Crain's New York
The rise and fall of the Spongetech scam

By AARON ELSTEIN
Aug 05, 2012 

The New York Mets got stiffed out of nearly $3 million by Spongetech. [...]

The Mets were the first team to carry Spongetech ads, and the company signed a three-year advertising deal shortly before the team moved into Citi Field in 2009. Spongetech agreed to pay a bit more than $1 million a year for a large sign along the right field wall and ads elsewhere in the ballpark, according to state court documents. The company also rented a luxury suite behind third base for five seasons, starting at $250,000 per year. Because Spongetech was selling so much stock to gullible investors during the summer of 2009, it could afford to pay its bills to the Mets, at least at first.

The ads with the Mets caught the attention of MSG officials, who were impressed that the little-known company had secured a licensing agreement for SpongeBob with the cartoon character's owner, the entertainment giant Viacom. For its part, Viacom's Nickelodeon division terminated its licensing agreement after Mr. Metter and Moskowitz were arrested in 2010 and Nickelodeon was never paid past-due royalties, according to a Spongetech bankruptcy trustee's report. Viacom declined to comment.

At the time MSG was courting Spongetech, a credit check showed it was paying the Mets, according to a person close to the matter, and its product could be found in stores. Yet had MSG executives looked a little deeper they might have found red flags—such as seven letters from the Securities and Exchange Commission over a 13-month stretch, starting in March 2005, demanding that Spongetech provide more information in its financial statements.

It isn't a pyramid scheme, it's a triangle opportunity.

The rest are to be turned into "concession scams" featuring vendors such as We Buy Your Gold...

The Mets? Pyramid Scheme? They have a saying down south, "fool me once, shame on you...fool me twice...um, um -- can't get fooled again!"

My childhood best friend was/is caught up in a pyramid scheme, and he really laid on the pressure to get me into it. I told him I wasn't interested, but that only seemed to encourage him. Then I tried ignoring his inquiries, but he still emailed/facebooked me a couple times a week, asking if I checked out the material yet. I finally told him there was no way in hell that I would ever join, and now we don't talk anymore.

Pyramid schemes are evil in more ways than one.

My childhood best friend was/is caught up in a pyramid scheme, and he really laid on the pressure to get me into it. I told him I wasn't interested, but that only seemed to encourage him. Then I tried ignoring his inquiries, but he still emailed/facebooked me a couple times a week, asking if I checked out the material yet. I finally told him there was no way in hell that I would ever join, and now we don't talk anymore.

My childhood best friend was/is caught up in a pyramid scheme.

Mets executives are projecting that this summer's attendance figures will be low enough that only a third to a half of the concession stands will be needed. The rest are to be turned into "concession scams" featuring vendors such as We Buy Your Gold, Education Connection, Natural Cures THEY Don't Want You To Know About, Russ Dalbey's Cash Flow Note Finding, and Armando Montelongo's real estate seminars as well as hordes of desperate local distributors for Amway, Avon, Mary Kay, Herbalife, Pampered Chef, Silpada Designs, Longaberger baskets, etc.

And sponsored content between innings brought to you by the Church of Scientology.

Absolutely no risk-unless your asteroid obliterates Cincinnati.