PatrickPretty.com

Day: January 27, 2012

  • BULLETIN: Fugitive Found With AdSurfDaily Figure Kenneth Wayne Leaming Back In Jail After Judge Revokes Bond; Timothy Shawn Donavan Refused To Be Sworn As Witness At Pretrial Hearing In Arkansas Mail-Fraud Case; Leaming’s Firm Listed As Registered Agent For 2 Companies Implicated In Alleged Multimillion-Dollar Envelope-Stuffing Fraud

    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: JSS Tripler Promoters Targeted By Italian Regulator CONSOB In Securities Probe

    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.

    Affiliates were required to affirm they were not government spies or media lackeys.

    JustBeenPaid is known to have promoters in common with ClubAsteria, a “program” that came under CONSOB’s lens last year. The purported opportunity also is known to have promoters in common with the alleged AdSurfDaily Ponzi scheme.

    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.

  • ALERT! On Heels Of SEC’s Complaint Against Alleged Latvian Hacker Accused Of Manipulating Stock Prices By Hijacking Brokerage Accounts, FINRA Warns Of Plots Targeting Email Accounts

    “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 the FINRA Alert.

    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.”