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6 Shady Startup Business Schemes That Are Deals With The Devil

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Shady business deals and practices.

As in life, your lying, deceiving, cheating, shady business schemes will eventually catch up to you if not sooner then later. Running a startup business based on deceit and misinformation is like making a deal with the devil, you'll soon see it wasn't worth it to begin with.

 

What am I talking about? There's a lot of unsavory ways to get ahead in new business, but I'm spotlighting what I call the rotten six. If you fall into one or more of these shotty schemes, you should step back and assess the pros and cons of your actions. Sooner or later there's bound to be repercussions in a court of law or the dreaded IRS. 

 

Starting shell companies to evade taxes - Wanting to avoid taxes is one thing, it's perfectly legal to setup shop in a tax haven state to increase business profits. But greedy business types love shell companies especially in Nevada. It's become the go-to state for people looking to form shell companies, which are shady firms with few assets often used for tax evasion. Sleep with one eye open since Uncle Sam's always scanning Sin City looking for you.


Running fraudulent pyramid schemes disguised as legitimate business - This one's popular and often disguised so well it's victims don't see the financial tsunami coming until it's too late. Clever unscrupulous corporate types start these schemes to ring up hefty profits at the cost of gullible and inexperienced investors. The penalty is very severe once you're caught running fraudulent pyramid schemes. Can you say Bernie Madoff? I don't think you want to.

Defaulting on business contracts - A deal is a deal. Starting a business venture with the intention to ripp off a client or business partner is just heartless. A contract is a binding agreement, and no one signs a conract with intent to get scammed. However, some business owners plan otherwise. The result is contract gets signed, business owner promises client a service , client pays, then business owner skip and run. The client often makes it easy for the scammer with a verbal agreement, but know that unless you get it in writing with a witness and photo as bonus insurance, the deal is bad from the get go. Business scammers beware, unless you're international or a state hopper, this will catch up to you and land you a nice cold jail cell.

Breaking a non-disclosure agreement - When you do legitimate business with a client or partner there's often a non-disclosure or non-compete clause in the contract. Shady individuals however will plan to disclose confidential info to third parties for a profit, or worst, steal a business idea for themselves. The ending result can be fierce drawn out court battles about who really owns the idea and should reap profits. Why bother breaking someone's trust or confidentiality, it'll come back to bite you with a serious dose of hate and contempt.

Running get rich quick illegal gambling websites - These seem to pop up all over the internet, especially in bad economies. To be frank, the profits are huge because online gambling's just as addictive as playing craps or poker in  Vegas Casinos. Of course the real beneficiary is the guy running the operation, but unrelenting customers stay addicted and keep losing money. The FBI contsantly prowl the web looking for these cyber schemes and aggressively shut down and prosecute anyone running them. In this case the devil wears a federal badge so beware.

Running spammy, scammy blackhat seo campaigns - Crooked startup business owners are everywhere, even in legitimate business marketing of Search Engine Optimization. The culprits are tech savvy greedy SEOs who promise business clients hefty website traffic and sales conversion rates once hired.  There's generally a team of sketchy individuals who practice what's called hardcore Blackhat SEO. Blackhat SEO is using questionable methods banned or not approved by major search engines to get quick and heavy volumes of internet traffic. Initial results are great but once the black hat guys collect and move on, you're stuck with a website waiting to get blacklisted and banned from the search results. It's tough to get back in good graces with Google and the big guys, so watch out and do your research before hiring shady SEOs.


Getting drawn to these questionable business practices is like Eve getting blind sighted by the forbidden fruit. There's a high price to pay in the end and you won't be happy once you have to pay up for making a deal with the devil.

 
 
Blog posted from New York, NY, USA View larger map
Co-Founder of Erookie and startup business expert. Author, mentor, speaker, and small business owner.

Comments

  • Guest
    Camrin Saturday, 01 October 2011

    As the old saying goes, "The Devil is in the details" and when you're the person dishing out the details to unsuspecting people in business they will get suckered. However you can only run a sham of a business for so long then eventually all the shady stuff you do will come right back to you in the most negative way possible.

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