Ronald Williams, 48, was an inmate in various prisons in New York state between 2006 and 2010, federal prosecutors said.
His mother told the Syracuse Post-Standard that her son was jailed in 2006 on charges of stealing a tractor-trailer full of “canned beans” off a street in Buffalo.
While incarcerated, Williams got the not-so-bright idea of filing false tax returns from prison, apparently after being influenced by a purported “sovereign citizen” website article attributed in part to “Obi-Wan Kenobi,” the newspaper reported.
Obi-Wan Kenobi, of course, is a fictional character from the Star Wars franchise.
Federal prosecutors now say Williams filed 11 false returns from prison, and assisted another prisoner in filing a bogus return.
In one instance, prosecutors said, Williams managed to dupe the IRS into sending him a refund of $327,456.04 to his prison address. The check was intercepted by the prison and returned to the IRS.
Williams, who “never actually received any monies,” also engaged in redemption scams in which he fabricated “withholdings on numerous Forms 1099-OID by claiming false withholding credits,” prosecutors said. “The eleven returns were for payment of refunds of taxes totaling $890,000,000.”
(See a PP Blog story about a different redemption scam, this one operating from Washington state and allegedly involving purported “sovereign citizen” John Lloyd Kirk, who once was imprisoned for possessing a pipe bomb.)
A jury convicted Williams last week on all 12 counts filed against him, the office of U.S. Attorney Richard S. Hartunian of the Northern District of New York said.
“The object of these schemes is to defraud the government and the taxpaying public,” said Victor W. Lessoff, acting special agent in charge of the IRS Criminal Investigations Unit. “Although a check was computer generated in this case, immediate action was taken as soon as it was identified by IRS Criminal Investigation and those involved in this scheme were vigorously prosecuted.”
A week after CONSOB, the Italian securities regulator, announced it was opening a probe into the activities of JSS Tripler promoters amid claims the absurd “program” advertised returns that would make Bernard Madoff blush, a new “press release” ignores the CONSOB development, calls participants “investors” (eight times) and suggests the U.S. government has approved the JSS Tripler “program.”
The issues in the Italian probe are whether JSS Tripler and promoters are selling unregistered securities as investment contracts unlawfully as part of a multilevel online scheme that offers preposterous returns that compute to an annualized rate of 730 percent — with compounding “bonuses” and two-tier downline commissions totaling 15 percent on top of the advertised returns.
Madoff, jailed for 150 years in the aftermath of the collapse of his massive Ponzi scheme, generally offered annualized returns between 48 and 73 times lower than the advertised JSS Tripler returns.
Dated today, the “press release” appears to have been issued by a JSS Tripler affiliate and is available through Google News. The release does not mention the week-old CONSOB probe. Nor does it identify either the affiliate or the purported company as individuals or entities authorized in any jurisdiction to sell securities.
Moreover, the release does not seek to qualify customers in any way. The only apparent customer qualification is access to a bank or payment account to send money to JSS Tripler and wait for ludicrous profits in return.
A Patent Absurdity
“Thousands of high return programs on the internet have been created for people who want to work from home,” the release begins. “However, the majority of these fast money work home (sic) programs are not sustainable. Frederick Mann solved this problem with his recently US patented system JustBeenPaid! and its subprogram JSS Tripler.”
“JustBeenPaid” (JBP), an exceptionally murky entity, is the purported operator of JSS Tripler. Frederick Mann, JBP’s purported operator, once advertised that he was a promoter for AdSurfDaily, which the U.S. Secret Service has described as an online Ponzi scheme involving at least $110 million.
JBP itself is advertising a U.S. patent, a specious and hollow claim. Regardless of whether a patent exists as part of JBP’s purported software platform, the U.S. Patent and Trademark Office does not regulate securities markets or approve the issuance of securities.
Those responsibilities rest with the world’s securities-regulatory bodies, including — for just two examples — CONSOB in Italy and the SEC in the United States. Virtually all developed countries have such regulatory bodies. In the United States and Canada, individual states and provinces also have regulatory responsibility over securities.
Scams routinely make specious claims and divine a connection to government as a means of disarming doubting prospects. The relatively new “patent” claim in the context of JSS Tripler, however, could be a sign that the “program” is becoming increasingly desperate to raise cash and has dialed up its deception to achieve that end.
The nationality of the press-release author was not immediately clear. But he is using a Google Gmail address and appears also to be presenting the release in U.S. English, based on the spelling of the word “program” (as opposed to the chiefly British “programme”) and certain elements of punctuation associated with U.S. English.
The release, which is accessible from the United States, has five embedded JustBeenPaid affiliate links, each of which rotates to a pitch page with a signup prompt page that asks investors to register using a Gmail address.
Among the incongruities about JBP/JSS Tripler is that the purported opportunity continued to solicit customers to register with Gmail addresses — even after Google-owned YouTube deleted promos for the “opportunity” last year.
“No sweat, I own over 500 Youtube accounts, so I’ll just keep making videos like normal, plus I can always use Viddler and Windows movie maker and facebook video as well,” MoneyMakerGroup poster “gtprosperity” claimed.
Apparently oblivious to the CONSOB probe, the serious concerns about the unlawful sale of securities and the bizarre JBP/JSS Tripler developments over many months, the author of the news release asserts that the “program currently has over 125,000 members, and over 2,000 new investors join each day.
“Investors can earn a 2 percent daily, with over 60 percent earned in a month,” the release claims. “Investors earn 2 percent daily on each position they purchase. New positions can be bought with money or earnings. Daily earnings can also be cashed out by sending them to one’s JSS account for withdrawal. Withdrawals take 24 hours to process.”
“Work Home Fast Money Making System To Earn Extra Income Recently US Patented,” the release headline reads.
Among the potential problems with the claim is that it likely demonstrates that JBP/JSS Tripler is selling unregistered securities as investment contacts to U.S. citizens — even as it is doing the same thing in Italy and other countries.
“I dont care what the CONSOB or whatever says because I am not an Italian.” — TalkGold poster known as “WallStreetIsAPonzi,” Jan. 28, 2012
Even as CONSOB, the Italian securities regulator, is publishing an announcement on its website that promoters of a bizarre HYIP known as JSS Tripler are under investigation amid preposterous claims that investors receive an annualized return of 730 percent, promoters on Ponzi forums such as MoneyMakerGroup and TalkGold are thumbing their noses at the news.
JSS Tripler is an arm of “program” known as “JustBeenPaid” (JBP). Whether JBP plans to assist any of the companies or individuals identified in the CONSOB announcement in navigating the regulatory waters and preparing a defense in the weeks ahead is unclear.
What is clear is that some JBP promoters are reacting to the news by posting fresh “I got paid” posts on the Ponzi boards, even as JBP continues to use its website to advertise returns of “2%+ per Day” and “60% per Month!”
Visitors are advised they can “Increase Earnings with Daily Compounding” and glean affiliate “bonuses” totaling 15 percent over two tiers — on top of the annualized returns of 730 percent.
In the AdSurfDaily Ponzi case in 2008, U.S. District Judge Rosemary Collyer described “a confluence [of ASD] payment schemes” very similar to the payment schemes purportedly in place at JBP. JBP, though, is advertising a return rate double that of ASD, whose operator, Andy Bowdoin, later was arrested on charges of wire fraud, securities fraud and selling unregistered securities.
Bowdoin faces up to 125 years in federal prison and fines in the millions of dollars, if convicted on all counts.
In her 2008 ruling in the ASD case in which she refused to release money seized by the U.S. Secret Service as part of an international Ponzi probe, Collyer noted that ASD called its payouts to members “rebates.”
Separately, documents from Canadian investigators show that the word “rebates” was used in international scams, including Flat Electronic Data Interchange (FEDI) and the mysterious “Alpha Project.” At least one FEDI promoter is jailed in the United States, as is FEDI operator Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,” who was convicted on charges of operating an investment-fraud scheme and financing terror.
At MoneyMakerGroup yesterday — on the heels of the CONSOB news — a poster published seven purportedly recent payment proofs from JSS Tripler. Each of them used the word “rebate,” demonstrating that the purported opportunity also is using the same language as ASD and FEDI to describe payouts to members.
The MoneyMakerGroup member said he planned to buy a “motor home” and “start traveling the US” with his JSS Tripler money.
In the AdSurfDaily Ponzi case, several automobiles were seized as the alleged proceeds of a criminal scheme. A boat and marine equipment also were seized, along with computers and real estate valued at more than $1 million. All in all, the cash seizures to date in the ASD case total more than $80 million, including cash seized from individual promoters in at least four U.S. states.
U.S. federal prosecutors say that ASD in part tried to mask its $110 million Ponzi scheme by calling its payments to members "rebates." JSS Tripler, an arm of a "program" known as "JustBeenPaid," also refers to its payouts to members as a "rebate," according to this post yesterday at the MoneyMakerGroup Ponzi forum.
Although Frederick Mann, the purported operator of JBP/JSS Tripler, is described by supporters as a business genius and creator of a “masterpiece,” the program is using the same sort of language and bizarre presentations that drew the attention of law enforcement in the ASD and FEDI cases.
Elsewhere on MoneyMakerGroup, a member described the CONSOB development as “NONSENSE!”
Another member observed yesterday that JBP payouts came from an email address on a domain styled BigBooster.com. Why the payouts are associated with the BigBooster domain is unclear, but the BigBooster domain previously has been linked to the alleged ASD Ponzi scheme and Frederick Mann, the purported operator of JBP/JSS Tripler.
Separately, the TalkGold forum deleted a link to a PP Blog report on the CONSOB action. In the ASD case, a forum known as “Surf’s Up” routinely deleted links to the PP Blog. ASD members who relied on the Blog for information were described on the forum as troublemakers, and posters willing to consider the government’s point of view were described as “rats,” “maggots” and “cockroaches.”
ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming was arrested by the FBI in November 2011 on charges of filing bogus liens against at least five public officials involved in the ASD case, including a federal judge, three federal prosecutors and an active-duty agent of the U.S. Secret Service who did some of the early legwork in the case.
The Secret Service employed undercover operatives in bringing the ASD prosecution.
One MoneyMakerGroup poster yesterday suggested that the CONSOB action was “crap” and claimed outright that JSS Tripler had “paid out over 10 million bucks.”
Whether the poster ever had seen the verified, audited books of JBP/JSS Tripler and other financial records such as bank and payment-processor statements to substantiate his claim is unclear. But even if the $10 million claim is true, the claimed sum was not broken down by recipient — and online scams are infamous for siphoning cash and concentrating it in the pockets of program sponsors and insiders.
Promoters of fraud schemes often pass along company lies and deceptions to recruits and prospects, a situation that U.S. government agencies, including the Secret Service, the SEC and the CFTC, have noted in prosecutions involving individual, commission-based promoters.
The same MoneyMakerGroup promoter also ventured the CONSOB action came because “governments are not getting a cut of this revenue,” further asserting that “the only reason they are starting to do probes and crap (sic) not because they care about protecting you from loosing (sic) your money.”
ASD members made similar claims. Like JBP/JSS Tripler, ASD also was promoted on the Ponzi boards — as were at least three purported ASD clones, all of which have ceased to operate. The cost to investors is unknown.
Like ASD, JSS Tripler also appears to have a clone — one that actually uses JSS Tripler’s name to form its own name. That “program,” known as JSS Triper 2 or T2, appears now to be changing its name to T2MoneyKlub. Regardless of the name, T2 also was hawked on the Ponzi boards and appears even to have given birth to itself on a Ponzi board as a result of a dispute with JBP/JSS Tripler.
Federal prosecutors said ASD also changed its name, morphing from just plain AdSurfDaily into ASD Cash Generator. Court records suggest that changing names was part of ASD’s criminal plan and that the change occurred after the initial ASD Ponzi collapsed and after certain payment conduits began to come under government scrutiny.
Among the MoneyMakerGroup posters who published “I got paid” posts for JBP/JSS Tripler yesterday was “10BucksUp” — his second such post since the CONSOB action became public.
“10BuckUp” previously pushed Club Asteria, anotherPonzi-forum darling that came under CONSOB scrutiny. In addition to displaying no apparent respect for CONSOB, “10BucksUp” let it be known in September 2011 that he also was a pitchman for Cherry Shares, a collapsed program referenced in June by Canadian regulators.
Cherry Shares also was a Ponzi-forum darling.
Whether “10BucksUp” and other JBP/JSS Tripler promoters planned to tell their existing recruits and prospects about the fact CONSOB is targeting individual promoters in a 90-day suspension order related to the purported JBP/JSS Tripler program is unclear.
Also unclear is whether JBP/JSS Tripler will inform existing participants and prospects about the CONSOB action.
Members of any “opportunity” that purports to pay an absurd return always are at great risk. The risk becomes even greater if they are denied information about investigations. Promoters who do not disclose the presence of an investigation or simply rely on the company line (or lack thereof) potentially are at greater risk of prosecution as individual promoters.
In the ASD case, for instance, federal prosecutors said the company was collecting money from new members and funneling it to original members affected by ASD’s first collapsed Ponzi — without informing new enlistees and prospects that their money was being used to prop up losers from the initial scheme and to help the second Ponzi gain a head of steam.
The personal assets of a number of individual ASD promoters were targeted in forfeiture actions or affidavits, with the government seizing sums in several bank accounts in multiple U.S. states. These sums totaled in the hundreds of thousands of dollars, according to court records.
Our donation post this month was in this editorial, which doubled as our 1,500th post.
The post resulted in one contribution from a reader. We are short of where we need to be heading into February. A key service bill for $100 is coming due, and there is no money to pay it. Once again the Blog is at the edge of an abyss.
It is our hope that out readers will be able to provide a minimum of $100 within the next 24 hours. It is the bare minimum we need to keep publishing in February and does not take into account other expenses, including core necessities.
BULLETIN:Timothy Shawn Donavan, one of two federal fugitives from Arkansas found in Washington state Nov. 22 with AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming, is back in jail.
Separately, records show that Leaming’s Washington state firm was the registered agent for two defunct companies linked to the alleged Donavan mail-fraud scheme and that Leaming himself — using the name “Kenneth Wayne” and dropping his surname — was an officer in the companies.
U.S. District Judge P.K. Holmes III revoked Donavan’s bond after Donavan, 63, refused to be sworn at a court proceeding in Arkansas earlier this month in violation of a bond condition that required him to cooperate at pretrial hearings in the mail-fraud case filed against Donavan in February 2011.
Meanwhile, Donavan’s co-defendant in the mail-fraud case, Sharon Jeannette Henningsen, also is listed as back in federal custody. The circumstances surrounding her renewed detention were not immediately clear.
Henningsen, 67, also was found with Leaming in the Pacific Northwest, federal prosecutors said in November. Donavan and Henningsen were participants in an Arkansas-based fraud involving envelope-stuffing, according to an indictment filed in February 2011.
Donavan and Henningsen were freed on conditional bond several days after their arrests in Washington state. They returned to Arkansas, and trouble begun anew in very short order, according to court records.
In the order revoking Donavan’s bond, Holmes said that Donavan “continues to insist, as he has in past proceedings, on repeating incomprehensible legal jargon in response to any question the Court posits, instead of cooperating with Court proceedings and responding appropriately to questions asked. Donavan ultimately refused to either swear or affirm to tell the truth during the proceedings.”
The judge warned Donavan that he’d be taken into custody by U.S. Marshals if he refused to cooperate, according to the order revoking bond.
On Jan. 23, Holmes ordered Donavan to be transported to a Bureau of Prisons medical facility in Texas, according to records.
On Dec. 28, Donavan and Henningsen filed a strange pleading styled “NOTICE of Tender for Setoff and a Request Regarding a Statement of Account by Sharon Jeannette Henningsen and Timothy Shawn Donavan.”
The Dec. 28 pleading was filed on the heels of other strange pleadings, including one styled,”Notice: Forgive Me Request; Constructive Notice of Conditional Acceptance and Request to Continue Public Proceedings.”
Although Donavan and Henningsen had been scheduled to go on trial Jan. 19, the trial date has been canceled — and prosecutors have filed a superseding indictment against both defendants that adds at least four mail-fraud-related counts to the 15 originally filed 11 months ago.
In the new allegations, federal prosecutors referenced two defunct Washington state companies — 1st Incentive Co. and Trail Head Options Inc. — allegedly tied to the Arkansas fraud of Donavan and Henningsen.
Both firms, according to records in Washington state, listed Leaming’s firm — American International Business Law Inc. — as their registered agent. Leaming, who sometimes drops his surname and uses simply “Kenneth Wayne,” is listed as an officer of both companies.
Prosecutors said the Donavan/Henningsen mail-fraud scheme netted more than $2.2 million.
Leaming, 56, of Spanaway, Wash., was arrested in November on charges of filing bogus liens against at least five public officials involved in the ASD case. The U.S. Secret Service said ASD was a Florida-based Ponzi scheme that gathered at least $110 million.
ASD President Andy Bowdoin, 77, was charged with wire fraud, securities fraud and selling unregistered securities in 2010.
Some ASD members reportedly relied on Leaming for legal advice, even though he is not an attorney. Whether Dovavan and Henningsen did the same thing is unclear. Also unclear is whether they were ASD members.
Leaming is jailed near Seattle. He is not named a defendant in the Arkansas case, but the indictment refers to at least one “unindicted co-conspirator.”
URGENT >> BULLETIN >> MOVING: Your time soon may be up if you’re flogging the absurd HYIP known as JSS Tripler.
CONSOB, the Italian securities regulator, has opened a probe into the activities of multiple promoters amid concerns the purported “program” is being offered to Italian citizens unlawfully as a security. JSS Tripler is an arm of “JustBeenPaid,” a Ponzi-forum darling that has been serving up a heavy dose of the bizarre for months.
The agency has issued a 90-day suspension order.
Details of the CONSOB probe and the precise number of investigative targets were not immediately clear to the PP Blog, owing to the lack of a quality Italian-to-English translation. But the websites of multiple entities or individuals who appear to be JSS Tripler affiliates are referenced by CONSOB in a 90-day order dated Jan. 20 and made public Jan. 23.
JSS Tripler’s name also is referenced in the order.
If a JSS Tripler-related domain cited in the translation is accurate, the domain appears to be hosted in the United States.
Among the bizarre claims associated with JSS Tripler promoters were that the company was moving to “offshore” servers and performing a restart.
Some JSS Tripler affiliates identify Frederick Mann as the honcho-in-chief. In May 2008, Mann positioned ASD as a “cash cow,” claiming he pocketed $6,000, according to records. Last year, the purported JustBeenPaid “opportunity” was trading on celebrity names such as Warren Buffett, Oprah Winfrey — and even fictional space man “Mr. Spock.”
Here is the CONSOB announcement — via an English translation by Google Translate.
Another “program” apparently named “System Explosion” also is referenced in the CONSOB suspension order. The domain for that program, which appears to be an HYIP or arbitrage program of some sort, also appears to be hosted in the United States.
Among the payment processors listed on the JSS Tripler-related domain and the System Explosion domain are AlertPay, SolidTrustPay and LibertyReserve.
An ad for JustBeenPaid appears on the SystemExplosion domain. When clicked, it appears to route to a subdomain of the JustBeenPaid domain, which beams this bizarre and vacuous message:
“JustBeenPaid! (JBP) and Its (sic) related programs are Licenced (sic) under United States Patent 6,578,010.”
The U.S. Patent and Trademark Office, however, is not the agency that regulates securities programs and purported business opportunities, even if JustBeenPaid could demonstrate that some sort of patent exists. As a practical matter, it is virtually impossible to conceive that market regulators in any country could be thwarted from opening probes based on claims that a system was patented.
If anything, such a claim in the context of programs that purport to pay a return may only intensify regulatory scrutiny. CONSOB, for instance, referenced JSS Tripler’s purported returns of 2 percent a day.
JSS Tripler is not to be confused with JSS Tripler 2 (T2), an equally bizarre “program” that appears to be a knockoff on the name of JustBeenPaid’s JSS Tripler arm. T2 also uses AlertPay.
Like JSS Tripler, T2 also was promoted on Ponzi forums such as TalkGold and MoneyMakerGroup.
“Investors who suspect that their email account has been hacked should immediately notify their brokerage firm and other financial institutions, and anyone who suspects they have been defrauded should file a complaint with FINRA.” — Gerri Walsh, vice president for Investor Education, Financial Industry Regulatory Authority, Jan. 26, 2012
The Financial Industry Regulatory Authority (FINRA) yesterday issued an alert and regulatory notice, saying that it “has received an increasing number of reports involving investor funds being stolen by fraudsters who first gain access to the investor’s email account and then email instructions to the firm to transfer money out of the brokerage account.”
FINRA’s announcement occurred on the same day the SEC charged that a 34-year-old Latvian trader “broke into” customers’ brokerage accounts between June 2009 and August 2010 and made trades to manipulate the prices of stock he owned to create a personal windfall while causing losses to customers and broker-dealers.
In just one 32-minute period on Oct. 26, 2009, Igors Nagaicevs “generated more $14,000 in illegal profits” by twice taking a position a NYSE-listed security, driving up the stock price by purchasing shares through a hacked account and then “liquidating his position at a profit.”
All in all, Nagaicevs repeated his fraudulent scheme 159 times over 14 months, manipulating the prices of “104 different NYSE and Nasdaq securities” and pocketing more than $850,000 in illegal profits, the SEC charged.
Nagaicevs, in effect, caused his hacking targets to lose at least $2 million while passing the bill for the losses to broker-dealer firms, which reimbursed the affected customers, according to the SEC complaint in federal court.
FINRA did not reference Nagaicevs in its alert yesterday, but warned that email intrusions were on the rise.
“In some instances, the perpetrators appear to have obtained customers’ brokerage information by accessing customers’ email accounts and searching contact lists or emails sent from the account,” FINRA cautioned in its regulatory notice.
After breaching the email accounts, FINRA said, the scammers typically “email brokerage firms from customers’ personal email accounts with instructions to wire funds to an account, often overseas, controlled by the perpetrator.”
Document forgeries may follow the initial email chicanery, FINRA said.
“The instructions may be accompanied or followed by fraudulent letters of authorization also emailed from compromised email accounts. In some instances, firms have released funds after unsuccessfully attempting to verify emailed instructions by phone. In at least one case, the fraudulent email stressed the urgency of the requested transfer, pressuring the firm to release the funds before verifying the authenticity of the emailed instructions.”
Read a new alert from the FBI, the Financial Services Information Sharing and Analysis Center (FS-ISAC) and the Internet Crime Complaint Center (IC3) that warns that scammers are using devious email plots to siphon cash from “banks, broker/dealers, credit unions and other institutions.”
NOTE: If you follow the criminal madness on the various Ponzi-scheme boards, you’ll notice that the new alert from the FBI, FS-ISAC and IC3 cites the type of scam-talk frequently seen on the huckster forums.
An outtake from the alert (emphasis added):
“The excuse is typically based on an illness or death in the family which prevents the account holder from conducting business as usual.”
URGENT >> BULLETIN >> MOVING: In a case that raises grave security concerns, the SEC has gone to federal court in San Francisco, alleging that a 34-year-old Latvian trader who held positions in multiple stocks “hijacked” the online accounts of customers at large broker-dealers and made trades in the accounts to manipulate prices and pocket the profits.
Igors Nagaicevs “broke into” the accounts “on more than 150 occasions over the course of 14 months,” the SEC charged, saying the hacking scheme caused more than $2 million in damages and reaped more than $850,000 in illegal profits for the accused fraudster.
“Nagaicevs conducted those unauthorized trades to manipulate the prices of stocks in which he already held a position through one of at least eight unregistered trading firms where Nagaicevs was an authorized trader,” the SEC charged. “The scheme enabled Nagaicevs to consistently derive quick trading profits, even if he manipulated the price of the security by only a small amount.”
A top SEC official described the scheme as massive in terms of its destructive power.
“Nagaicevs engaged in a brazen and systematic securities fraud, repeatedly raiding brokerage accounts and causing massive damages to innocent investors and their brokerage firms,” said Marc J. Fagel, director of the SEC’s San Francisco Regional Office.
The SEC said it also brought administrative proceedings today against four electronic trading firms and eight executives amid allegations they enabled the fraud “by allowing [Nagaicevs] anonymous and unfiltered access to the U.S. markets.”
“These firms provided unfettered access to trade in the U.S. securities markets on an essentially anonymous basis,” said Daniel M. Hawke, chief of the SEC’s Market Abuse Unit. “By failing to register as brokers, the firms and principals in this case exposed U.S. markets to real harm by evading crucial safeguards of the federal securities laws. We will not allow firms like these to fly under the radar and become safe havens for market abuse.”
President Obama raised the issue of international piracy in last night's State of The Union address to the U.S. Congress.
Speaking to the nation in his State of the Union address to Congress, President Obama last night referenced U.S. efforts to combat piracy. Although the remarks were in the context of battling knock-off goods that infringe trademarks and affect American manufacturing jobs, Obama delivered the message just days after the Justice Department brought racketeering and copyright-conspiracy charges in the Megaupload international piracy case — and the hacker’s group “Anonymous” retaliated by bringing DDoS attacks against government and other sites.
Megaupload principal Kim Dotcom yesterday was denied bail in New Zealand, the country in which he was arrested on U.S. charges that Megauplaod had amassed at least $175 million through international web piracy.
Obama referred to neither the Megaupload case nor the follow-up DDoS attacks. But the President did signal that the United States would not stand by idly and submit to the whims of pirates who seek to hide behind international borders and gorge themselves on profits derived from U.S. ingenuity.
“It’s not right when another country lets our movies, music, and software be pirated,” the President said.
Megaupload and related entities operated websites that caused at least $500 million in economic harm to U.S. companies by unlawfully reproducing and distributing “infringing copies of copyrighted works, including movies – often before their theatrical release – music, television programs, electronic books, and business and entertainment software on a massive scale,” the Justice Department said last week.
“The conspirators’ content hosting site, Megaupload.com, is advertised as having more than one billion visits to the site, more than 150 million registered users, 50 million daily visitors and accounting for four percent of the total traffic on the Internet,” the Justice Department said.
Law enforcement last week executed 20 search warrants in eight countries, including the United States. At least $50 million in assets and 18 domain names were seized, and servers in Canada, the Netherlands and the United States were targeted by investigators to freeze the fraud in its tracks, the Justice Department said.
Obama also signaled that his administration’s overall fraud crackdown will continue and the the United States would dial up efforts to bring financial criminals to justice. Congress, he said, should stiffen fraud penalties.
“We’ll also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people’s investments,” Obama said. “Some financial firms violate major anti-fraud laws because there’s no real penalty for being a repeat offender. That’s bad for consumers, and it’s bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count.
“And tonight, I’m asking my Attorney General to create a special unit of federal prosecutors and leading state attorney[s] general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis,” the President continued. “This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”
The word “fraud” appeared four times in a White House transcript of Obama’s speech. It did not appear at all in the Republican response, which was delivered by Indiana Gov. Mitch Daniels and questioned where the United States would get the money to pay for programs in an era of runaway budget deficits.
The government does too much meddling in business and engages in unrestrained spending, Daniels suggested.
“In three short years, an unprecedented explosion of spending, with borrowed money, has added trillions to an already unaffordable national debt. And yet the president has put us on a course to make it radically worse in the years ahead,” Daniels said, according to a CNN transcript.
“In word and deed, the president and his allies tell us that we just cannot handle ourselves in this complex, perilous world without their benevolent protection,” Daniels said. “Left to ourselves, we might pick the wrong health insurance, the wrong mortgage, the wrong school for our kids; why, unless they stop us, we might pick the wrong light bulb.
“A second view, which I’ll admit some Republicans also seem to hold, is that we Americans are no longer up to the job of self-government. We can’t do the simple math that proves the unaffordability of today’s safety net programs, or all the government we now have. We will fall for the con job that says we can just plow ahead and someone else will pick up the tab. We will allow ourselves to be pitted one against the other, blaming our neighbor for troubles worldwide trends or our own government has caused.”
A highlight of last night’s State of the Union address was an emotional appearance by Rep. Gabrielle Giffords in the House Chamber. Giffords was shot in an assassination attempt a year ago. Still in the process of recovering from her wounds at the hands of a deranged man with a gun, she is leaving the Congress.
U.S. District Judge John Roll was killed in the same attack, as were a nine-year-old girl, three senior citizens in their seventies and a 30-year-old Congressional aide engaged to be married.
Both sides agree that Giffords, who is married to an astronaut, is an American hero whose courage has set an example for all. Both sides also agree that politics in the United States has become polarizing
What neither side appears to agree on is how best to address polarization, kickstart the economy, regulate the U.S. markets and equip agencies to meet modern challenges, including the unique challenges of the Internet age.
Veteran Ponzi-board huckster “strosdegoz,” also known as “manolo,” now is flogging a new “program” known as “Huge Yield.” There already is an unconfirmed report that HugeYield has suffered a DDoS attack.
“strosdegoz” emerged last year as a regular shill for Club Asteria, the purported Virginia-based program that became a Ponzi-forum darling and later announced its PayPal account had been suspended. Claims about ClubAsteria came under investigation by CONSOB, the Italian securities regulator, and the American Red Cross later clashed with the purported “program,” which traded on the name of the relief agency.
As time moved on, “strosdegoz” later joined accused Ponzi schemer Andy Bowdoin of AdSurfDaily in flogging a mysterious “program” known as “OneX.” There is a report today that Bowdoin either canceled or postponed his latest OneX pitch because a fellow pitchman identified as “Alan” has “pneumonia and is not able to do anything right now.”
The pneumonia announcement was attributed to an email sent by Bowdoin, who is accused of orchestrating an international Ponzi scheme involving at least $110 million through ASD. His criminal trial is set for September 2012.
Huge Yield purports that $120 can turn into $1,000. The following HugeYield claims are verbatim:
“A Traditional SPICED UP follow your sponsor 2×2 that will surprise anyone online TODAY! HugeYield has changed the way marketing a tradition 2×2 is done. We have added a safety net to ensure that all members progress through the program and make their ultimate goal, The $1000.00 Payout!”
In the website’s FAQs section, a question about what payment processors HugeYield accepts is answered in this verbatim fashion:
“We accepts payments and pays all commissions through Alertpay,liberty reserve and solid trust pay,perfect Money and Okpay.”
Whether “”strosdegoz/manolo” is concerned about HugeYield’s apparent lack of grammar and usage skills is unclear.
“strosdegoz/manolo” is pitching HugeYield on MoneyMakerGroup and TalkGold. In addition to ClubAsteria and OneX, he has pitched Centurion Wealth Circle and “The Tornado.”
Both MoneyMakerGroup and TalkGold are identified in federal court filings as places from which international Ponzi schemes are promoted.
BULLETIN: A new superseding indictment has been returned in federal court in Alaska against purported “sovereign citizens” and “militia” members Francis Schaeffer Cox, Coleman L. Barney and Lonnie G. Vernon.
In addition to the original charges outlined in an the first superseding indictment, the trio now is accused of conspiracy to kill federal officers and officials, according to the FBI.
Cox further is charged with soliciting Barney and Vernon to murder federal officers, the FBI said.
And Cox, 27, Barney, 36, and Vernon, 57, “are all charged with additional counts involving the carrying of firearms during a crime of violence,” the FBI said. “In addition to these charges, the indictment includes criminal forfeiture allegations relating to several seized firearms, silencers, and destructive devices.”
Cox allegedly has asserted courts have no authority over him. The superseding indictment alleges that Cox and his militia colleagues, despite their sovereign posturing and beliefs the government has no legitimate authority over them, apparently divined themselves the right to assert authority over private citizens.
Among other things, the indictment alleges that Cox had an armed security force and somehow persuaded himself that a federal “hit team” had been sent to Fairbanks to assassinate him, according to the indictment.
With Cox scheduled to make a television appearance in November 2010, Cox, Barney, Vernon and others “developed a tactical plan to provide security for COX,” according to the new indictment. “Part of the tactical plan included the wearing of body armor, the possession of hand grenades, arming with semi-automatic weapons, the possession of 37mm launchers loaded with Hornets Nest anti-personnel rounds along with the creation and implementation of a deadly force policy in the event the federal agents arrived to arrest or attempt to kill COX.”
On Nov. 23, 2010, according to the indictment, Barney, Vernon and others “established a tactical and armed perimeter security force of militia members around COX while COX was doing the television interview,” according to the indictment. “This perimeter security force, among other things, trespassed on the private property of local citizenry while ‘patrolling’ on COX’s behalf, constructed a vehicular funneling point in order to stop and inspect the vehicles and identities of private citizens, and did, in fact, stop private citizens without lawful authority and under the force of arms.”
The armed security detail asked citizens “for names and identification and prevented citizens from traveling either to their place of employment or their own private residences,” according to the indictment.
While stopping citizens, Barney had “a semi-automatic assault rifle, an AR-15 .223 rifle,” according to the indictment..
Attached to the “rail mount” of the semi-automatic rifle “was a 37mm launcher,” according to the indictment. “Loaded inside the 37 mm launcher was a ‘Hornets Nest’ anti-personnel round.”
For his part, Vernon had “a semi-automatic assault rifle, a Sig Arms AR-15 .223 rifle,” according to the indictment.
Also in November 2010 — apparently after divining himself the right to use armed guards to interrupt the free travel of private citizens — Cox paid for 16,000 newspaper ads, according to the indictment.
Here is how the ads read:
“The laws of The Judiciary appear to have been fraudulently displaced by a privately owned for profit corporation deceptively named the ‘Alaska Court System.’ This corporation and the Alaska Bar Association are under criminal investigation. If you have had a case decided without full disclosure of the true nature of the ‘Alaska Court System’ the damages can be corrected. Judgments can be overturned and you may be entitled to restitution! A public meeting to explain the process in simple laymen’s terms will be held at the CARLSON CENTER ON DECEMBER 1, AT 6:30 PM . . .”
This one is almost indescribably bizarre . . .
