PatrickPretty.com

Day: March 10, 2011

  • PP Blog Operated By ‘Self-Appointed Idiot,’ Fan Of Nonexistent Nation Of ‘New Utopia’ Suggests; Blog Invited, Then Uninvited To Ceremony At ‘Palace’

    A man using the anonymous identity of “Mr. Protector,” a hotmail address and an IP in the Netherlands has scolded the PP Blog for a story that described “New Utopia” as a nonexistent nation in the Caribbean.

    New Utopia is the fanciful “tax haven” allegedly dreamed up by Lazarus R. Long, an American who declared himself a “prince” and hatched a plan to form a “new country” that would “rise from the Caribbean on giant concrete platforms built on an underwater land mass,” according to the SEC.

    Using the phrase “selfappointedidiotyouare” [Self Appointed Idiot You Are] apparently to chide the PP Blog for giving less than favorable coverage to the nonexistent nation, the man sent an email to the Blog this morning that both invited and uninvited the Blog to view New Utopia’s “Palace” on a date uncertain.

    “How about we print your words out about New Utopia in size 12 font and then, when New Utopia Construction begins, we can invite you there in front of the Palace and watch you eat the words and the paper they are written on?” the man wrote.

    In the very next paragraph, however, he uninvited the Blog.

    “[H]ow will we know to not allow you to visit The Principality of New Utopia?” the man inquired. “We will find a way of that be assured.”

    Although the context in which the man used the word “Protector” was unclear, it is a word that has been used by members of certain so-called “private associations” that challenge the authority of governments to regulate commerce and the securities industry.

    The AdViewGlobal (AVG) autosurf, for example, identified a member as a “Protector.” AVG has been identified in a racketeering lawsuit as an offshoot of the AdSurfDaily (ASD) autosurf. The lawsuit was filed by members of ASD.

    ASD was accused separately by the U.S. Secret Service of operating a $110 million Ponzi scheme and of committing wire fraud, securities fraud and engaging in the sale of unregistered securities.

    On Feb. 18, the PP Blog reported that federal agents — working with law-enforcement partners worldwide — had broken up a fraud ring operating in part from Florida, Costa Rica and elsewhere.

    Among the defendants charged both criminally and civilly was Jonathan R. Curshen. Curshen has been described as the one-time “honorary counsel” of St. Kitts-Nevis to Costa Rica and a purported “consulate” to New Utopia.

    New Utopia has its own website from which it sells an “International Drivers license” issued by New Utopia for $140.

    According to court records, the nonexistent principality is said to be located undersea “approximately 115 miles west of the Cayman Islands.” It would rise out of the water only after concrete stilts were erected and an above-sea base were anchored to a submerged land base.

    New Utopia, indeed, will rise, according to “Mr. Protector,” the author of the email sent to the PP Blog this morning.

    “Too many of us have worked too hard for too many years to just abandon this project,” he wrote.

    “Your ‘reporting’ does not help,” he complained.

    Long, also known as Howard Turney, was accused by the SEC in 1999 of promoting a fraudulent bond offering over the Internet to fund his upstart country. He settled with the agency in 2000 and was assessed a penalty of $24,000, but the penalty was waived.

    “Prince” Long has used the New Utopia website to complain bitterly about anonymous critics on the Internet. Whether “Mr. Protector” risked a royal scolding from the “Prince” for using an anonymous identity to contact the PP Blog was not immediately clear.

  • BULLETIN: CFTC Shuts Down Forex Scam Allegedly Operated In Wisconsin By Canadian Who Claimed Belize Incorporation; Website Of JadeFX Taken Offline; Federal Judge Orders Asset Freeze

    BULLETIN: A Canadian man was running a Forex scheme in the United States that touted its incorporation in Belize, the CFTC said.

    The scheme was operating from Wisconsin Dells, Wisc., and had at least six corporate bank accounts and two PayPal accounts into which customers sent money, the CFTC said.

    Named defendants in a case of solicitation fraud were Jacob Juma Omukwe, JadeFX Ltd. and Jade Investments Group LLC, all of Wisconsin Dells. Omukwe is a citizen of Canada, and the CFTC said that he “misappropriated more than $3.2 million from more than 500 customers in the United States and throughout the world to trade forex.”

    A federal judge has issued an emergency asset freeze. The JadeFX website has been taken offline. Neither Omukwe nor the companies was registered with the CFTC, and the website contained “many contradictory statements that appear to be the product of the Defendants having ‘lifted’ statements from various other websites hosted by legitimate forex dealers,” the CFTC charged.

    The case originally was filed under seal March 1. The seal was lifted after U.S. District Judge William M. Conley of the Western District of Wisconsin ordered an asset freeze and Omukwe consented to a permanent injunction.

    Omukwe told a sea of lies, according to the complaint. Among the lies was a claim that “JadeFX is operated out of Belize and does not conduct business in the United States,” the CFTC charged.

    Between June 2009 an Jan. 27, 2010, Omukwe and his fraudulent companies received more than $400,000 from investors “all over the world,” the CFTC charged.

    “However, during this eight month period, JadeFX had no forex trading account to place forex trades on behalf of customers,” the agency alleged.

    After Jan. 27, 2010, investors plowed more than $3 million into the scheme, and Omukwe kept about $2 million, according to the CFTC.

    Alarmingly, the CFTC added, “In order to foster the false impression that customer money is segregated from that of JadeFX, customers can download a software program from the Defendants’ website that purportedly enables customers to place forex trades in the customer’s account.

    “While Defendants create the appearance of segregated accounts for customers using the software program, in fact no such accounts exist,” the agency continued. “In reality, customers who send funds to the JadeFX or Jade bank accounts have no control over their funds once the money is sent to the Defendants’ bank accounts, which are controlled by Omukwe.”

    And Omukwe also falsely claimed to be “immune” to both U.S. law and laws of the individual states, the agency charged.

    All in all, the agency said, Omukwe had 12 bank accounts as part of the scheme, and used six of them to accept money from U.S. customers.

  • SEC: Recidivist Huckster Made Bedside Visit To Dying Man, Promised Him ‘Investment’ Would Take Care Of His Wife For ‘Life’; Couple’s Money Plundered In Apparent HYIP/Prime-Bank Hybrid Scheme With Link To Another Swindle

    EDITOR’S NOTE: Make no mistake: America is at risk from an epidemic of white-collar crime. American money is at risk, American prestige is at risk, and national security is at risk — as Americans hatch one fraud scheme after another and recruit other Americans (and citizens of other countries) to help the schemes mushroom. Some of the conduct reads like fiction of the strangest sort. It’s enough to want to make you gag.

    The story below may make some readers angry — and rightly so. It covers allegations against Larry Michael Parrish of Walkersville, Md. Parrish is accused by the SEC of orchestrating a $9.2 million swindle through IV Capital, his mysterious firm incorporated in Nevis, an island in the Caribbean.  The scheme allegedly had the characteristics of a sort of HYIP/prime bank hybrid.  “Programs” that resemble the one allegedly pushed by Parrish are regularly hawked on Ponzi scheme and criminals’ forums such as Talk Gold and MoneyMakerGroup. Because law enforcement has made inroads in educating the public about the dangers of HYIP schemes, the promoters of such schemes now are trying to make prospects believe they are not investing in an HYIP — and millions of dollars continue to vanish into giant, money-sucking sinkholes.

    The alleged Parrish scheme also has a link to another scheme — this one a “diamond-themed” caper, the SEC said.

    Get ready to gag . . .

    Posing as a concerned financial adviser and investment strategist, recidivist securities swindler Larry Michael Parrish of Walkersville, Md., visited a dying man in a Colorado hospital, the SEC said.

    The man was suffering from cancer. Parrish assured him that investing with him was safe, that the man’s wife would not have to worry about her finances after his death, that “the investment would provide for his wife for the rest of her life.”

    “That money is now gone,” the SEC said. And so is the money from 70 other investors in three states, about $9.2 million in all, the agency added.

    Because Parrish had had well-documented run-ins with the SEC, a trove of information about him was available online and in public filings. Some of his investors even found it. When they approached him with questions, Parrish lied, the SEC said.

    “When expressly asked by investors, Parrish denied that he was the named defendant,” the SEC charged.

    Although Parrish claimed he’d been running a successful business, he’d been running a Ponzi scheme since 2005, the agency said.

    The scheme began to collapse in June 2009, and the excuse-making began, the SEC said.

    “On August 17, 2009, Parrish wrote to his investors to explain the ‘delay in the payment of past earnings,’” the SEC charged. “The letter claimed that some investors in IV Capital had not paid taxes on earnings which ‘triggered a bank audit for the entire group.’”

    “Interest” payments could not be made until the purported bank audit had been completed and until the investors who purportedly weren’t complying with tax laws came into compliance, Parrish allegedly told investors.

    “As part of its investigation, the SEC did not find — and Parrish and IV Capital did not provide — any evidence that there ever was a bank audit that resulted in Parrish being unable to make payments to the investors,” the SEC said.

    But Parrish held to his cover story for months, the SEC said.

    In October 2009, he told investors that “there were still four members who were out of tax compliance,” the SEC said.

    By December 2009, the SEC said, Parrish was reporting good news to investors: Only three members purportedly remained out of tax compliance.

    Even so, the SEC said, Parrish told investors he faced other challenges. These challenges purportedly included “administrative work and time traveling and meeting with non-U.S. clients.”

    A Phantom Partner?

    In February 2010, two investors scheduled a meeting with Parrish in New York to talk about “missed payments and [the] current status of IV Capital. Parrish and a “purported partner in IV Capital” were supposed to attend the meeting.

    “The night before the two investors were to fly from Colorado, where they reside, to New York, Parrish contacted them to say the purported partner was unavailable to meet. As part of its investigation, the SEC did not find — and and IV Capital did not provide — any evidence that Parrish had any partner in IV Capital.”

    What the SEC eventually discovered was that Richard Dalton, who was running a separate, “diamond-themed”  Ponzi scheme, was acting as an agent for Parrish in the Parrish Ponzi scheme, which was called the “Trading Program.”

    Dalton’s alleged diamond-themed scheme also featured bizarre claims, including assertions that payments were delayed to investors because an airplane the firm used to shuttle diamonds from Africa lost an engine and had to make an emergency landing in Amsterdam.

    Parrish “misappropriated” at least $780,000 in investor funds by awarding himself cash, luxury vacations, a motorcycle, shopping trips, and other extravagances, the SEC said.

    He was not registered with the SEC, and had ignored orders handed down for previous misconduct, the SEC said.

    The nature of his new scheme involved some sort of high-risk trading on a limited basis, and part of the fraud is “presently uncategorizable,” the SEC said.

    “No investor funds remain,” the SEC said. “Parrish and IV Capital’s known bank accounts are empty.”

    Since the collapse of the scheme, “Parrish has virtually disappeared and refused to cooperate with the SEC during its investigation,” the agency said.