DEVELOPING STORY: Firm That Provided AdSurfDaily Debit Card Indicted; Feds Say Virtual Money Inc. Helped Colombian Drug Operation Launder Money In Medellin
UPDATED 9:49 A.M. EDT (U.S.A.) A Dallas-based company and its president were charged in a sealed indictment in April 2008 with helping a Colombian cocaine operation launder money by providing debit cards that were used to convert drug proceeds to cash in Medellin.
The company — Virtual Money Inc. — once provided debit cards to AdSurfDaily Inc., a Florida company accused in August 2008 of money-laundering, wire fraud and operating an autosurf Ponzi scheme.
Prosecutors brought a forfeiture complaint for tens of millions of dollars in the ASD money-laundering case. A grand jury in the Virtual Money case has authorized forfeiture complaints totaling $7.12 million.
Prosecutors said that Virtual Money, known simply as VM, helped the Colombian drug operation offload at least $7.1 million in drug proceeds at automated teller machines in Medellin. Medellin once was home base of the infamous Medellin Cartel, operated by drug lord and terrorist Pablo Escobar. Escobar was killed by Colombia National Police in 1993.
Escobar was implicated in the assassination of Colombian presidential candidate Luis Carlos Galán and the bombing of Avianca Flight 203 over Colombia, which killed 110 people.
Autosurf promoters long have claimed that participation in illegal surf enterprises is harmless. The indictment against VM — and the allegations that it laundered money for a Colombian drug organization — demonstrates the dangers of participating in murky businesses in which participants have no way of knowing what is in the hearts and minds of other participants.
It was not immediately clear how long ASD used the VM debit card, which was heavily promoted in early 2007 when ASD said it was having cash-flow problems.
Two Colombian conspirators “directed their agents in the United States to provide proceeds of sales of controlled substances to agents of VIRTUAL MONEY, INC. to be sent to Colombia so the proceeds could be made available to the clients,” according to the indictment.
VM “stored value cards were used by the members of the conspiracy to make available at a Daviviendo Bank ATM in Medellin, Colombia the peso equivalent of US $2,430,810.24 in April 2006; US $2,437,023.53 in June 2006; and US $2,257,761.45 in August 2006,” prosecutors charged.
The VM indictment, which was brought in Connecticut after a two-year investigation by the Drug Enforcement Administration, was unsealed in September. It names 10 defendants, including VM President Robert Hodgins.
Debit cards with “stored value” have become an increasingly popular way for autosurfs to collect and distribute money.
In 2007, members of an ASD downline team hailed the VM debit card as one of the key advantages of ASD membership. The same downline team claimed that ASD provided “shelter” from the Federal Trade Commission and the Securities and Exchange Commission
ASD downline group pitches VM card in 2007.
The card “[c]an be used in over 210 countries and territories and growing!” a sales pitch by the downline group said. “Funds conversion to local currencies at local ATMs.”
VM’s website now directs either to a “Forbidden” error or a message that explains the company is not operational, depending on what URL visitors use.
“We have a dedicated team working around the clock to ensure that the advanced and trusted service that all Virtual Money Card Holders have been use to over the past years, will be back and available as soon as possible as we are currently updating our facilities and servers,” VM said in the message.
Australia has banned the sale of the VM card.
This is not all that surprising when you consider how many convicted felons were running ASD, including Andy.
From the ASD Terms of Service comes this:
“All members are responsible for the following:
• Read our Frequently Asked Questions (FAQs)
• You must sign up with your own, unique email address.
• You must sign up with your own Virtual Money Debit Card, Alert-Pay or Ceptrust account…”
Since this company is in Dallas, I wonder if Guenther knows of them, wouldn’t be surprised if he had an account with them.
Some interesting stuff here:
http://virtualmoneyincscam.blogspot.com/
I wonder when the world’s governments are going to address the issues of the online payment processors and put some serious legislation in place to control their actions.
they are, as has been said bfore on this blog, the enablers of criminal schemes and other illegal businesses, including most of the ponzi schemes that are doing the rounds of the internet. Without them, half the online frauds would die overnight and a lot of unnecessary suffering would be avoided.
How much longer do we have to put up with the vacuum of legal controls over these opportunists?
Wow thanks for that link Tony H (virtualmoneyincscam.blogspot.com) Cannot believe Hodgins is still a fugitive. Also check this out http://www.moneymakergroup.com/Ceo-and-President-Virtual-t244972.html Sounds like Robert Hodgins is going to try and restart the company in Malaysia under the name Global V Money. Remind me not to get one of those cards!
It isnt hard to understand why so many of these debit card companies and payment processors are run by crooks.
With the exception of Pay Pal, who chose the legal route years ago, they deal with so many illegal and criminal schemes and provide such a level of anonymity, that it would be hard to find an honest businessman willing to run them.
Then the question becomes why does every “program” avoid banks, Visa, MasterCard and PayPal? Why does it seem every “program” requires “alternative” payment processors like eWallet, eGold, AlertPay, SecurePay, etc? The “alternative payment processors” charge much higher fees than traditional payment processors. Why are people willing to pay these fees if they are “only buying advertising”?
Obviously, the BofA processing of ASD funds seems to be an exception. I’m sure there are others.
To me, the requirement of using an “alternative” payment processor is a red flag.
I have NEVER needed to use anything but traditional banks and PayPal once or twice.
The answer to the question is surely that the people who run these schemes know perfectly well that they wouldnt “pass muster” with those organizations’ requirements, as none of them permit illegal businesses. Paypal goes so far as to forbid many mlms under their terms of acceptable use. Banks also have this uncomfortable habit of closing down bank accounts where they believe that illegal business is taking place (with the obvious exceptions. lol)
The method of payment for any “business” is certainly a good one to add to anyone’s due diligence list.
[…] Dallas-based company with ties to ASD was charged in a sealed indictment in April 2008 with helping a Colombian cocaine operation launder money by providing debit cards that were used to convert drug proceeds to cash in […]
[…] August 2009, we reported that a Dallas-based company, Virtual Money Inc. , which provided debit cards to Florida-based AdSurfDaily Inc., was indicted on charges of helping a Colombian cocaine operation launder money by providing cards […]