Nebraska beauty queen accused of bilking more than $3 million in bogus ‘passive income’ scheme

Nebraska beauty queen accused of bilking more than $3 million in bogus ‘passive income’ scheme

The sitting Mrs Nebraska 2024 is accused of helping to fleece unwitting consumers out of more than $3m in a bogus get-rich-quick scheme.

Liz Friesen is on the wrong end of a state lawsuit filed by Nebraska Attorney General Mike Hilgers, who says in court filings that the 34-year-old defrauded other Nebraskans by “flaunting a high-end and wealthy persona online to mislead consumers into believing [she] would give consumers access to similar levels of wealth and success.”

Friesen, whose Facebook profile quotes the Bible and describes her as a “mompreneur,” pushed a so-called passive-income strategy that made her rich, but no one else, according to the suit.

She and her co-conspirators then spent their victims’ investments on “luxury vacations in exotic locales, Lamborghinis, Cadillac Escalades, and other high-end vehicles, multimillion-dollar mansions, jewelry, designer clothing, private airplanes, a lakehouse, and countless other extravagances,” according to the lawsuit.

Friesen lured in dozens of targets by posting photos on social media of herself “enjoying the fruits of [her] misdeeds and deceptions” via a shady operation called WiFi Money, the lawsuit states. It alleges that she and nearly a dozen co-conspirators never mentioned that their enviable lifestyles had in fact been underwritten by a raft of unwitting investors who thought they, too, could share in comparable riches.

“These highly deceptive ‘passive income’ schemes will not be tolerated in Nebraska under my watch,” Hilgers said in a statement. “Our Office will fight hard to get Nebraskans’ hard-earned money back and hold bad actors to account.”

The alleged scam began during the Covid-19 pandemic, and capitalized on the “sudden explosion in online shopping” that occurred at the time, according to the suit. Each “investor” paid between $15,000 and $100,000 in total to set up e-commerce stores on Amazon and Walmart.com, after being led to believe they would earn as much as $100,000 a month, with minimal effort, via “dropshipping,” according to the suit.

Liz Friesen (pictured) is accused of promising investors vast riches, based on alleged lies (Nebraska Attorney General Mike Hilgers)

Dropshipping involves opening an online storefront and listing items for sale by third-party retailers, offering them to customers at a markup, and having them shipped directly by the original seller, the lawsuit explains.

“Dropshipping has many flaws, not the least of which is the fact that customers can simply pay the lower price from the third-party retailer instead of purchasing it from the dropshipper,” the lawsuit states. “The industry is also highly competitive, which makes profit margins negligible or nonexistent. When returns, shipping, and marketing costs are factored in, turning a profit through dropshipping becomes extremely difficult.”

In reality, Friesen’s promises fell completely flat, earning investors either no profit at all, or a substantial loss, according to the suit.

In one example laid out in the suit, after Friesen and her partners had brought their victims nothing more than 2.5 years of “abject failures,” she continued to push her “#paidtolive” claims.

“[W]ork alongside me and my WiFi Money team and make $5,000 extra a month, $10,000 extra a month, $100,000 extra a month,” Friesen posted on Instagram, the lawsuit states. “Whatever it is that your heart desires, let’s make it happen.”

However, as one angry investor told authorities, things immediately went south, according to the suit.

It states that the store was insufficiently stocked, fraudulent charges began to appear, and the venture threw off zero profit. Friesen and her partners made various excuses for their “ineptitude,” but never “meaningfully responded” to the investor’s demands for a refund, the suit claims.

Now, through his lawsuit, Hilgers says he is seeking to stop Friesen from promoting any further passive income schemes, to force her to refund her victims, and to “penalize those who enriched themselves off deceiving Nebraska consumers and preying on consumers during vulnerable periods of financial uncertainty.”

The lawsuit was filed in Lancaster County, Nebraska district court and alleges violations of, among other things, the Consumer Protection Act and Uniform Deceptive Trade Practices Act.

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