Post On Infamous Ponzi Forum Claims PayPal Has Frozen Club Asteria Funds; Virginia-Based Firm Reportedly Slashes Weekly ‘Earnings’ Payout And Arbitrarily Withholds Payments To Members

UPDATED 9:37 A.M. EDT (U.S.A.) A post on the MoneyMakerGroup Ponzi scheme and criminals’ forum claims that PayPal has frozen funds of Club Asteria (CA), a Virginia-based firm that trades on the name of the World Bank and does not publish verifiable financial data.

There was no independent confirmation of the claim on CA’s landing page or the news section of its website this morning, which leads to questions about whether prospects contemplating joining the “opportunity” know about the purported PayPal development and its negative effect on CA’s operations.

Whether CA’s current members have been instructed by the company to let prospects know about the purported PayPal development is unclear. If the PayPal news is true, prospects denied access to it at sign-up could create problems for the company and its promoters, potentially setting the stage for a flood of refund requests.

Under PayPal’s user agreement, the company reserves the right to hold funds and limit account access for up to 180 days if it detects unusual or fraudulent activity. CA, according to the MoneyMakerGroup post, now is urging members to use offshore processors.

CA, according to the MoneyMakerGroup post, said it had done nothing wrong — but pointed the finger of blame for the purported freeze at certain members who allegedly had “fraudulently misused their Club Asteria membership and PayPal accounts.”

MoneyMakerGroup member “10BucksUp,” who is promoting CA alongside “programs” known as JSS Tripler and Ad2Million amid claims that JSS and Ad2Million pay 60 percent a month, attributed the news of the PayPal freeze to Andrea Lucas, CA’s managing director.

“Last week PayPal has discontinued their services to our members due to no fault of Club Asteria,” the remarks attributed to Lucas read.

“Unfortunately their immediate action was to discontinue our services without further consideration and freeze all of the funds that our members had paid to Club Asteria via PayPal,” the remarks attributed to Lucas read.

The MoneyMakerGroup post suggests that CA withheld the PayPal news from members for a week while apparently still collecting fees from existing and incoming members through offshore processors such as AlertPay, CashX and Towah. The amount purportedly frozen by PayPal was not specified.

Regardless, the purported PayPal freeze “occurred when approximately 50 members fraudulently misused their Club Asteria membership and PayPal accounts and we asked PayPal for assistance in dealing with this issue,” the remarks attributed to Lucas read. “PayPal’s response to our request for help was to discontinue their service to us.”

When the ASAMonitor Ponzi scheme and criminals’ forum mysteriously shut down last fall, its website initially was set to redirect to CashX. Like the MoneyMakerGroup and TalkGold forums, ASA Monitor also is referenced in federal court filings as a place from which Ponzi schemes are promoted.

The current CA thread on MoneyMakerGroup consists of 200 pages; the current CA thread on TalkGold has 120 pages. The degree to which CA is being promoted on known Ponzi and huckster forums leads to questions about whether its revenue stream is polluted by fraud proceeds.

Whether CA reported the purported PayPal hijinks of its members to law enforcement was unclear. Also unclear was how CA apparently had arrived at the conclusion that “approximately 50” of its members had engaged in fraud.

What is clear, according to forum posts at MoneyMakerGroup and elsewhere, is that “earnings” from Club Asteria plunged to 0.66 percent this week in the aftermath of the purported PayPal freeze. Members of CA have claimed on the Ponzi boards in recent weeks that the company typically paid 3 percent to 4 percent a week. Members also have said that CA threatened to file lawsuits against some promoters.

Despite the purported dip to 0.66 percent, one MoneyMakerGroup member — “akledba” — speculated that CA would “give” 7 percent next week.

“Everything is intelligently calculated,” akledba ventured. He did not say whether his analysis was based on an examination of CA’s books or explain how he had arrived at the conclusion that next week’s payout would increase more than tenfold.

In any event, akledba noted that he was not worried.

“For me I have nothing to loose (sic) as I got the break even 3 months ago,” akledba wrote. “Thank God for the profit!”

Some CA members have published spreadsheets and earnings projections that claim CA pays up to 10 percent a week. Other members have said or implied that a simple monthly payment of $20 to Club Asteria is enough to elevate members out of poverty and create a cash cow that will pay $1,600 a month in less than two years.

An unidentified lawyer for CA was interacting with PayPal to restore services, according to the remarks attributed to Lucas. The remarks expressed disappointment at PayPal’s actions and noted that “[o]ur revenue this week has been severely affected and gone down substantially as a result of both our members and e-commerce clients not being able to purchase our goods and services by paying with PayPal.

“In fact,” the remarks attributed to Lucas continued, “many of their purchases had to be returned because payment could not be accepted.” The MoneyMakerGroup post did not specify how many purchases were reversed and the degree to which the reversals had affected CA’s cash flow.

Whether CA had a duty to inform prospects visiting its website about the purported PayPal freeze to aid them in making an informed decision about joining the “opportunity” was not addressed in the remarks attributed to Lucas.

Members have described Lucas as a former “chairman” and “vice president” of the World Bank. CA has been operating for about a year. The World Bank said in March that a person named Andrea Lucas last was employed by the institution in 1986, nearly 25 years ago. The bank described Lucas as a former department head.

Only members who signed off on the CA’s two-week-old “Code of Ethics and Conduct, Terms of Service and Policies and Procedures, have kept their subscription up to date and have read the [Club Asteria] News within the past 5 days, have participated in today’s revenue sharing,” the remarks concluded.

The remarks were dated May 12. The number of CA members who did not receive a payout this week was not disclosed. Some CA members have said the firm has more than 300,000 members and is surging toward 500,000.

If the claim on the notorious MoneyMakerGroup board is true, it may mean that CA is unable to access PayPal funds, accept incoming payments for purchases through PayPal or send money via PayPal. The PP Blog reported on April 4 that legions of CA members were promoting the program as a “passive” investment opportunity. Such promos raise a question about whether CA and its affiliates are selling unregistered securities as investment contracts.

In bizarre promotions for CA, many members have preemptively claimed that the firm is not operating a Ponzi scheme.

On May 1, the Blog reported that a YouTube video promoting CA encouraged members to fund their accounts with PayPal. The text portion of the YouTube promo asserted that CA pays members “$400 USD EVERY WEEK,” and the video portion appears to have violated the copyright of Warner Music Group (WMG).

PayPal’s Acceptable Use Policy expressly bans items that “support pyramid or ponzi schemes, matrix programs, other ‘get rich quick’ schemes or certain multi-level marketing programs,” according to the policy.

PayPal customers that act as a money transmitter, sell stored value cards, securities and investment interests require preapproval from the processing giant, according to the policy. Although CA has insisted it is not in the investment business, thousands of its own members appear to disagree. Promos for the firm have claimed a $20 monthly payment turns into an annual income of more than $20,000 in less than two years — with the money doubling if there is a second account in a household.

One promo for CA viewed by the PP Blog this morning used two bullet points and the language of the investment trade to coach members and prospects:

• Invest only what you can afford to loose (sic).
• Don’t put all of your eggs in one basket.

Although the promo reproduced the information attributed to Lucas on the MoneyMakerGroup board, the promo appeared on a Blog separate website titled the “DoNothingMoney Blog.”

PayPal’s policy also bans purchases associated with “off-shore banking” and transactions that involve “currency exchanges.” CA members say their electronic “earnings” payouts bear the name of a Hong Kong entity and that CA is in the business of facilitating money exchanges. Virginia-based CA says on its website that its Terms of Service “are governed by the laws of Hong Kong.”