claim of the Seller that trips them up. In this case, in claim 8 above the Seller states “Website started selling the guide in August 2006.” This one is simple to check. A site, archive.org, has been indexing home pages of websites since day one of the “Net.

In February 2008 the site profilebiz.com looked liked this: http://web.archive.org/web/20080214181243/http://www.profilebiz.com/

The seller made a material misrepresentation. The site could not have been selling an e-book on Canadian Immigration in August 2006; as the site was selling Business Management Services in February of 2008.

The complete record of website changes of profilebiz.com can be viewed here: http://web.archive.org/web/*/profilebiz.com

In claim 5 above the seller states that he is adding 50 to 100 new “backlinks” per month. Backlinks is a clearly defined term. Meaning active links that lead the Internet user from one website to another website. In the info page the seller claims an existing 8,000 backlinks indexed in Google. For a first time Internet Business Opportunity buyer this 8,000 seems impressive. However, the seller is misrepresenting the backlink count. Either he does not know the definition of backlink, or more likely he is preying on the unsuspecting first time buyer. His actual Google backlinks are not 8,000, but “4″ at the time of writing this post. Backlinks are essential to the Page Rank system of Google; and ultimately on how well the website places in search engine results within Google.

I check a dozen other information points when conducting an initial due diligence, but only do those when the first steps show positive results. I did email the seller Dennis at disliz2002@gmail.com requesting that he set up 3rd party analytics, such as Google Analytics, and add me as a User to verify the traffic claims. Further, I proposed a “GoToMeeting.com” session to access Dennis’ Clickbank account in real time. I did not receive a response.

In the case of profilebiz.com my job was nearly complete. I waited a few days for email responses from the two other domain name owners where the prior owner was the Seller Dennis.

One registrant responded, “Please do not have your client purchase from him, I have no proof, but my sales were WAY less than he stated and I did his suggested “advertising”.”

The other responded, “Im sorry i don’t have ant good news for you. I paid a lot of money for this site and gotten nothing back. Just a few sales. Nothing like he promised. I have done everything for ppc, banner ads, software submitting sites and more. Basically everything he told me I did. The only thing i didn’t do was seo. The only reason was i ran out of money for that. Now he is trying to sell the site and get my money back. I don’t know how he will sell the site for what i paid for it when it making no money. I can give you five more people that are in the same situation. All paid good money for a site that make nothing. Let me know if you want to talk to them too.”

This final information, along with the other research above, was sufficient to advise my client to not buy profilebiz.com; and to further explain to her that she had avoided buying an Internet Business scam from an Internet Fraud.

This Internet Business Fraud is still listed at auction on Deal A Site.

Other domain names owned, or previously owned, by Dennis Surgatov,(aka Dennis Semenov) include:
globalvariant.com
rusartshop.com
sittingdogtraining.com
buymydev.com

eBay profile of a Dennis having the User name disliz2002 which is the Email name of the email address for Dennis, disliz2002@gmail.com

I did a a bit more research for this article and I would estimate that Dennis Surgatov,(aka Dennis Semenov) has defrauded or scammed Internet Business Opportunity buyers of at $100,000. Keep in mind my research did not include any other alias of this individual.

Update: November 4, 2009 – It appears to Dennis Surgatov/Semenov has resurfaced as Tatyana Veretennikova selling the identical website, but at a different domain name.  http://www.toneca.com  You can view the bogus listing at Established North America Immigration Website