KABOOM! Alleged Commodities Ponzi Scheme Run By Mexican Nationals On U.S. Soil Dumped Money Into TWO Other Failed HYIP Fraud Schemes, Investigators Say; Ruben Gonzalez, Jose C. Naranjo Charged By CFTC

UPDATED 10:17 A.M. EDT (May 25, U.S.A.) It has been another nasty day for the HYIP and autosurf “industries” and their apologists. Investigators have charged two Mexican nationals with operating a Ponzi scheme on U.S. soil. The alleged scheme, which used names such as New Golden Investment Group LLC (NGI), NGI Group LLC, New Golden Management, New Golden Entertainment LLC, Grupo NGI International Inc. and NGI International Inc., targeted Latinos in Greater Los Angeles, authorities said.

Charged by the CFTC is the case were the companies and their operators, Ruben Gonzalez of West Covina, Calif., and Jose C. Naranjo of La Mirada, Calif. Both men are Mexican nationals. Their ages were not immediately known. Gonzalez was jailed in October on immigration charges, authorities said.

Gonzalez also has been indicted on criminal charges of mail fraud and wire fraud, the CFTC said.

The alleged NGI scheme has ties to other fraud schemes, including the Traders International Return Network (TIRN) scheme and the alleged Finanzas Forex scheme, authorities said. Criminal charges have flowed from the TIRN scheme, and the Finanzas Forex scheme — allegedly part of an international scheme known as Evolution Market Group (EMG) — has resulted in allegations that proceeds from the EMG scheme found their way into bank accounts seized by the U.S. Drug Enforcement Administration in a narcotics investigation in Arizona.

Meanwhile, the TIRN scheme, which operated from Florida and claimed a presence in Panama, also has a tie to the alleged INetGlobal autosurf Ponzi scheme. Both TIRN and INetGlobal used the same debit-card company to pay members, according to court filings.

Gonzalez and Naranjo gathered $3.65 million in the NGI scheme beginning in August 2008, dumping at least $100,000 into TIRN and $290,000 into Finanzas Forex, the CFTC said. All of the money appears to have been misappropriated, with Gonzalez transferring “at least” $260,000 from NGI member funds to his personal bank account and Naranjo transferring “at least” $267,000 from NGI member funds to his personal bank account.

About $62,000 transferred into Naranjo’s bank account was withdrawn in cash, the CFTC said.

The men “used investor funds to purchase a Mercedes-Benz, airline tickets, various other retail items and to make payments on a home,” the CFTC said.

It is possible that as much as $1 million was directed at Finanzas Forex, the CFTC said.

Gonzalez and Naranjo tricked investors by making them believe NGI was a real commodities-trading business.

“Gonzalez, Naranjo and NGI falsely presented NGI as a successful trading company by displaying trading software on NGI’s office computers to make it appear to customers and prospective customers that NGI was engaged in electronic commodity futures trading,” the CFTC said.

In reality, “NGI did not trade commodity futures for customers and did not make any of their advertised profits. Instead, Gonzalez and Naranjo allegedly ran a Ponzi scheme using new investor money to pay purported profits to existing investors,” the CFTC said.

Part of the NGI sales pitch was similar to the sales pitch of yet another Ponzi scheme: the Learn Waterhouse scheme, which operated from California and also has a tie to INetGlobal, according to court records.

INetGlobal operator Steve Renner provided payment-processing services for the Learn Waterhouse Ponzi scheme through an entity known as Cash Cards International, according to court records.

Learn Waterhouse talked about purported investments in “gold” in Mexico. According to the CFTC complaint in the NGI case, NGI did the same thing, falsely claiming to customers that “they would double their money within a year in oil, gold, silver and other commodities.”

NGI stopped making payments to investors in about June 2009, the CFTC said. At least 165 investors were affected.

Gonzalez and Naranjo told customers that the payments stopped because a bank in Mexico was holding the funds and refused to release them. The men then told investors to have patience because a new deal involving oil was on the horizon and that investors who left their money with NGI son would have “huge” profits, the CFTC said.

Investors were encouraged to fund accounts with money from credit cards or retirement savings, the CFTC said.

NGI had been operating since about August 2008, according to records. That’s the same month INetGlobal was coming onto the autosurf stage, and AdSurfDaily was exiting the stage.

The U.S. Secret Service said it believed both INetGlobal and AdSurfDaily were operating Ponzi schemes.

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  1. This FBI release just in . . .

    A federal grand jury returned an indictment charging two brothers in connection with operating a Ponzi scheme where victims were recruited through advertisements that indicated investments were connected to the Economic Stimulus Plan, announced Steven M. Martinez, the Assistant Director in Charge of the FBI in Los Angeles, and André Birotte Jr, United States Attorney for Los Angeles.

    Ruben Juan-Gonzalez, 34, of West Covina, California, and his brother, Rosendo Juan-Zaragoza, 27, of Los Angeles, California, were indicted by the grand jury in Los Angeles Thursday afternoon. The indictment alleges the $3.6 million Ponzi scheme defrauded approximately 160 investors in Los Angeles and around the southern California region. The indictment charges defendant Gonzalez with conspiracy, three counts of mail fraud, four counts of wire fraud, two counts of money laundering and one count of using a false social security number. Defendant Zaragoza is charged with a single count of money laundering.

    The indictment alleges that Gonzalez and an unnamed co-conspirator operated the scheme out of an office in West Covina, California, under the names New Golden Investments Group, NGI Group and other related entities. The indictment alleges that Gonzalez and the unnamed co-conspirator misled investors by claiming to invest money into foreign currency and commodities, including gold and silver, real estate developments, and precious metal mines in Mexico. Investors were promised annual returns of anywhere from 60 to 120 percent. The indictment alleges that some advertisements in local magazines claimed the investment program was connected to the American Recovery and Reinvestment Act of 2009, also known as the Economic Stimulus Plan.

    The investigation revealed that Gonzalez and the unnamed co-conspirator invested only a small portion of investors’ money into unprofitable ventures. Unbeknownst to investors, approximately $900,000 of investor money was used for personal expenses, including the lease of a luxury Mercedes-Benz S55 for defendant Gonzalez, and the purchase of gold and diamond jewelry, including Rolex watches, for defendant Gonzalez and the unnamed co-conspirator. The indictment alleges that investors were not told that their investments would be used to make interest payments to prior investors. The indictment further alleges that defendant Gonzalez failed to tell investors that he filed for bankruptcy in 2005, and that he was prohibited from re-entering the United States for five years after having been deported in September 2006. Defendant Zaragoza is alleged to have withdrawn the last remaining investor money from one of the accounts.

    Defendants Gonzalez was previously arrested in connection with an immigration violation. Defendant Zaragoza was arrested last week on an arrest warrant for the money laundering charge. Both defendants are scheduled for arraignment on June 1, 2010.

    If convicted on all charges, defendant Gonzalez faces a statutory maximum sentence of 175 years in prison. Defendant Zaragoza faces up to ten years in prison.

    This case was investigated by the FBI’s Los Angeles Field Office and the Social Security Administration’s Office of Inspector General, with considerable assistance provided by U.S. Immigration and Customs Enforcement and the Commodity Futures Trading Commission. This case will be prosecuted by the United States Attorney’s Office in Los Angeles.

      (Quote)

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