Authorities In Virginia Neither ‘Confirm [N]or Deny’ That Investigation Into Club Asteria Is Under Way; Firm Whose Growth Was Fueled On Ponzi Boards Before Cashout Suspension And CONSOB Probe Is Not Registered To Sell Securities In The State

Screen shot: The logo of Asteria Philanthropic Foundation, which also has been described as the Asteria Foundation. The foundation, according to its website, is an offshoot of Club Asteria, which described itself in June as a "cause" marketing company.

UPDATED 4:14 P.M. EDT (U.S.A.) Club Asteria, the offshoot of Virginia-based Asteria Corp. and the apparent braintrust behind an emerging entity known as the Asteria Philanthropic Foundation, is not registered to sell securities in Virginia, the state said Thursday.

Neither is Asteria Corp., according to state records.

Citing confidentiality laws, the state declined to say Friday whether it was aware that CONSOB, the Italian Securities regulator, had opened a probe into Club Asteria-related matters earlier this year. The state also declined to say whether it had launched its own Club Asteria probe.

“We cannot confirm or deny that an investigation is being conducted due to the prohibitions in Section 13.1-518 of the Code of Virginia,” said Katha Treanor, a spokeswoman for the State Corporation Commission (SCC). The commission oversees the Virginia Division of Securities & Retail Franchising.

Among other things, the statute cited by Treanor forbids the state from disclosing publicly whether a probe is under way while empowering it to issue subpoenas, compel attendance at hearings and share information with other law-enforcement agencies.

Club Asteria, which announced a cash crunch in June after it acknowledged in May that its PayPal account had been suspended, has described itself as a “cause” marketing company. A PowerPoint presentation for Club Asteria claimed the program offered a 25 percent “matching bonus,” along with”passive” income for Gold and Silver members that was “100% GUARANTEED.”

Ponzi forum promos for Club Asteria claimed payouts came via wire from a Hong Kong entity known  as Asteria Holdings Limited. Club Asteria, which claimed to be a revenue-sharing program, has traded on the name of the World Bank.

The news in Virginia developed as the General Counsel’s Office of the American Red Cross said it was opening a probe into the potential misuse of the Red Cross logo and name by the Asteria Philanthropic Foundation, which also is known as the Asteria Foundation and has issued at least one undated “press release” with a dateline of Reston, Va.

Andrea Lucas, Club Asteria’s managing member, was quoted in the release. Among the oddities in the release is that the foundation announced its launch “today” — without putting a date on the release. Visitors to the site could form the impression that “today” literally meant the day they visited the site, regardless of the day of the week.

Although the foundation has its own website at a .org domain and Club Asteria claimed in its October emagazine that the Red Cross was a “partner,” the Red Cross said Thursday that it had been unable “to confirm a [Club Asteria] link to the Red Cross.”

If that continues to hold true, Club Asteria will receive a cease-and-desist order, the Red Cross said, noting that individuals do not have to go through Club Asteria to donate to the Red Cross. Earlier this year, Club Asteria encouraged members to recruit more affiliates willing to pay Club Asteria a fee to enable the company to provide earthquake relief in Japan.

Last month, Club Asteria removed content from its emagazine that suggested that actor Will Smith had endorsed the purported business opportunity. Club Asteria did not explain why it had reconfigured the publication to remove Smith-related content. The removal occurred after the PP Blog sought comment from Smith’s publicist on whether the actor was aware his name and image were being used by Club Asteria.

In the October issue of Club Asteria’s emagazine, a button that leads to a registration page for Club Asteria was placed inside a quotation from Mahatma Gandhi. Gandhi, the slain Indian civil-rights champion, was assassinated in 1948. Club Asteria misspelled Gandhi’s name in the publication, which is the firm’s recruitment organ. The Red Cross logo appears both inside the publication and on the foundation’s .org site.

It was unclear yesterday whether the foundation, which uses a Hong Kong address in a passage on its .org domain and a fax number with a Virginia area code, was registered as a charitable entity in Virginia. Charitable entities in the state are overseen by the Virginia Office of Consumer Affairs, a branch of the Virginia Department of Agriculture and Consumer Services. (The PP Blog contacted the Office of Consumer Affairs on Friday to determine if the foundation is registered in Virginia, and expects to hear back Monday.)

Among the claims on the .org domain was that the foundation has “tax exempt” status with the IRS, but a database maintained by the IRS appears to have no listing either for the Asteria Philanthropic Foundation or the Asteria Foundation.

Records in Virginia show that two corporate business registrations for an entity known as Asteria Corp. were “terminated” — one on Nov. 2, 2009, another on May 4, 2010. The reasons behind the terminations and the registration details of the corporations were not immediately clear.

On May 31, 2010, Asteria Corp. — using the services of a law firm — sent a check for $325 to the state via overnight courier (FedEx). The fee included $100 for expedited service, and the registration as a business entity was restored on June 8, 2010, according to records.

Club Asteria was popularized in part by posts on Ponzi boards such as TalkGold and MoneyMakerGroup, both of which are listed in federal court filings as places from which Ponzi schemes are promoted. A TalkGold thread shows that the first promo for Club Asteria was posted on April 5, 2010. The thread, which has been moved to the TalkGold scams folder, ultimately grew to 139 pages — with 10 posts per page.

Meanwhile, on MoneyMakerGroup, the first Club Asteria post was dated May 29, 2010 — while Asteria Corp.’s corporate registration was listed as “terminated” in Virginia. That thread ultimately grew to 221 pages — with 15 posts per page.

Two days later — on May 31, 2010 — Asteria Corp. sent $325 to the state and asked for expedited service to restore the firm’s corporate registration.

Well-known Ponzi board hucksters such as “Ken Russo,” “10BucksUp” and “manolo” were among the Club Asteria cheerleaders. “Ken Russo” also is known as “DRdave.”

Scores of Club Asteria promoters described the program as a “passive” investment opportunity that paid out anywhere from 3 percent to 10 percent a week. Earnings were described as guaranteed, and some promoters lured recruits by offering to return a portion of their monthly fees. The Ponzi forum promos and pitches by Club Asteria members on Blogs and websites led to questions about whether Club Asteria was selling unregistered securities and whether the firm had come into receipt of proceeds tainted by other schemes pitched on the Ponzi boards.

CONSOB announced in May that it had blocked Club Asteria promos in Italy. Club Asteria acknowledged during the same month that its PayPal account had been suspended, blaming the development on members and later claiming it was experiencing a cash crunch.

Weekly payouts to members first were slashed, and later were eliminated. Ponzi forum promoters remained busy, turning their attention to other purported programs, some of which have collapsed or are in a classic state of Ponzi decay. One of the programs with members in common with Club Asteria — JustBeenPaid — claimed it was moving to “offshore” servers and forced members to affirm they were not government spies or media lackeys.

Frederick Mann, the purported braintrust behind JustBeenPaid, was a promoter for AdSurfDaily, the Florida firm the U.S. Secret Service said in 2008 was operating an international Ponzi scheme. JustBeenPaid is trading on the names of Warren Buffett and Oprah Winfrey — and even has an ad banner with an image of Mr. Spock,” the fictional spaceman from the Star Trek series.

Hank Needham, who appears in Club Asteria videos and has been described as an owner of the company, also was an AdSurfDaily promoter, according to a 2008 promo for ASD.