PROSECUTION: Renner Has No Standing To Contest Corporate Seizures In INetGlobal Case; ‘Major’ Fraud And Money-Laundering Probe Under Way; IRS Involved; No Media ‘Leak’ Occurred

Steve Renner has no standing to contest the seizure of “the vast majority”  of the money and assets in the INetGlobal autosurf Ponzi case because the seized property was owned by corporations, not Renner, federal prosecutors said.

Only $151,100 of the $26 million seized in the case came from accounts in Renner’s name, prosecutors said, arguing that bids to release the money were premature and that only an attorney for Renner — and not the companies — has filed a notice of appearance in the case.

Meanwhile, in its response to Renner’s motion last week to challenge the seizure on Constitutional grounds and have $25 million returned, the prosecution said yesterday that his bid was a “thinly veiled attempt to force the government to reveal facts relating to an on-going criminal investigation.”

A “major fraud and money laundering investigation is under way bearing serious criminal consequences,” prosecutors said.

The government probe, which prosecutors now say includes the IRS, is in its early stages. Investigators to date have filed neither a civil forfeiture complaint nor criminal charges that seek the forfeiture of the funds, “and much of the evidence has only recently been seized and is needed for the investigation,” prosecutors said.

“If the seized evidence is returned, it will not be available for the ongoing investigation,” prosecutors argued.

Moreover, they argued, “If the Court orders the return of the seized funds, the money will be spent, and will be unavailable for future return to victims” should the government prevail.

Prosecutors made similar arguments in the AdSurfDaily autosurf prosecution — and the arguments prevailed. In filings yesterday, the government once again cited the successful ASD prosecution, along with the successful prosecutions of the 12DailyPro and PhoenixSurf autosurfs.

“iNetGlobal is not a one-of-a-kind scam, nor is it the first of its kind,” prosecutors said yesterday.

Steve Renner was convicted on four felony counts of income-tax evasion in December, and is awaiting sentencing in the tax case.

No ‘Leak’ Occurred: Gov’t Acknowledges Timing ‘Error’ In Posting Of Affidavit

Prosecutors denied an assertion by Renner last week that the government had leaked the search-warrant affidavit in the INetGlobal case to the media.

Under a bold subhead titled “The ‘Leak,'” prosecutors said the claim the document was leaked “is false, and has no bearing on the issues presented in this motion.”

They added that the posting of the document on the government website was intended as a means of informing victims and witnesses efficiently, while trying to avoid a circumstance that occurred in the AdSurfDaily case: switchboards in prosecutors’ offices becoming inundated with telephone calls from people seeking information.

Prosecutors said the government had explained its point of view to INetGlobal on Feb. 26, almost a month prior to Renner’s “leaking” claim filed last week. Renner’s claim specifically cited the PP Blog.

“[T]he U.S. Attorney’s Office had planned, once the search and seizure warrants in this case were filed with the clerk’s office, to post a link to the affidavit on the website of the U.S. Attorney’s Office,” prosecutors said. “The U.S. Attorney’s Office for the District of Columbia was inundated with calls following their execution of warrants in the AdSurf Daily case, and the U.S. Attorney’s Office in Minnesota hoped to avoid this by efficiently getting information to victims, witnesses, and other interested parties by referring them to the affidavit.”

“Through an error, an employee of the U.S. Attorney’s Office’s Community Relations Division mistakenly believed that the time had come to post the affidavit when it had not,” prosecutors said. “The affidavit was posted on the late afternoon or early evening of February 24th, and was taken down the following morning when the error came to light.

“During the night, apparently, a single blogger found the affidavit and wrote a story about it,” prosecutors continued. “That story is reprinted in Mr. Renner’s motion papers. As noted, all of this was explained to Counsel immediately after the fact, and Counsel did not raise the issue of the premature release of the affidavit again until this motion was filed.”

IRS Enters INetGlobal Probe

Filings by the prosecution yesterday confirmed that the IRS has entered the case. An affidavit by an IRS criminal investigator asserts that an entity known as VMedia Marketing LLC opened a checking account at Premier Bank Minnesota on March 1, six days after the Secret Service executed search warrants in the INetGlobal case.

“Steven M. Renner reserved sole signature authority on the account upon inception,” the IRS agent said. “On or about March 6, 2010, Matthew D. Renner was added to have signature authority on the account.”

Matthew Renner is Steve Renner’s son. He has not been accused of wrongdoing.

A total of $47,400 was deposited in the account, the IRS agent said. He listed the names of sources of the deposits. Two individuals with Chinese names wired individual deposits of $7,400 and $8,500 into the account.

“Official checks” drawn on Wells Fargo bank and totaling $16,500 also were deposited in the account. These checks were made out to “V-Media or U-Media,” the IRS agent said.

Meanwhile, the agent said, “a check made payable to Steve Renner in the amount of $15,000.00 from The Toronto-Dominion Bank was also deposited into the account.”

At least 23 withdrawals were made from the account, the IRS agent said. He noted that the majority of these checks have either ‘week 3/1 – 3/5″ or ‘3/1 – 3/5 written on the memo line. In addition, one check was made payable to MEDA (Metropolitan Economic Development Assoc.) in the amount of $2,000.00. The memo section of the check made payable to MEDA stated ‘250 SECOND AVE #106A RENT.'”

That address was one of the business addresses searched by the Secret Service Feb. 23.

Prosecutors, saying Renner made “sweeping” assertions last week that he had no cash to pay employees, argued that the investigation by the IRS agent into the Premier Bank Minnesota account opened after the raid suggested otherwise.

“Renner subsequently wrote 23 checks that appear to be payroll checks, plus a check for the rent on Suite 106A, 250 Second Avenue,” prosecutors said.

Because the $15,000 deposit drawn on Toronto-Dominion bank was held until March 19, “several” withdrawals by check initially were returned to Premier Bank Minnesota, the IRS agent said.

“Later on, Steven Renner came into Premier Bank Minnesota and had cashier’s checks issued to the same names indicated on the checks that had previously been returned to the bank,” the IRS agent said. “On or about March 23, 2010, the above indicated account was closed.”

INetGlobal disclosed “none of this” in its arguments last week to release funds, prosecutors said.

Moreover, prosecutors said the government “is attempting to work with the company” on the issue of payroll.

Prosecution: INetGlobal ‘Omitted’ Names Of Employees

“[T]here is concern that the company continues to have access to unseized funds with which to make payroll,” prosecutors said. “In addition, the first list of employees submitted to the government omitted several names of people the Secret Service had identified as employees of the company during the execution of the search warrants on February 23, 2010. A request that this issue be addressed elicited a response that was confusing; the government requested clarification and is awaiting a response.”

Meanwhile, prosecutors claimed that Renner had placed “factual inaccuracies” in the record of the case, arguing that Renner’s claim that the seizure was “unreasonable” and that the Secret Service allegedly told “intentional and reckless falsehoods” in securing the warrant could not stand up to judicial scrutiny.

“Such is the unsurprising reaction of a company accused of running a Ponzi scheme,” prosecutors said.

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12 Responses to “PROSECUTION: Renner Has No Standing To Contest Corporate Seizures In INetGlobal Case; ‘Major’ Fraud And Money-Laundering Probe Under Way; IRS Involved; No Media ‘Leak’ Occurred”

  1. Maybe Renner needs to contact the ProAdvocate Group, and have them “intervene” like they tried to do in the ASD case. Maybe this Judge will fall for the “Oath of Office” ploy….

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  2. Don:

    Nah! They need to contact Mr. big Mouth and his Attorney who can guarantee to get standing for Renner provided he can come up with the $100,000.00 retainer.

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  3. A “major fraud and money laundering investigation is under way bearing serious criminal consequences,” prosecutors said.

    I keep hearing mention, unconfirmed blog posts mainly both here and over at Hospitalera’s that iNetGlobal “Uplines” are still recruiting and “making sales,” trading cash for AdPacs (V-Cash?). Now the “spin” is that they are collecting funds to pay for legal expenses but we all know what “member to member” transfers mean in the autosurf world. If true, real cash is being traded off the books and outside of controlling supervision.

    Even if some of the money does find it’s way into some as of yet unseized bank account under Renner’s control it still isn’t a legitimate or legal buisness transaction. And what’s to keep some hypothetical less than 100% honest iNetGlobal entrepreneur from liquidating has AdPac balance and pocketing the cash them self?

    Now the prosecutor mentions money laundering and the IRS enters the investigation. This is nothing that can be seen as a positive for the iNetGlobal faithful. Renner went farther than any previous autosurf operator in dressing his program up in a buisness suit, enough so that I have sympathy for people who’ve been fooled by the sales pitch. But folks, please believe this, if iNet’s accountants can’t prove this company is legit, their lawyers can’t either. If the “Black Diamonds” are trading off balance sheet after the companies accounts have been frozen, they are committing fraud and money laundering. And the IRS is watching, closely.

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  4. I’ve got a good idea. Perhaps we prove that the Company is legit and let the chips fall where they may between the government, Renner, and Keough. Clearly, the government’s “rub” is with Renner — Renner’s “rub” is with the government and with Keough. All along, as you know, I believe that the Company is legit.
    As for the players — hmmm?? As for the government — hmmm? If the government is really after one or more of the players, was it necessary to destroy the company in the process? If the players are really after each other, was it necessary to destroy the company in the process?? As someone commented on http://www.startribune.com, “plenty of dirt to go around.”
    But I guess I am biased. I am one of those who happens to have learned and taught people how to use the products. No “good work” goes unpunished. Instead of the “Empire” striking back, it appears that it is high time that the “Workers” strike back.
    Until today when I read the government’s memorandum, it did not occur to me that iNetGlobal, — the Company itself, — has yet to be properly represented, legally, over the past few weeks since the raid, — and that was quite stupid of those of us who have legitimately learned and taught. That situation is about to change!
    In defense of the government, they make it very clear in the “memorandum” that we should do just that (one can challenge their legal methods, however.)
    In defense of Renner, he considers it to be his company — therefore his right and responsibility to protect and to serve (one can challenge the legal methods, however.)
    In defense of Keough, I’d guess that he and Renner had one big pissing contest, so Keough felt justified (one can challenge his legal methods, however).
    As for the Company, there appears to be some light at the end of the tunnel, and we can only trust in the integrity and the wisdom of Honorable Judge Frank to see through all of this. Hard working people have been hurt because of three opposing forces that don’t like each other very much. I think that Judge Frank believes in Power-to-the-People. If there are any issues that need to be fixed, the people can handle it.

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  5. Ken: In defense of Renner, he considers it to be his company — therefore his right and responsibility to protect and to serve (one can challenge the legal methods, however.)

    This is immaterial. I doubt the judge will be impressed. Renner is a fool if he does not get representation for both himself and hire representation for the company.

    You trusted your money to someone this naive?

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  6. Ken: I’ve got a good idea. Perhaps we prove that the Company is legit and let the chips fall where they may between the government, Renner, and Keough. Clearly, the government’s “rub” is with Renner — Renner’s “rub” is with the government and with Keough. All along, as you know, I believe that the Company is legit.

    Howdy Ken, I believe that proving the legitimacy of iNetGlobal, or rather the lack there of will be the central focus of the prosecution’s case. It might be comforting to believe that this is a case of Renner vs. the Government with Mr.Keough waving his hand like this was some sort of tag team match. But you know better than that, even if it hasn’t sunk all the way in yet.

    Mr.Renner, the owner of iNetGlobal does have legal problems independent of iNetGlobal. I wanted to state that clearly so as to avoid any further confusion. But it is at best disingenuous and at worst completely dishonest to lazily assume that all of the governments problems with iNetGlobal are only and completely related to Mr.Renner. And while Mr.Keough’s motives and propriety might make for a topic of discussion, the Secret Service didn’t step in only because of what he said to them. I’ve never seen you blame all of iNetGlobal’s problems on a Chinese “copycat” website but others have so let’s throw that into the mix of excuses that don’t hold water. iNetGlobal is where it is today because of it’s buisness plan.

    Mr.Renner, and I’m not sure if “credit” is what I give him for this but he did more to “dress up” the basic autosurf model than anyone who ever has been prosecuted for running one before. He sold overpriced webhosting and a lot of other “services”, but unless the government is wrong the real financial driver is the sale of and rebates on what Ad Surf Daily called ad packs. At one point Mr.Renner changed the buisness model enough that they were called AdPacs. Aside from offering a lower (yet still un-guaranteed) daily rebate and deleting the letter “K” I don’t see much that Mr.Renner has changed from Andy Bowdoin’s buisness model and I suspect this will be the central issue at trail. But again I caution you, if no accountant can prove iNetGlobal’s legitimacy to the court, no lawyer will either.

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  7. Dirty_Bird – Well done, on one point – but you ignored two other points. You will also note that I said: “That situation is about to change!”

    I also said: “Hard working people have been hurt because of three opposing forces that don’t like each other very much.” — I cherish peoples’ hard work more than money. Again in Renner’s defense, — perhaps it is naive too — there is a lot of hard work behind iNetGlobal. That cannot be ignored either. I am on the record with an earlier correspondence to Judge Frank, pursuant to Renner’s Tax Case, as to Renner’s strengths despite his other human-condition-weaknesses. God has sent him two rescue-boats and a rescue-chopper, but his human-condition does not trust that God has sent them. The two rescue-boats are the key employees – and the key product-users. They are people that appreciate the genius of the internet marketing knowledge that Renner has brought to iNetGlobal. The rescue-chopper is the government, itself. They are the people that are — if you read the government’s memorandum — they are the people that are suggesting that the Company show up in court. If Renner does not “get it” now, then you are absolutely right about him.

    The two points that you ignored, however, are:
    1) In defense of the government, they make it very clear in the “memorandum” that we should do just that (one can challenge their legal methods, however.) Emphasis added: “one can challenge their legal methods.”
    2) In defense of Keough, I’d guess that he and Renner had one big pissing contest, so Keough felt justified (one can challenge his legal methods, however). Emphasis added: “one can challenge his legal methods.”

    Plenty of dirt to go around.

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  8. Yes, with every dollar you take, that’s another person you are hurting. I don;t see why you are shining the spotlight on yourself but so be it. You could always get mr. ‘radical black’ and play the race card.

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  9. 1. If there is plenty dirt to go around, the judge will frown upon the prosecution’s conduct and the case will be thrown out.

    2. I have no intention on debating each of your points.

    3. My point was simply that corporations are artificial “persons” under law. As such, they are entitled to and need representation when they are accused of a crime. In this case, the corporation is accused of a crime. Yet Renner responds? Renner can respond (or not) to the accusations against him.

    Ken: Dirty_Bird – Well done, on one point – but you ignored two other points. You will also note that I said: “That situation is about to change!”

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  10. Hey, how come no one is talking about the return of iNetGlobal’s equipment today? Explain that patrick. It’s there, I saw it.

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  11. Doc: Hey, how come no one is talking about the return of iNetGlobal’s equipment today? Explain that patrick. It’s there, I saw it.  

    So what? Once the FBI have copied all the information on the hard drives why shouldn’t they return the computers? Hardly a big deal.

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  12. Patrick,

    can you share with us the source of this news which states that iNetGlobal has not yet filed a notice of appearance in the case? and as of which date? thanks.

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