PatrickPretty.com

Day: March 31, 2010

  • Judge Orders More Than $5.5 Million In Penalties In George Theodule Ponzi That Targeted Haitian-Americans; Massive Litigation Involving Family Members, Winners, Attorneys Continues

    It is not nice to be George Theodule today. For starters, the expensive cars and other luxuries are gone — and now a federal judge has issued orders of disgorgement and penalties totaling more than $5.5 million in a Ponzi scheme case brought by the SEC in 2008.

    Beyond that, though, people associated with Theodule — family members, winners in the scheme, employees and attorneys who worked for him while the scheme was ramping up — find themselves battling a blizzard of lawsuits filed by the court-appointed receiver in the case and either going to trial or trying to work out settlements.

    Read a Dec. 31 filing by Jonathan E. Perlman, the receiver in the case against Theodule, Creative Capital Consortium LLC, A Creative Capital Concept$ LLC and other entities. The filing shows the type of legal exposure individuals who emerge as Ponzi scheme winners may confront, as well as the litigation individuals who allegedly aid and abet a Ponzi may confront.

    Several Theodule employees have taken the 5th Amendment, according to Perlman.

    Among his assertions was that more than $24 million in fraudulent transfers occurred during the scheme, which now is estimated to involve more than $60 million.

    Earlier estimates in the case put the figure at about $23 million.

    Theodule, through a network of “investment clubs,” largely targeted Haitian-Americans, the SEC said. Investors, who were told that some of the company’s profits were set aside to help Haiti and Haitian communities in the United States and Sierra Leone, were promised a 100 percent return on their money within 90 days.

    In reality, the SEC said, Theodule lost $18 million trading stocks and options, commingled funds and pitched a purported, self-regulatory agency called Smart Investment Management Services LLC (SIMS).

    Investors were told SIMS provided “independent verification of their deposits” and provided an “added measure of safety and security,” the SEC said.

    It turned out that SIMS was a private company run by a former Creative Capital employee, the SEC said.

    Investors said Theodule portrayed himself as a thoughtful, religious man.

  • Numerous Domains Linked To INetGlobal Entity Offline; V-Webs Domain And Sites That Use V-Web’s Nameserver Will Not Resolve

    UPDATED 12:28 P.M. EDT (U.S.A.) Sites appear to be back up. They were offline for at least seven hours. Earlier story is below . . .

    Widespread maintenance? Moving to a new server? Several domains linked to an entity associated with INetGlobal have gone offline in recent hours and will not resolve. Why the sites are offline was not immediately clear.

    The extent of the outage also was unclear. Sites that use a nameserver known as V-Webs.com appear to have been affected. V-Web’s own website will not resolve to a server, and sites at the same IP address in the Minneapolis area also will not resolve.

    Attempts to “ping” the domains to determine if they were live resulted in this error message: “Destination host unreachable.”

    It is not unusual for servers to have maintenance problems and for websites to go offline. What’s unusual about the current outage is that every URL at V-Webs itself appears to be offline, along with domains that use the V-webs.com nameserver. Customers affected by the outage may not be able to reach V-Webs through its website.

    INetGlobal’s domain, meanwhile, is online. The site did not have a message that explained the outage at V-Webs, which it highlights as a service.

    Among the domains affected by the outage is CheapClix.net, a Blog that showcases its support for INetGlobal. Other sites affected by the outage include mlm-im.com and homesquadcities.net, both of which are operated by Ken Haugen, who also operates the CheapClix site.

    INetGlobal was implicated last month by the U.S. Secret Service in a Ponzi scheme. The company denied the allegations. A company known as V-Webs LLC was registered in 2004, but appears to be an inactive corporation, according to an affidavit filed by the Secret Service last month.

    Haugen’s domains are not the only domains affected by the outage. Others affected include BillionaireByThirty.com, RevenueShareForum.com, WithGodItsPossible.com and JanetsMarketingBiz.com, among others.

    A site known as Zippe.net in the same IP cluster is producing the same error message when pinged, while also triggering a security warning in search results and the Firefox browser window: “This site may harm your computer.”

    Pings to the 207.67.5.19 IP address associated with V-Webs are timing out, meaning a Web browser cannot load the pages.