BREAKING NEWS: FBI Tells Senate Judiciary Committee It Is Probing 314 HYIP Schemes Only Months After ASD Members Asked Panel To Probe Prosecutors

Kevin L. Perkins of the FBI tells the Senate Judiciary Committee that the agency is investigating 1,500 cases of securities fraud and that 314 of them involve HYIP fraud in various forms.

Kevin L. Perkins of the FBI tells the Senate Judiciary Committee that the agency is investigating 1,500 cases of securities fraud and that 314 of them involve HYIP fraud in various forms.

And to think that only months ago — in February 2009 — various members of AdSurfDaily wrote to the Senate Judiciary Committee trying to elicit support for Ponzi schemes. The letter-writing campaign was spearheaded by “Professor” Patrick Moriarty and pushed by the Pro-AdSurfDaily Surf’s Up forum.

But now the FBI has told the committee, led by Sen. Patrick Leahy, D.-Vermont, that it has registered a 105 percent increase in HYIP fraud and opened 314 investigations in 2009, up from 154 in 2008.

“[M]any [had] losses exceeding $100 million,” said Kevin L. Perkins, assistant director of the FBI’s Criminal Investigations Division.

Perkins said the probes cover the gamut — from the massive Ponzi scheme fraud of Bernard Madoff to smaller variations of the Ponzi scheme.

“These schemes use money collected from new victims, rather than profits from an underlying business venture, to pay the high rates of return promised to earlier investors,” Perkins told the Committee.  “This arrangement gives investors the impression there is a legitimate, money-making enterprise behind the fraudster’s story; but in reality, unwitting investors are the only source of funding.”

During his testimony, Perkins also referenced “prime-bank schemes” in which victims are told that “certain financial instruments such as notes, letters of credit, debentures, or guarantees have been issued by well-known institutions such as the World Bank, and offer a risk-free opportunity with high rates of return.”

In August 2008, in a forfeiture complaint against the assets of AdSurfDaily and Golden Panda Ad Builder, federal prosecutors revealed that Golden Panda President Clarence Busby had been sued civilly by the SEC in the 1990s after he was implicated in three prime-bank schemes. At the same time, prosecutors revealed ASD President Andy Bowdoin had been arrested for felony securities fraud in Alabama during the same decade.

Despite the Ponzi allegations against ASD and the histories of Bowdoin and Busby, Surf’s Up urged the Judiciary Committee to investigate the prosecutors who brought the forfeiture cases against ASD and Golden Panda in August 2008.

“We each need to explain [to Leahy] how thousands of innocent Americans have suffered and continue to suffer because of these incredible and despicable acts” by prosecutors, Surf’s Up urged members.

Law enforcement is investigating a stunning number of securities-fraud cases, the FBI revealed.

“The FBI continues to aggressively investigate this criminal threat, and currently has more than 1,500 related securities fraud investigations,” Perkins said.

Read about the Moriarty/Surf’s Up letter-writing campaign to the Senate Judiciary Committee.

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3 Responses to “BREAKING NEWS: FBI Tells Senate Judiciary Committee It Is Probing 314 HYIP Schemes Only Months After ASD Members Asked Panel To Probe Prosecutors”

  1. The article title and first paragraph are priceless.

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  2. The full statement is here:
    http://www.fbi.gov/congress/congress09/perkins120909.htm

    Victims are often drawn into prime bank investment frauds because the criminals use sophisticated terms, legal looking documents, and claim that the investments are insured against loss.

    Remember that ASD advert where they said it was FDIC insured?

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  3. Hi Tony,

    Tony H: Remember that ASD advert where they said it was FDIC insured?

    Indeed. The ad also said ASD provided “shelter” from the FTC and the SEC.

    Then AVG came along, highlighting a purported headquarters in Uruguay and saying it “definitely” and “truly” was an “offshore” business.

    Late in the summer of 2009, in response to all the pro se litigants, prosecutors filed a document that said ASD members were going to have a hard time proving ASD operated legally at any point in its history:

    http://patrickpretty.com/2009/09/09/musings-its-possible-asd-never-operated-legally/

    And, speaking of the FDIC insurance claim, the debit card ASD was using at the time of the FTC/SEC/FDIC claims was provided by a company under indictment for helping a Colombian drug cartel launder money in Medellin and for accepting a payment to launder money in the Dominican Republic.

    http://patrickpretty.com/2009/08/18/analysis-drug-enforcement-administration-reportedly-has-photographic-evidence-that-firm-that-provided-debit-cards-to-adsurfdaily-accepted-cash-to-launder-money-offshore-in-drug-sting/

    Patrick

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