Anti-saturation, Anti-pyramid Anti-Security, Anti-Scheme to Defraud

The Appeal Panel failed to understand Hosseinipour’s argument about anti-saturation plans.  Instead, the panel focused solely on the legitimacy of the 5,000-person cap, which Judge Nalbandian conceded was contraindicative of a pyramid scheme.

However, Hosseinipour’s key argument was that the “customer reliance” incorporated into the plan would reduce or eliminate the need for recruitment. Overwhelming evidence supports the anti-saturation plan.

The panel’s reliance on subjective product valuation overlooks that the actual plan—per the programming—required distributors to use the i2G products or direct customers to use the products to earn, stay active, and advance in the plan.  

 (Exh101a,101b documenting product and usage purchases resulting in commission, (101c) casino transactions demonstrating commissions earned from casino chip purchases, (exh 145) conference call definite the 25% of casino usage paid as commissions,  Doc 487 #3857- 3874 Dr. Keep documentation of 1.2 million in casino chip usage resulting in commissions, ie R.497,#4028,29, 48-49; R.505,#4551-52; see App’x047-48,59,84, See, e.g. R.504, #4309-11; R.497, #4063-68; testimony affirming customer reliance in i2G plan, Exh 158 6 ways to get paid, 104, 107a, 107b, 106c) 

Reynolds best explained the I2G plan he programmed with “built-in” consumer reliance to earn commissions and advance based on product sales and “usage” without the requirement to recruit (Doc 497 4021-23, pp. 4028, 29,  4035, 36, 4043-49). Distributors could advance to the emperor level based solely on product usage (Exh 497 4036). 

The panel mistakenly understood that “no recruiting required” meant that no work was required to gain “passive income.” However, overwhelming evidence disputes this and points to the requirement of driving customers to the casino. The requirement for product usage, however, is outlined in the I2G program rules (see doc 497, #4021,22) and identified as an advancement means without recruitment. The panel misunderstood these requirements due to more government misdirection away from their evidence.

Moreover, Reynolds identified the retail “casino customer” that generated “distributor rewards” from “outside retail customers” without recruitment. (Exhibit 102, Document 497 4043-49). He emphasized that the commissions” generated from casino chip usage were the ‘whole point’ of the plan. (Doc 497 #4048)  The connection between product usage and distributor rewards, unrelated to recruitment, disproves the existence of a pyramid scheme, per Koskot. 

 For the same reasons, this disproves a securities offering or scheme to defraud based on an “abstruse” definition of a pyramid scheme. There is no question that this plan was being promoted and was occurring. Indeed, you can’t disprove a defendant’s mens rea with a plan, by its very design,  that does not fit the “abstruse: definition of a pyramid scheme.

Moreover, as product usage increased, the need for recruitment to earn commissions diminished. The plan was working, as evidenced by $1.2 million in casino chips usage, which generated the same commissions independent of recruiting.

The anti-saturation plan, explained in Hosseinipour’s videos and the i2G materials, documented that 25% of the usage of the I2G product generates commission without the need to recruit others. Hence, the slogan “earn from every bet placed.”

The company’s materials support the anti-saturation plan, as highlighted in the company’s PowerPoint tagline: “Get paid to play,” relating to commissions earned from “customer play” at the casino without the need to recruit. (101a, b, c) 

The Emperor cap of 5000 supports the I2G plan to shift the focus from recruitment to acquiring customers to use the I2G products, which generated the same commissions under the plan. This approach would allow the company to achieve indefinite growth without relying on recruitment, avoiding market saturation.. 

Hosseinipour presented substantial evidence to support her argument, surpassing the minimum requirements outlined by Judge Nalbandian. However, she was denied this affirmative defense twice; First when defense expert Warren was prohibited from raising the anti-saturation argument. The government argued that the anti-saturation argument was irrelevant as I2G faced no risk of saturation and would not raise the issue. Despite this promise, Dr. Keep strongly argued the dangers of saturation, which Warren could not rebut. The anti-saturation plan defense was again denied in jury instructions.

Judge Nalbandian noted the inconsistency of a pyramid scheme with no saturation risk. Despite acknowledging the odd concession, he failed to consider that this was related to the same anti-saturation plan that had been fought against being introduced.  Nor did the government address this contradiction or rebut Hosseinipour’s argument, which was critical to explain her consistent belief in the company’s legitimacy.

Dr. Keep, Anzalone, and associated materials (101a, 101b, 101c, 503b) confirmed that 25% of product usage generated commissions unrelated to recruiting within the i2G plan. This finding disqualified i2G from being classified as a pyramid scheme according to the Koskot standard, a security under the Howey test, and a scheme to defraud based on characteristics of a pyramid scheme. Currently, no law or guidance clearly defines a pyramid scheme beyond the vague descriptions provided by Koskot.

To establish a pyramid scheme, distributor rewards must be unrelated to product sales. This can not apply when “product usage” results in distributor rewards independent of recruiting.  

This is another presentation of the same argument- it ties in Nalbandian, which could be influential with him specifically.

The evidence of the anti-saturation plan also proves why I2G cannot be a pyramid scheme, a securities offering, or a scheme to defraud. The same argument demonstrated an “anti-saturation” defense that she was entitled to. However, the panel did not review the argument, nor did the government respond to it.

The overlooked “anti-saturation” plan argument also highlights the prejudice of denying her an “affirmative defense” through a defense expert, by barring Warren from presenting the “anti-saturation” concepts.  The primary reason for excluding Warren’s testimony was that “anti-saturation” was irrelevant because i2G had no risk of saturation.  This demonstrates prejudice and another misrepresentation to the Court, as the government strongly argued the concepts of saturation through Keep.   

Judge Nalbandian pointed out the inconsistency of a pyramid scheme with no risk of saturation, but misinterpreted its meaning and failed to consider what was implied, namely, Hosseinipour’s evidence of an anti-saturation plan. Nor did the government explain the contradiction.  This argument was especially crucial to Hosseinipour, describing why she continued believing in the company’s legitimacy as a mere distributor.

The panel failed to consider Hosseinipour’s arguments despite substantial government evidence supporting her claim, including testimony from three witnesses, three data exhibits, five videos, a conference call, the i2G business plan (document 503b), and the i2G business PowerPoint presentation.  The comprehensive evidence proved that an anti-saturation plan was integrated into the compensation structure, which linked rewards to the usage of i2G products, as outlined by Koskot. These commissions were not solely dependent on recruitment or unrelated to product sales.

The evidence established the direct link between distributor rewards and product usage, independent of recruiting. Distributors received real products and were directly compensated based on the product usage . This is not debatable, as all the government evidence affirms this.  For instance, transactions related to casinos and fantasy sports generated $1.5 million in retail sales, resulting in over $360,000 in business volume (BV), which paid commissions through the i2G plan without recruiting.

Reynolds explained the SIP plan, which outlined the rules that allowed distributors to “activate” and advance through the i2G plan without needing to recruit others, through product sales or usage. He emphasized that the “whole purpose” of the plan was to generate commissions from casino transactions. There could be no conclusion that distributor rewards were unrelated to product sales, as required by the Koskot test to determine a pyramid scheme. The fact that the i2G plan paid 25% from the product transactions (25% from every bet placed) demonstrated that I2G could not, by law, be a pyramid scheme, a securities offering, and had an anti-saturation plan in place.

The panel’s opinion overlooked Hosseinipour’s argument in favor of the anti-saturation plan, despite its grounding in the government’s evidence. Instead, the panel only focused on the “numerical cap” on emperors. However, Hosseinipour’s primary argument centered around the commissions generated from product usage without the need for recruitment.

The panel relied primarily on Dr. Keep’s opinions that i2G operated as a pyramid scheme. However, his analysis was tainted by inflated commissions and false data from another company. However, Keep and two other key government witnesses affirmed the anti-saturation plan, which included 25% of the BV or commissions from product transactions, paid in binary, matching, and leadership bonuses. The evidence unequivocally tied product sales or usage to distributor rewards.  Moreover, I2G was not a pyramid scheme and had an effective anti-saturation plan

The panel was influenced by the false evidence of $34 million pyramid scheme with 97% losses, which is disproved by the data.  As a result, the panel could not assess any of the arguments presented fairly.

The examples relate to three critical arguments presented by Hosseinipour. However, none of her arguments could be fairly assessed using a standard that favors the government based on false evidence to reach each conclusion.

Light most favorable to the government versus the weight of the evidence in the legal context  

In a legal context, particularly when reviewing a jury verdict or considering a motion for acquittal, courts often apply the standard of viewing the evidence in the “light most favorable to the government.” According to the LSD, the law means that the court considers all evidence and inferences that support the prosecution’s case and disregards any evidence that contradicts it. The purpose is to determine whether any rational trier of fact could have found the defendant guilty beyond a reasonable doubt. 

However, this standard does not imply a complete disregard for the weight of the evidence. The “weight of the evidence” refers to the credibility, persuasiveness, and reliability of the evidence presented. In contrast to the “light most favorable” standard, which focuses on the sufficiency of the evidence to support a conviction, assessing the “weight of the evidence” allows the court to evaluate the strength and believability of the evidence in supporting one side over the other. 

For instance, when considering a motion for a new trial based on the argument that the verdict is against the weight of the evidence, a court may re-evaluate the credibility of witnesses and the overall balance of the evidence, even though the evidence might have been sufficient to support the conviction. 

In essence, while the “light most favorable to the government” standard requires a narrow review of whether a rational jury could have found guilt, evaluating the “weight of the evidence” involves a broader assessment of whether a jury was justified in reaching that conclusion based on the overall strength and credibility of the evidence. 

Shift to the weight of the evidence and prejudice to the defendant in the case of false evidence.

“Viewing the evidence in the light most favorable to the government” is a legal standard primarily used in reviewing motions for judgment of acquittal or challenges to the sufficiency of evidence after a conviction. In this review, the court assumes the prosecution’s evidence is credible and sufficient to support a conviction, resolving conflicting inferences in the government’s favor. This standard protects against judicial overreach into the jury’s role as fact-finder. 

However, false evidence introduces a critical caveat to this standard. The principle is that convictions based on known or unknowingly false testimony violate due process. While the “light most favorable” standard usually prioritizes the government’s case, the existence of false evidence shifts the focus to: 

• The weight of the evidence: This refers to the persuasiveness and believability of the evidence, not just its quantity. When false evidence is involved, its weight becomes significantly diminished, potentially impacting the overall strength of the prosecution’s case.
• Prejudice to the defendant: The courts must assess whether the false evidence influenced the trial’s outcome and harmed the defendant’s right to a fair trial. Factors like the state of the evidence, the effect of other instructions, and counsel’s arguments are considered when determining prejudice. 

In essence, the presence of false evidence requires a deeper examination of its validity and its impact on the fairness of the trial rather than simply accepting it in the light most favorable to the government. The due process clause protects against convictions based on testimony that prosecutors knew or should have known was false, and courts should clarify requirements for relief in such cases, including considering imputed prosecution knowledge and relaxing the requirement that false testimony reach the level of perjury. 

In cases where false evidence is a factor, defendants may argue that they did not know the evidence was false, did not act with criminal intent, or were unaware of pending legal proceedings to defend against charges related to false evidence.