Pathway To Prosperity Case A Subject Of Discussion In Washington’s Highest Power Corridors; Website Of U.S. Attorney General Includes Link To Case Info As Part Of ‘Mass-Marketing Fraud’ Educational Campaign

From the June 2010 International Mass-Marketing Fraud Working Group report.

In November 2009, President Obama formed the interagency Financial Fraud Enforcement Task Force (FFETF). By January, U.S. Attorney General Eric Holder, who answers to Obama,  publicly warned fraudsters that “if you propagate an investment scheme, if you are complicit in an act of financial fraud, you are writing your ticket to jail.”

It now turns out that the investigation into the business practices of Nicholas Smirnow and unnamed co-conspirators in an alleged $70 million, HYIP Ponzi scheme known as Pathway To Prosperity (P2P) was undertaken by elements of the FFETF.

It further turns out the the U.S. Department of Justice — under Holder’s command — is using the P2P probe and the criminal charges it led to against Smirnow to educate the public on a global scale about “mass-marketing fraud.”

The P2P case was mentioned prominently in a news release yesterday by the Justice Department to publicize international, cooperative efforts among seven governments to curb the proliferation of fraud that occurs on the Internet, over the telephone, through the mails, through group meetings and through other forms of mass communication.

Last week, federal prosecutors thanked the Rotterdam-Rijnmond Regional Police in Rotterdam in the Netherlands, Filipino authorities, and the Ontario Securities Commission in Canada for assisting in the P2P probe.

Meanwhile, an entity known as the International Mass-Marketing Fraud Working Group (IMMFWG) has released a “threat assessment” to provide governments and the public with a current assessment of the nature and scope of the threat that mass-marketing fraud poses around the world.

IMMFWG’s participating countries include the United States, Australia, Belgium, Canada, the Netherlands, Nigeria and the United Kingdom, as well as Europol, the European police agency.

“The IMMFWG seeks to facilitate the multinational exchange of information and intelligence, the coordination of cross-border operations to detect, disrupt, and apprehend mass-marketing fraud, and the enhancement of public-awareness and public-education measures concerning international mass-marketing fraud schemes,” the group said.

In the Justice Department news release yesterday to publicize IMMFWG’s threat assessment, prosecutors pointedly referenced the P2P case.

“Last week the U.S. Attorney’s Office for the Southern District of Illinois charged an individual for allegedly engaging in an international Ponzi scheme that was operated through a website,” the Justice Department said. “The scheme allegedly resulted in a total of $70 million in losses to more than 40,000 investors in more than 120 countries.”

The news release included a link to information on the P2P case, and the letterhead in the document featured the logos of both the Justice Department and the Task Force Obama created in November.

Despite very public warnings from Holder that the United States is serious about sending financial fraudsters to jail and a declaration in the complaint against P2P’s Smirnow that “[a] large percentage, if not all, HYIPs, are Ponzi schemes,” members of Ponzi-pushing forums such as ASA Monitor, MoneyMakerGroup, TalkGold and MyCashForums are still out in full force to push Ponzi schemes on the U.S. and world public.

For its part, IMMFWG said in its threat assessment yesterday that “[t]here are strong indications that the order of magnitude of global mass-marketing fraud losses is in the tens of billions of dollars per year.”

IMMFWG also said “[m]ass-marketing fraud has gradually transformed from a predominantly North American crime problem into a pervasive global criminal threat.”

“For some victims,” IMMFWG said, “the risks extend well beyond loss of personal savings or funds to include physical threats or risks, loss of their homes, depression, and even contemplated, attempted, or actual suicide.”

IMMFWG noted that “[l]arge-scale criminal mass-marketing fraud operations are present in multiple countries in most regions of the world” and that “similarities between such operations include targeting victims in other countries, foreign outsourcing of operations, and involvement of organized criminal enterprises.”

Read the Justice Department news release that references P2P in the context of IMMFWG’s global effort to educate the public about mass-marketing fraud and the hideous economic and social consequences of such fraud.

Read IMMFWG’s threat assessment as published by the interagency Financial Fraud Enforcement Task Force.