PatrickPretty.com

Day: April 14, 2009

  • Affinity Fraud Cases In New York And California Fleece Investors Of $35 Million, SEC Says; Ordained Minister Charged In New York Scheme Targeting Elderly Parishioners

    Eight people have been charged in unrelated affinity-fraud cases in New York and California that bilked investors out of $35 million, the SEC said.

    In the New York case, seven members of a Queens church were charged, including a minister. The scheme targeted “mostly elderly” members of the church, fleecing them of $12 million, the SEC said.

    The California case resulted in charges against a woman who coupled affinity fraud with a Ponzi scheme to fleece investors of $23 million, the SEC said. The scheme targeted members of the Hispanic-American community.

    Charged in New York were Isaac I. Ovid, 28, an ordained minister in the church and a citizen and resident of Trinidad & Tobago; Aaron Riddle, 34, of Narvon, Pa.; Bob Riddle, 59, the father of Aaron Riddle and a resident of New Holland, Pa.; J. Jonathan Coleman, 40, of Astoria, N.Y.; Stephen Cina, 32, of Westbury, N.Y.; Cory A. Martin, 31,of Westbury, N.Y.; and Timothy Smith, 35, of Ephrata, Pa.

    Also charged in New York were Jadis Capital Inc., Jadis Investments LLC and Logos Multi-Strategy Hedge Fund I LP.

    Charged in California were Clelia A. Flores and Maximum Return Investments Inc. (MRI) of El Segundo.

    “As we allege in our complaint, Flores violated the trust of her own community by falsely promising high returns and no risk,” said Rosalind R. Tyson, director of the SEC’s Los Angeles Regional Office. “When she couldn’t deliver, she resorted to paying off early investors with money from unsuspecting newcomers.”

    Flores misappropriated investors’ funds to pay her personal expenses “and finance a lavish party for MRI to celebrate the company’s alleged financial success,” the SEC said. About 150 investors from seven states were affected by the scheme, which began in late 2006.

    Meanwhile, the defendants in the New York case bought expensive watches and a luxury Bentley automobile with investor funds, the SEC said.

    Robert Khuzami, director of the SEC’s Division of Enforcement, didn’t mince words when describing the New York scheme.

    “Affinity fraud is a particularly sinister scam that exploits investors in close-knit communities,” he said. “The SEC has recently brought enforcement actions against fraudsters who have deceived members of the deaf community, religious groups, and various minority groups. Today’s action is especially egregious, as church leaders targeted their own parishioners and betrayed the sincere trust placed in them.”

  • Payment Processors Used By Surf Firms Offline

    UPDATED 8:56 P.M. EDT (U.S.A.) Two popular payment processors used by autosurfing firms are offline simultaneously.

    The main pages for SolidTrustPay of Canada and StrictPay of Panama both will load. But registration buttons for both of the processors are generating server errors and will not load. The problem appears to be affecting secure (https) connections.

    Some members said they could not access their accounts. Others described the problem, which is being discussed on autosurfing forums, as intermittent.

    Neither company has explained the problem on their main pages. The secure pages for both SolidTrustPay and StrictPay are generating a “Connection Interrupted” error message in Firefox, and a “cannot display the webpage” error in Internet Explorer.

    UPDATE 3:13 P.M. EDT (U.S.A.) One of our readers reports that sign-up pages for the processors worked from his location. We again tried to get the pages to load in Firefox and IE, and they threw server errors. Why this is happening is unclear.

    UPDATE 8:56 P.M. EDT (U.S.A) SolidTrustPay and StrictPay are accessible now.

  • Arons Blames Friedman For Mediation Failure

    Florida resident Jack Arons blamed Dallas attorney Larry Friedman for a breakdown in lawsuit-settlement negotiations, saying Friedman did not take the negotiations seriously.

    In court filings in which Friedman is seeking a new temporary restraining order against Arons that would prohibit Arons from communicating with reporters and other third parties about the case, Friedman said talks collapsed because Arons didn’t negotiate in good faith.

    A previous restraining order against Arons expired.

    Friedman’s is not telling the truth, Arons said.

    “It is more like Larry was unwilling to mediate,” Arons said in a Blog Comment here. “I had set aside 4 hours on the day of mediation to mediate and Larry who was in his car on the way to another meeting spent all of 15 minutes on the mediation.

    “He also continued to load me down with paperwork during the so called mediation. So as is the case Larry is lying again and is making it sound like I am at fault and not him,” Arons said.

    Friedman sued Arons last month in Dallas for slander and libel, in a case that sprouted from Friedman’s representation of the ASD Members Business Association (ASDMBA) Trust.

    The Trust was formed by member contributions to protect their legal interests in the AdSurfDaily Ponzi scheme case.  Some ASDMBA members have complained about the management of the Trust by Bob Guenther, its de facto head.

    Guenther, they say, has not provided transparent accounting that detailed how the Trust spent money from contributors. Friedman is the Trust’s attorney. Guenther, a convicted felon, introduced Friedman to potential contributors last year.

    Arons, who says Friedman has buried him in paperwork, including a 135-page filing yesterday, lives in a manufactured home in Florida, collects Social Security and does not have an attorney.

    Arons now is trying to amass $1,500 through a loan or donations to sue Friedman in federal court.

    Yesterday’s filing by Friedman includes an exhibit of Internet postings on this Blog and the ASD-Biz forum. It also includes content from the websites of the Dallas Morning News and WCTV-TV, a Florida television station.

    Separately, Friedman is using a subpoena to ning.com, the host of the ASD-Biz forum, in a bid to obtain information on posters at the forum. Some forum members appear to have changed their forum identities to create twists on their old names or twists on how they’ve been described by Guenther — in protest.

    Guenther is scheduled to make a court appearance in Arizona today on felony charges of repeatedly violating a court order that prohibited him from threatening an Arizona company.