BREAKING NEWS: Receiver In ASI/Brett Blackman Case Delivers Devastating Preliminary Report; Noobing Autosurf Identified As Part Of ASI Affiliate Fold And Was Registered In Nevis; Belize Used For Other Firm

A receiver appointed to review financial records of Affiliate Strategies Inc. and related companies named defendants in a fraudulent government-grants scheme last month advised a federal judge that the companies were insolvent and had less than one day’s operating cash requirements in their bank accounts.

Astonishingly, receiver Larry Cook advised U.S. District Judge Julie A. Robinson that the attorneys he hired to assist in the probe “received thirty two US Mail crates” filled with complaints on Wednesday alone.

“Although it is difficult to summarize the mass volume of calls and letters, a majority of the communications are from elderly individuals, or their children, who have discovered automatic checking account deductions from their, or their parents’, checking accounts and are requesting refunds,” Cook said in the preliminary report.

Although Cook advised the judge he has been able to recover about $300,000 through the early weeks of his investigation and expected to recover more as the investigation proceeds, the defendants’ businesses appeared to be broke.

“The Receiver’s work over the past three weeks suggests the Defendants’ operations were insolvent on the date [July 24] the [Temporary Restraining Order] was entered and that for at least all of 2009, Defendants operated only by signing up new victims faster than the old victims could obtain refunds,” Cook said.

He observed that the “Defendants’ business operations were high revenue/low margin operations which required significant cash in-flows from new victims to meet current trade creditor and consumer refund obligations.”

Noobing, an autosurf that targeted people with hearing impairments, was identified by Cook as a company affiliated with ASI. Noobing was not named a defendant in the fraud complaint filed last month by the Federal Trade Commission and the attorneys general of Kansas, Minnesota and North Carolina.

Cook, though, said he discovered Noobing had registered as a corporation on the Caribbean island of Nevis on March 25, 2009. Noobing launched last year and was promoted by members of AdSurfDaily Inc., a surf firm from which the U.S. government seized tens of millions of dollars last year in a wire-fraud, money-laundering and Ponzi scheme probe.

Noobing generated more than $590,000 in revenue last year and more than $541,000 this year before going offline, according to Cook’s preliminary report.

Cook estimated that Noobing was in the hole nearly $550,000 since last year.

Blackman, according to Cook, recently registered several corporations offshore, including Noobing; ASI Management Inc., formed in Belize on March 24, 2009; Landmark Publishing Group LLC, formed in Nevis on March 25, 2009; Landmark Publishing LLC, formed in Nevis on March 25, 2009; International Research and Writing Group LLC, formed in Nevis on July 1, 2009; and International Publishing Group LLC, formed in Nevis on July 1, 2009.

All in all, Cook said, “the ASI defendants have formed and operated eighteen additional Kansas LLCs as subsidiaries of Defendant Apex Holdings International LLC.”

“Of immediate concern is the large distributions and salary paid to defendant Brett Black[man] since 2008,” Cook advised the judge in his report. “Per the QuickBooks accounting records, Blackman received $841,545 of distributions from Apex Holdings International, LLC in 2008 and made a net contribution of $491,559 into Affiliate Strategies, Inc. ($581,388 of contributions and $89,829 of distributions) for a total net distribution of $349,986, in addition to salary payments of $118,049.

“In 2009,” Cook continued, “Blackman has received $253,506 of distributions from Apex Holdings International, LLC and has made a net contribution of $113,000 into Affiliate Strategies, Inc. ($349,000 of contributions and $226,000 of distributions). The total net distributions and salary to Blackman for 2008 and 2009 is approximately $490,000.”

Cook said his assessment was ongoing. He reported that some of the accounts involved in the investigation had chargeback rates of as high as 77 percent, meaning that better than three of four customers who made credit-card charges requested refunds.

Read Cook’s preliminary report.

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6 Responses to “BREAKING NEWS: Receiver In ASI/Brett Blackman Case Delivers Devastating Preliminary Report; Noobing Autosurf Identified As Part Of ASI Affiliate Fold And Was Registered In Nevis; Belize Used For Other Firm”

  1. Why am I not surpised to read this?

    When will people start to realise that the schemes that look too good to be true are NOT run by honest, law abiding citizens.

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  2. One of the things that has been really frustrating for the Receiver is the Judge has not allowed the freezing of the personal assets of the individuals charged in this case. Several very high ticket items, which were put in other people’s names and paid in cash, are now trying to be sold at a fire sale via Craig’s List. To my knowledge, one of the items was just sold while two others are tyring to be sold.

    Hopefully the Attorney’s for the Receiver will be able to convince the judge these assets need to be frozen to help the victims receive part of their money back. It will be interesting to see what the Judge says this coming week about allowing these assets to be frozen.

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  3. The moving business can be lucrative, but as it turns out there’s a lot of heavy lifting involved. So at age 20 I sold my company, my wife sold hers, and I went into the mortgage business. I’ve been blessed with many things throughout my life, including the skills to make a good living in that industry. But as an FHA loan officer, I didn’t believe in selling the high interest rate 100% mortgages that have now caused our economy so much trouble. And after three years in the mortgage industry, I realized I needed to make yet another change.

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