NEW YORK (AP) — For Doug Stephens, the free event seemed like a good way to learn how to flip homes. An online ad for the December gathering sported pictures of Tarek and Christina El Moussa, the stars of HGTV’s “Flip or Flop” who buy rundown homes, renovate them and try to sell them for a profit. Stephens watched “Flip or Flop” regularly, along with 2.8 million other Americans, so he went.
The El Moussas, however, did not show up. In a prerecorded video, the couple told attendees that they were busy working and filming their show. Undeterred, Stephens paid $1,997 for three days of classes and $1,000 for real estate software. But the classes turned into a sales pitch to buy additional courses that cost thousands more, said Stephens, a pastor and teacher from Havana, Florida.
“They weren’t really teaching at all,” he said.
The El Moussas, like many reality TV stars before them, are capitalizing on their fame by offering pricy classes. At free events in hotel ballrooms, instructors tell attendees that if they pay to enroll in three-day courses, they’ll learn how the couple flips homes and also gain access to investors who will give them cash to buy properties, even if they have low credit scores or a weak job history. They’ll earn back their money quickly, the instructors say, and will get refunds if they don’t flip a home within a certain amount of time.
But about a dozen people interviewed by The Associated Press said those promises did not pan out. Although class leaders offered some instruction, a lot of time was spent pushing them to buy more classes, they said; some complained that getting refunds for the sessions was difficult.
Stephens said his instructor avoided answering questions, told attendees not to speak to each other and spent a lot of time hyping the program. The homework on the first day was for attendees to call their credit card companies and increase their credit limits, he said. On the last day, Stephens said, the instructor pushed them to buy training sessions, some of which cost around $26,000.
The classes featuring the El Moussas are run by Zurixx LLC, an education company based in Utah. Zurixx has partnered with other reality TV stars to create education programs under different names, some of which also have been the subject of complaints from students. A section of Zurixx’s website that listed its programs and the reality stars it works with disappeared as the AP reported this story. The company said it is continually updating its website.
Last year, Zurixx brought in $130.1 million in total revenue, the company told Inc. magazine. The El Moussas’ program, Success Path Education, is Zurixx’s most popular and the couple receives a percentage of the Success Path classes sold, the company said.
The El Moussas are a big draw, with “Flip or Flop” ranked as HGTV’s second-most watched show. And home flipping is hot off TV, too: The number of flips, considered a property sold twice within 12 months, rose this year to the highest point in six years, according to RealtyTrac.com.
Roger Behle, the El Moussas’ attorney, said the couple did not have time to be interviewed for this story.
The U.S. Federal Trade Commission, which aims to protect consumers against unfair or deceptive business practices, has received 50 complaints about classes connected to Zurixx since 2013, according to documents reviewed by the AP. And in May, the Better Business Bureau office of St. Louis warned people about Success Path events in the city, citing the more than 150 complaints it received about classes related to the company.
Zurixx said the complaints represent a tiny percentage of the more than 370,000 people who have attended its events and the 75,000 who have paid for its products. The company said that nearly all its students have filled out positive evaluations about the classes and the company provided copies of more than 2,300 of those evaluations. It also said that it does not mislead people or push attendees to buy additional classes.
Zurixx also provided contact information for 13 people, including Billy Batson of North Port, Florida, who said he has flipped 17 properties since he paid $25,000 for a mentor and one of Zurixx’s classes two years ago. Batson said he probably could have been successful without the training, but that the process would have taken longer. Batson said Zurixx paid for a trip to Las Vegas for him and a girlfriend so he could talk to students.
“It’s been a really great life-changing experience,” he said.
Patricia Briggs paid $1,798 earlier this year for a three-day Success Path class, hoping it could change her life, too.
The day after she finished the classes, Briggs found three properties to try to flip near her home in Roseburg, Oregon. She said she called Success Path several times to help her connect with the promised investors, but that no one ever picked up the phone. (The company said it had no record of the calls.) A few weeks later, Briggs said she received calls from Success Path representatives who told her that they could put together a team from the El Moussas to help her, but only if she paid another $8,000. She said no and asked for a refund of her $1,798. She was offered half and she took it, she said, but still wants the balance back.
When she sees the El Moussas on TV now, Briggs said, “I want to go through my screen and shake the both of them.”
Carol Lepine, who went to a Bonita Springs, Florida, event last year, said she was shocked when she learned the El Moussas would not appear and left without buying any classes.
“It’s a definite bait and switch,” she said.
Zurixx said its mailed invites do not state that the stars will be there, and that the El Moussas can’t go to every class but show up when they can.
This summer, Zurixx held dozens of free Success Path events across the U.S., Canada and Puerto Rico as HGTV aired the fifth season of “Flip or Flop” and a spinoff, “Flip or Flop: Selling Summer.” More free seminars are scheduled in November, including in New York, Minneapolis and San Jose, California. HGTV spokeswoman Audrey Adlam said in a statement that the network and its parent company, Scripps Networks Interactive Inc., are not associated with Success Path and other classes. She declined to answer specific questions, including how many complaints the network has received about the classes.
Other reality TV stars have had trouble with their real estate classes, most notably Republican presidential nominee Donald Trump, who starred on NBC’s “The Apprentice.” Trump was sued over his Trump University both by students and New York’s attorney general, who contended the real estate classes were merely a vehicle to sell more training that cost as much as $35,000. Eric Schneiderman, the attorney general, called the university a “straight up fraud.” Trump has said he will prevail in the lawsuits.
Another former reality star, Armando Montelongo of A&E’s “Flip This House,” was sued in February by more than 160 people who said his company’s $1,500 home-flipping classes were “ruses” to sell more training that cost as much as $54,000. The case, which was filed in a California court, was voluntarily dismissed by the students in September after the jurisdiction was contested. It will be refiled in Texas where Montelongo lives, according to court documents. In a statement, Armando Montelongo Companies said the lawsuit was “frivolous.”
Anyone who purchases classes from Success Path must sign a receipt with an arbitration clause on the back noting that any dispute with Zurixx must be lodged in Salt Lake City and “be conducted on a confidential basis.” Complainants seeking less than $10,000 can make a claim in small claims court, according to the document. Those interviewed by the AP said they did not realize they were ceding their rights to sue by signing the receipt.
The company said it favors arbitration because it is a cheaper and a faster way for customers to resolve disputes.
Two of Zurixx’s owners have run into trouble with Utah regulators in the past. Premier Mentoring Inc., which was owned by Zurixx co-owners Jeff Spangler and Cris Cannon, was accused in 2008, 2009 and 2014 of deceptively selling training programs over the phone, according to documents from the Utah Division of Consumer Protection. The first two cases were dismissed after the company reached an agreement with customers; in the 2014 case, the company settled by paying a fine. Spangler and Cannon told the regulator that Premiere Mentoring stopped telemarketing operations in 2013.
Customers who took some of Zurixx’s other classes had complaints that echoed criticisms of the El Moussas’ offerings.
Gloria Pettis, a budget analyst from San Diego, paid $1,500 for a three-day small business class that featured Daymond John, a star of ABC’s “Shark Tank.” She said she paid for Daymond John’s Launch Academy because speakers at a free event in January said they could help her create a prototype for a wearable tracking device for children that she wanted to make and sell.
During the entire three days, Pettis said no instructor ever asked her about the product she wanted to make. But employees suddenly became interested, she said, after she told them she opened a new credit card with a $30,000 limit, an assignment the class was given on the first day. Workers pulled her out of class six times, she said, pushing her to buy more training in Las Vegas for $27,000. She did not.
Zurixx said it asks students to increase their credit limits and open new cards to have access to funds for unexpected business costs, but Pettis said it was made clear to her that the new card was to be used to pay for the Las Vegas classes. Zach Rosenfield, a spokesman for John, said the “Shark Tank” star was unavailable for an interview. An ABC representative did not respond to requests for comment.
Susan Martin went to a free Zurixx event featuring reality TV stars Andy and Candis Meredith of “Old Home Love,” a show that aired on HGTV and its sister channel the DIY Network. She ditched day two of her $1,997 three-day class, she said, because she was told to raise her credit limit and buy $23,000 in additional education. Brian Samuels, a manager for the Merediths, said the couple did not have time to be interviewed because of their shooting schedule.
Martin, a retired bookkeeper from Chico, California, received a refund after she wrote a negative review on the Better Business Bureau website.
Two months later, she received an invite to another free event that featured a picture of the El Moussas on the front, under the sentence: “Do you have the courage to retire rich?”
“These people are so stupid that they actually invited me again after I complained,” Martin said. “Or they thought I was dumb enough to fall for it again.”
Contact Joseph Pisani at http://twitter.com/josephpisani . His work can be found at http://bigstory.ap.org/author/joseph-pisani .
HARTFORD, Conn. (AP) — A now-retired Connecticut police sergeant says in a newly released incident report that he kicked a handcuffed man in the head because the man refused to stop spitting blood at him.
Hartford police on Tuesday released documents in an investigation into whether officers used excessive force during the June arrests of Ricardo Perez and Emilio Diaz.
A video released this month appears to show Sgt. Sean Spell stomping on the head of a handcuffed man on the ground.
Spell’s incident report says Diaz appeared to be high on PCP and was spitting at him. It says Spell used force after Diaz refused to stop and comply with orders.
Diaz’s lawyer tells The Hartford Courant his client “denies spitting blood at anybody.” Spell’s attorney didn’t immediately respond to requests for comment.
BEIJING (AP) — In a story Oct. 25 about a Chinese electronics maker’s recall of web-connected cameras sold in the U.S., The Associated Press erroneously reported that the company would recall 4.3 million units. The company has not specified how many units would be involved in the recall but a manager said it was likely to be in the thousands.
A corrected version of the story is below:
Chinese firm says it did all it could ahead of cyberattack
A manager with a Chinese electronics maker that has recalled products sold in the U.S. says the company did all it could to prevent a massive cyberattack that briefly blocked access to websites including Twitter and Netflix
By GERRY SHIH
BEIJING (AP) — A Chinese electronics maker that has recalled products sold in the U.S. said Tuesday it did all it could to prevent a massive cyberattack that briefly blocked access to websites including Twitter and Netflix.
Hangzhou Xiongmai Technology has said some of its web-connected cameras and digital recorders became compromised because customers failed to change their default passwords.
Liu Yuexin, Xiongmai’s marketing director, told The Associated Press that Xiongmai and other companies across the home surveillance equipment industry were made aware of the vulnerability in April 2015. Liu said Xiongmai moved quickly to plug the gaps and should not be singled out for criticism.
“We don’t know why there is a spear squarely pointed at our chest,” Liu said.
The hack has heightened long-standing fears among security experts that the rising number of interconnected home gadgets, appliances and even automobiles represent a cybersecurity nightmare. The convenience of being able to control home electronics via the web also leaves them more vulnerable to malicious intruders, experts say.
Unidentified hackers seized control of gadgets including Xiongmai’s on Friday and directed them to launch an attack that temporarily disrupted access to a host of sites, ranging from Twitter and Netflix to Amazon and Spotify, according to U.S. web security researchers.
The “distributed denial-of-service” attack targeted servers run by Dyn Inc., an internet company located in Manchester, New Hampshire. These types of attacks work by overwhelming targeted computers with junk data so that legitimate traffic can’t get through.
“The issue with the consumer-connected device is that there is nearly no firewall between devices and the public internet,” said Tracy Tsai, an analyst at Gartner, adding that many consumers leave the default setting on devices for ease of use without knowing the dangers.
Researchers at the New York-based cybersecurity firm Flashpoint said most of the junk traffic heaped on Dyn came from internet-connected cameras and video-recording devices that had components made by Xiongmai. Those components had little security protection, so devices they went into became easy to exploit.
In an acknowledgement of its products’ role in the hack, Xiongmai said in a statement Monday that it would recall products sold in the U.S. before April 2015 to demonstrate “social responsibility.” It said products sold after that date had been patched and no longer constitute a danger.
The company, which also makes dashboard cameras and computer chips, said it would recall several models of web-connected cameras and has offered customers a software security fix. The recall will apply only to devices sold under Xiongmai’s name. As an original equipment manufacturer, close to 95 percent of the company’s products are sold by other firms that repackage its devices under their own brand names, said Liu, the marketing director.
Liu refused to specify how many units the company expected to recall from the U.S. other than that it could be in the thousands.
Xiongmai and Dahua, a video surveillance manufacturer also based in the eastern Chinese tech hub of Hangzhou, first came under scrutiny several weeks ago after Flashpoint assessed that hackers had controlled their devices to attack the website of cybersecurity writer Brian Krebs, among other targets. Dahua has responded by saying it is dedicated to testing vulnerabilities, and has offered discounts for replacement equipment.
Xiongmai has adopted a less conciliatory stance. It downplayed its culpability this week, saying that as even the world’s largest technology companies experience security lapses, “we are not afraid to also experience it once.”
Xiongmai also slammed as “completely untrue, malicious and defamatory” reports about its products and appended to its statement a letter from its lawyers threatening litigation.
Mark James, an expert with Slovakia-based security company ESET, said that he doubted Xiongmai could be held liable for an attack such as Friday’s, but that the company’s officials “obviously recognize a concern here.”
“Hopefully other manufacturers will follow suit and take a look at what they can do to increase security of their own products,” he said.
Associated Press writer Raphael Satter in London and researcher Fu Ting in Shanghai contributed to this report.
TOKYO (AP) — “Pokemon Go” is giving only a modest boost to Japanese video game maker Nintendo, which has slashed its operating profit and sales forecasts for this fiscal year citing lagging demand for game consoles like the Wii U.
The Kyoto-based maker of Super Mario games said Wednesday that its net profit in April-September was 38.3 billion yen ($368 million), up 234 percent from the same period the year before. That was mainly due to a 62.7 billion yen ($601.7 million) gain from its sale of the Seattle Mariners Major League Baseball team.
Nintendo said it expects its net profit for the year that ends March 31, 2017, to overshoot its earlier estimate thanks to that windfall.
Nintendo’s earnings have suffered from disappointing sales of the Wii U and the 3DS handheld.
The company said a strengthening of the Japanese yen contributed to an operating loss of 5.9 billion yen ($57 million) in April-September, compared with an operating profit of about 9 billion yen a year earlier. It cut its full-year operating profit forecast to 30 billion yen ($288 million) from 45 billion yen.
Nintendo earns over 70 percent of its sales overseas. It booked a foreign exchange loss of 39.9 billion yen ($383 million) in April-September, as net sales sank 33 percent to 136.8 billion yen ($1.3 billion). It cut its sales forecast for the full year by 6 percent to 470 billion yen, citing a paucity of new game software titles.
After years of scoffing at the threat from smartphones, Nintendo did an about face last year, launching Pokemon Go during the summer.
The augmented reality game, its first success since making that decision, underlines Nintendo’s potential. The game, which has players looking for Pokemon creatures in their real-life wanderings, is a good match for the classic Pokemon story.
But Nintendo has warned the “Pokemon Go” perk will be limited. The Pokemon Co., a Nintendo affiliate, gets licensing fees and other compensation for the mobile game distributed by Niantic Inc., but that is having a limited impact on its income.
The “Pokemon Go” game became available after the first quarter ended, and playing it basically is all free. The company may get a boost from sales of other Nintendo products.
Last week, Nintendo it plans to release a new gaming system, Nintendo Switch, in March. The portable handheld device also can be used with a dock to connect to a TV.
Nintendo says an exact launch date, price and more specifics will be released later.
WASHINGTON (AP) — Poring through thousands of private, stolen emails from Hillary Clinton’s confidants has become a daily ritual in Washington.
The hacked emails — some mundane, others laced with intrigue about election strategy, snarky barbs, whining about salaries or perceived slights — provide an inside, real-time view of the insecurities, sniping and self-promotion that churn beneath the surface of a heated presidential campaign.
Yet it’s also uncharted territory fraught with ethical dilemmas: Should a private individual’s stolen correspondence be read? How does someone respond publicly when they’re the subject of a private email? Have the emails been altered?
Nearly every morning since Oct. 7, WikiLeaks has tweeted out an alert that it was publishing on its website another couple thousand messages stolen from the email accounts of John Podesta, chairman of Clinton’s presidential campaign. As of Tuesday, it had published more than 31,000 of Podesta’s emails dating to 2008. WikiLeaks appears on track to continue releasing batches of Podesta’s emails right up until Election Day.
The Podesta emails follow a string of notable illicit caches released during the 2016 election campaign, including thousands of messages stolen from the Democratic National Committee and former Secretary of State Colin Powell. The FBI has opened a criminal investigation into the DNC thefts, but U.S. intelligence agencies are firmly pointing to the Russian government.
Donald Trump says he doubts the Russians are behind the cyberattacks. For weeks the Republican nominee has highlighted the contents of the hacked emails on Twitter and in his speeches, as his campaign issues multiple news releases a day.
Despite Trump’s bombast, no bombshell revelation has emerged to significantly alter the presidential race or prompt calls for the Democratic nominee to drop out — as happened with Trump following the leak of a decade-old video of him vulgarly bragging about groping women.
In a few instances, the messages have actually undercut Trump’s talking points. Rather than the well-oiled, octopus-tentacled cartel of international conspiracy painted by Trump, the Clinton Foundation in Podesta’s emails is riven by rumors, funding woes and internal feuds — among them a bitter rift between the candidate’s daughter, Chelsea Clinton, and a former aide of her father, former President Bill Clinton.
While the leaks do underscore the coziness between the Clintons and well-heeled donors, Trump’s reliance on the hacked emails has given even some in his own party pause, especially as he has continued to express admiration for Russian President Vladimir Putin.
“As our intelligence agencies have said, these leaks are an effort by a foreign government to interfere with our electoral process, and I will not indulge it,” Florida Sen. Marco Rubio, who backs Trump, said recently in an interview with ABC News. “Further, I want to warn my fellow Republicans who may want to capitalize politically on these leaks: Today it is the Democrats. Tomorrow it could be us.”
The releases from WikiLeaks put journalists in the uncomfortable position of receiving and reviewing stolen property for its potential news value. There has undisputedly been some real news to emerge, such as Clinton’s secret Wall Street speech transcripts.
Emails obtained through public records requests or other official means often contain redactions, but not the WikiLeaks emails. They contain personal financial details, medical information, phone numbers and even an account of purported suicide threats made by a key staffer at the Clinton family foundation.
Still, media ethicists say, news organizations have little choice but to wade through the daily email dumps looking for news.
“Journalists must ask themselves, ‘To whom do you owe your primary loyalty?’ The answer is your audience, the American public,” said Kelly McBride, a media ethicist at the Poynter Institute, a journalism education foundation in St. Petersburg, Florida. “Ignore the emails and you fail to serve the American public, and play into the hands of the manipulative, destructive narrative that the media is on Hillary’s side.”
The stolen emails do provide an unvarnished and sometimes profane glimpse of the inner workings of a campaign that has a reputation for being guarded.
In a 2015 exchange with Podesta, liberal operative Neera Tanden wrote of Harvard Law School Professor Lawrence Lessig, “I f(asterisk)(asterisk)king hate that guy,” calling him a “smug,” ”pompous,” loathsome man whom a reasonable person might wish “to kick the s(asterisk)(asterisk)t out of on Twitter.”
Lessig, an advocate of campaign finance reform who launched a modest protest campaign for president, wrote on his blog that he got off an airliner after a flight to visit his father to find his email inbox flooded with messages about the hacked exchange.
“I can’t for the life of me see the public good in a leak like this — at least one that reveals no crime or violation of any important public policy,” Lessig wrote. “We all deserve privacy. The burdens of public service are insane enough without the perpetual threat that every thought shared with a friend becomes Twitter fodder.”
Associated Press writer Stephen Braun contributed to this story.
Follow AP writer Michael Biesecker at Twitter.com/mbieseck
CLEVELAND (AP) — Blinking back tears, LeBron James extended his right ring finger, the one sparkling with 400 diamonds, and touched the championship banner.
As it rose from a golden, miniature Cleveland skyline toward the ceiling, Queen’s “We Are The Champions” filled Quicken Loans Arena and Cavs fans sang along with Freddie Mercury just as they did in June.
And, incredibly, this was just the warm-up act for a night this city won’t soon forget.
Welcome to the center of the sports galaxy — Cleveland, Ohio.
On the same night the Cavs celebrated their historic comeback in the NBA Finals, winning a title that not only ended a 52-year drought in Cleveland but energized an entire region, the Indians hosted Game 1 of the World Series against the Chicago Cubs next door at Progressive Field.
A perfect sports storm on the shores of Lake Erie.
And an extraordinary night ended just right — the Cavs won, and so did the Indians, who beat the Cubs 6-0.
This type of thing never happened in Cleveland, where sports heartbreak was passed down from generation to generation like family heirlooms. But those days are over. This is a new Cleveland — city of champions.
The Cavs flipped that tired sports script, storming back from a 3-1 deficit to shock the 73-win Golden State Warriors and give Cleveland its first title since 1964, when the Browns won the NFL title. Before receiving their rings on Tuesday night — about an hour before the Indians and Cubs got started — Cleveland re-lived those special days earlier this summer when one its teams finally fought its way all the way to the top.
James was the final player to be introduced and handed his 6.5 karat ring by NBA Commissioner Adam Silver. After slipping it on his hand, James, the kid from Akron who delivered on his promise to win a title for Cleveland, looked at the jewelry with admiration and perhaps some astonishment.
Yes, it really happened. Here.
“This is for you guys,” James told the crowd, repeating a message he screamed after the Cavs won Game 7 at Oracle Arena on June 19. “This is all for you.”
James paused and then reminded Cleveland that it remains underdogs — even in victory.
“At this point, if you’re not from here, live here, play here … then it makes no sense for you to live at this point,” said the three-time champion. “Cleveland against the world.”
James made sure to wish luck to the Indians, who overcame adversity all season and won their first AL pennant since 1997. They’re trying to end a 68-year Series title drought against the Cubs, those lovable losers 108 years removed from their last championship.
Once the pomp and pageantry ended, James posted a triple-double as the Cavs opened the season with a 117-88 win over the New York Knicks. The Cubs-Indians game was shown on smaller scoreboards during timeouts and James, now 3-0 in ring ceremony games, applauded from the bench when he saw Robert Perez’s homer give Cleveland a 3-0 lead in the fourth inning.
Afterward, James said the ceremony touched him.
“Very emotional, man,” he said, “and our fans deserve everything that they got tonight and everything that’s going to come in the future. They’ve been supportive of all the sports here and especially us, so it’s great to have a moment like that.”
Before they took the floor for the ceremony, the Cavs, wearing new white-and-gold warmups with 2016 NBA Champions written on the back, looked like little kids getting ready to storm the Christmas tree and tear open presents. Kyrie Irving did a little dance in the hallway outside Cleveland’s locker room and shared a big hug with Kevin Love before James joined them and the team headed into the darkened arena where 20,000-plus fans roared.
Following a video that showed highlights from the epic Game 7 — James’ huge block, Irving’s 3-pointer — Silver introduced Cavs owner Dan Gilbert, who has spared no expense in building a super team. Cleveland’s starting five this season will make $100 million in salary.
Gilbert’s gotten greedy, and Cleveland fans don’t mind one bit. After all, most of them have waited a lifetime to see one title.
Why not another.
“When this is all over and that banner goes up there, there is really only one thing left to do — repeat,” Gilbert said. “And, go Tribe.”
There was still an opener to play, but that hardly mattered.
In the hours leading up to the ceremony and Game 1, fans of the Indians, Cavs — and a sizeable contingent of Cubs backers — posed for photos around the two buildings. They were savoring a day many never dreamed possible.
Indians outfielder Coco Crisp stopped and signed autographs on his stroll to work. For Crisp, in his second stint with Cleveland after the Indians traded for him in August, the chance to play in the World Series for the team he started with is beyond special.
“It’s a dream come true,” said Crisp, who also played for the Indians from 2002-05. “To be here now in this situation is unbelievable. And for Cleveland, I mean, what a day. These fans have done a great job of keeping the faith.”
It was rewarded by the Cavaliers, whose championship transcended all three teams and connected Clevelanders like nothing else.
Coach Tyronn Lue, who took over the Cavs midway through last season, shared the story of what it meant to a pair of fans he met after Cleveland won the title. The father and son approached Lue as he had dinner in Las Vegas.
Lue said the man told him, “You don’t understand how much this means to the city of Cleveland. My dad is not alive but he supported all three sports every year. It’s so sad he’s not here to see this. I want to thank you from the bottom of my heart.”
“Then he broke down and started crying,” Lue said. “That was one of the best moments I experienced this summer.”