Pensacola Fraudsters Sentenced To Federal Prison; Pinnacle Quest International Vendors Sold ‘Tax And Credit Card Debt Elimination Scams,’ Federal Prosecutors, IRS Say
â€œThey helped form a series of sham business entities and then promoted fraudulent debt elimination tactics intended for the sole purpose of concealing income from the IRS.” — Victor S. O. Song, chief, IRS Criminal Investigation
As the U.S. Department of Agriculture was conducting a “review” of claims made by affiliates of a purported “grocery” business in Pensacola, Fla., that dispenses “gift cards” to winners in a 2×2 matrix cycler, a federal judge in Pensacola was handing out prison sentences to defendants convicted in a tax-fraud and debt-elimination scheme.
All in all, nine promoters were implicated in the Pinnacle Quest International (PQI) case. Four were sentenced to prison in July. Two others will be sentenced in October, and three were sentenced yesterday for their roles in an elaborate fraud in which PQI served as an “umbrella organization for numerous vendors of tax and credit card debt elimination scams,” federal prosecutors said.
Eugene Casternovia received 7 years in prison. Arthur Merino, meanwhile, was sentenced to 40 months. Mark Lyon, the third defendant sentenced yesterday, cooperated with prosecutors and received a sentence of 18 months.
Among the PQI vendors was the Southern Oregon Resource Center for Education (SORCE), which “sold bogus theories and strategies for tax evasion,” prosecutors said.
“For fees starting at $10,000, SORCE assisted its customers in the creation of a series of sham business entities in the United States and Panama,” prosecutors said. “Other tax-related PQI vendors denied the legitimacy of the income tax system on various theories and provided customers with a ‘reliance defense’ that consisted of a paper trail of frivolous correspondence which a client could allegedly use as evidence of good faith if the client were prosecuted.”
Financial Solutions, another PQI vendor, sold “fraudulent schemes for eliminating credit card debt,” prosecutors said.
“Financial Solutions charged its customers thousands of dollars for a series of letters to send to credit card companies disputing the lawfulness of the underlying debt,” prosecutors said. “The product was wholly ineffective, and customers typically were sued by their creditors and often forced into bankruptcy.”
At the same time, yet-another PQI vendor known as MYICIS “operated as a sophisticated, computerized ‘warehouse bank,'” prosecutors said.
“MYICIS was a single bank account in which customers pooled their money,” prosecutors said. “MYICIS was promoted to PQIâ€™s clients as a method to hide their assets from the IRS as a result of the pooled nature of the account. MYICIS had 3,000 clients and approximately $100 million in deposits over a three year period.”
A veteran IRS agent declared the business entities tied to the PQI case a “sham.”
“These defendants are now being held accountable for their criminal behavior,â€ said Victor S. O. Song, chief, IRS Criminal Investigation. â€œThey helped form a series of sham business entities and then promoted fraudulent debt elimination tactics intended for the sole purpose of concealing income from the IRS. Their tactics were fraudulent. There is no secret formula that can eliminate an individualâ€™s tax obligation.â€
In July, Arnold Ray Manansala was sentenced to 12 years in prison; Dover Eugene Perry, meanwhile, was sentenced to 10 years. Michael Guy Leonard was sentenced to nine years and one month, and Mark Daniel Leitner was sentenced to five years.
The trial in Pensacola took up a full month. Wayne Hicks, the operator of My Icis Inc., already was serving a five-year prison sentence.
FBI Director Robert Mueller has warned Congress at least twice this year about a “shadow” banking system that is a threat to U.S. national security.
In November, President Obama formed the Financial Fraud Enforcement Task Force to attack the problem with white-collar and other forms of fraud. It is billed the “broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.”
MYICIS was a topic of discussion on known Ponzi scheme and fraud forums such as TalkGold. In May, the U.S. Postal Inspection Service referenced the forums in filings in a criminal case against an alleged Ponzi scheme known as Pathway To Prosperity.
In recent months, a Pensacola business known as MPB Today (My Premier Business Today) has been operating an MLM program that purports to sell “groceries.” The program has been advertised on TalkGold, and other known Ponzi forums.
One MPB Today affiliate attempted to sell the program by creating a video animation and depicting President Obama and Secretary of State Hillary Clinton as Nazis. Clinton was called “Hitlary” in the promo.
Others have attempted to sell the MPB Today business “opportunity” by linking it to the federal Food Stamp program administered by the Department of Agriculture. The USDA announced earlier this month that it was conducting a “review” of affiliate claims.
Still other MPB Today affiliates have focused on recruiting prospects by telling them they’d receive “gift cards” from Walmart. At least one promo on YouTube shows an envelope inside an envelope that had been mailed through the U.S. Postal Service.
Such an approach is consistent with the practices of “cash-gifters” — people who use the mails to promote chain-letter pyramid and tax schemes. The inside envelope in the YouTube video showed that at least one MPB Today affiliate had been paid with a prepaid Visa card purchased at Walmart. The envelope also contained a Walmart gift card.
In the YouTube video, the MPB Today affiliate appeared to be surprised about what he’d just received in the mail.
One promo after another for MPB Today has emphasized the gift cards. Still other affiliates have produced videos that show checks drawn on an FDIC-insured bank in Pensacola that has been operating since January under a consent agreement with the FDIC.
Florida has been plagued by mortgage foreclosures. MPB Today is targeting foreclosure subjects in a video pitch, as are many affiliates. Affiliates also have targeted the unemployed, senior citizens, people of faith and members of the alleged AdSurfDaily (ASD) Ponzi scheme.
ASD also was based in Florida. The company is known to have attracted affiliates who participated in tax, debt-elimination and cash-gifting schemes. At least one ASD affiliate has been linked to a group that sought to imprison federal judges and litigation opponents in debt cases. Another affiliate filed papers in federal court that purported to show that a bank could be defeated in a foreclosure case by filing a bond consisting of $21 in “silver coinage.”
At least one MPB Today promoter positioned the grocery company as an opportunity for religious members of ASD to make up losses in the failed autosurf. The U.S. Secret Service has seized tens of millions of dollars from bank accounts linked to ASD.
Florida records show that MPB and its associated grocery company — Southeastern Delivery — have operated by at least five names since 2006. MPB Today operator Gary Calhoun was ordered by the U.S. Food and Drug Administration to stop violating federal law in promotions for a product marketed as a treatment for Lou Gehrig’s disease, among others.
ASD President Andy Bowdoin also operated numerous companies in Florida. according to records.