PatrickPretty.com

Day: August 29, 2012

  • BULLETIN: CFTC Says California Man At Helm Of Ponzi Scheme Targeted At Deaf Christians; Marc Perlman Charged With Fraud Amid Claim He Advised Investor To Sell House Quickly And Plow Proceeds Into Forex Scheme

    BULLETIN: The CFTC has gone to federal court in the Southern District of New York, alleging that Marc Perlman of Rancho Cucamonga, Calif., and his firm, iGlobal Strategic Management LLC, were running a commodity-pool and Forex Ponzi scheme targeted at deaf Christians.

    Perlman and the company have been charged with fraud. The CFTC said the scheme sucked in “at least $670,000 from at least 17 people.”

    In at least one instance, the CFTC charged, Perlman encouraged an investor “to sell a house at a price that would result in a quick sale, stating that the profits that the iGlobal Investor would earn with iGlobal would make up for the lost equity.”

    It is at least the third major fraud scheme targeted at the deaf community since 2009. In October 2010, the SEC charged an entity known as Imperia Invest IBC in a caper that sucked in millions of dollars and affected thousands of people with hearing impairments. In 2009, the FTC charged Affiliate Strategies Inc. (ASI) in a government-grants scam. The Noobing autosurf was in the ASI stable of companies, and promotions were targeted at the deaf.

    Both Imperia Invest and Noobing were promoted on the MoneyMakerGroup and TalkGold Ponzi forums — the same venues from which Ponzi schemes such as AdSurfDaily and alleged Ponzi schemes such as Zeek Rewards were promoted.

    “Perlman furthered his and iGlobal’s fraudulent scheme by playing upon the Christian faith of certain iGlobal investors, using claims about his own faith and references to scripture to obtain the trust of certain iGlobal investors,” the CFTC charged.

    Victims hailed from Arizona, California, Florida, Georgia, Michigan, Oregon, Utah, Washington and Pennsylvania, the CFTC said, noting that Perlman is deaf.

    “Perlman offered to have calls with certain potential iGlobal Investors through a video phone system that enables communication through sign language,” the CFTC charged. “During these calls, Perlman told certain potential iGlobal Investors that he was offering them the opportunity to invest in a forex investment system that would yield profits of 10 percent each month. He later revised this projected number to 5 percent after certain iGlobal Investors invested funds.”

    The U.K. Financial Services Authority assisted in the CFTC probe, CFTC said.

    Read the complaint.

  • ALERT >> ALERT >> ALERT: Judge Dismisses Lawsuit Filed Against United States By AdSurfDaily Figures Todd Disner And Dwight Owen Schweitzer, Later To Become Zeek Promoters

    BULLETIN: A federal judge has dismissed the November 2011 lawsuit against the United States by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer.

    The dismissal of the lawsuit by U.S. District Judge Rosemary Collyer came on the same day she sentenced confessed ASD Ponzi scheme operator Andy Bowdoin to 78 months in federal prison.

    After their ASD days, Disner and Schweitzer went on to become promoters of Zeek Rewards, which the SEC now describes as a $600 million Ponzi- and pyramid scheme. ASD was a $119 million Ponzi scheme.

    Disner reportedly now is involved in an effort to raise funds to sue the SEC for its role in the Zeek case. Disner and Schweitzer also raised funds to sue the government for its role in the ASD Ponzi case, but Collyer today dismissed their complaint.

    From Collyer’s order of dismissal in the case brought by Disner and Schweitzer, who alleged the seizure of their records on ASD’s database was unconstitutional (italics added).

    They allege that federal agents seized money, uncashed checks, unendorsed checks, books, computers, and other assets and records created and maintained by Plaintiffs in the computers and servers that were in the custody and control of ASD. Plaintiffs maintain that their information was encrypted and password protected. Specifically, Mr. Disner claims that he is owed $53,000 . . . On September 17, 2008, the Government returned to ASD the computers that it had seized . . . Mr. Schweitzer avers that he cannot remember where his checks/money orders were drawn, that he put $3,500 into ASD, and that he was involved with ASD for “only a few weeks before it was shut down.”

    Read the full ruling.

  • URGENT >> BULLETIN >> MOVING: AdSurfDaily Ponzi Schemer Andy Bowdoin Sentenced To 78 Months In Federal Prison — Maximum Under Plea Agreement

    Thomas A. "Andy" Bowdoin

    URGENT >> BULLETIN >> MOVING: (UPDATED 5:20 P.M ON SEPT 4.) AdSurfDaily President Andy Bowdoin has been sentenced to the maximum term in federal prison under his plea agreement: 78 months.

    The sentence was handed down minutes ago by U.S. District Judge Rosemary Collyer of the District of Columbia. ASD was a $119 million Ponzi scheme operating over the Internet between 2006 and 2008 and creating thousands of victims.

    Separately, Collyer issued an order that authorized the U.S. Department of Justice to reopen remissions, meaning that ASD victims who missed the January 2011 filing deadline will have an opportunity to gain a pro rata share of the remainder of ASD proceeds seized by the U.S. Secret Service in 2008.

    “Thomas Bowdoin was a master of fraud and deception, cheating victims out of their hard-earned money and savings with his get-rich scheme,” said U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. “His actions cost his victims millions of dollars and now they will cost him his freedom. This sentence will protect the public from Mr. Bowdoin’s scams and hold him accountable for his crimes.”

    A top U.S. Secret Service official said the agency is using a variety of tools to bring scammers to justice.

    “Capitalizing on the strength of our financial task force partnerships, we aggressively pursue criminals using computer experts, forensic specialists, investigative experts and intelligence analysts,” said Dennis Ramos Martinez, special agent in charge of the Orlando Secret Service office.

    Machen’s office declined to comment today on whether the ASD probe was ongoing.

    Bowdoin is 77.

    In November 2011, ASD figure Kenneth Wayne Leaming was arrested by the FBI on charges of filing false liens against at least five public officials involved in the ASD case. Two of the officials were federal prosecutors. One was the lead Secret Service investigator.

    Machen’s office — without referencing the FBI allegations against Leaming — today praised the work of former Assistant U.S. Attorneys William Cowden and Vasu B. Muthyala. And Machen’s office also praised U.S. Secret Service agent Roy Dotson. All three men allegedly were targeted with false liens from Leaming, a purported “sovereign citizen.”

    Leaming, 56, is jailed near Seattle.

    Bowdoin’s sentencing today occurred against the backdrop of the collapse of Zeek Rewards, which was accused by the SEC Aug. 17 of operating a $600 million Ponzi- and pyramid scheme that potentially affects more than 1 million people. Zeek’s business model was similar to ASD’s business model. The U.S. Secret Service also is investigating Zeek.

    Here’s what prosecutors in the District of Columbia said today about ASD’s business model (italics added):

    ASD’s business model promised members the opportunity to earn 125 percent (initially 150 percent) on each dollar paid into ASD, as long as the members viewed other members’ websites for a few minutes each day on ASD’s Internet page, commonly referred to as the ASD “rotator.” Bowdoin also promised members commissions for recruiting other members into the program.

    While a small percentage of ASD members who invested early in the program could earn the extraordinary rates of return, the promised opportunity was illusory for the vast majority of ASD members. Indeed, due to the fact that ASD’s pyramid-style business model relied entirely on an ever increasing influx of new money to fund the debt owed to earlier members, the vast majority of members could never earn the promised rates of return, making the promised opportunity fraudulent.

  • As Zeek Apologists Solicit Funds And Plant Seed They’ll Sue SEC, Guest Columnist Asks, ‘Whose Lawyer Is This Anyway?’

    DISCLOSURE: Gregg Evans, a longtime member of the antiscam community, is a longtime PP Blog contributor. He was not compensated for this column, and his views are not necessarily the views of the PP Blog.

    Whose Lawyer Is This Anyway?

    By Gregg Evans

    A group of Zeek Rewards’ affiliates claim they have retained SNR Denton to do, well, something about the SEC taking over Rex Venture Group, Zeek’s corporate parent. What they intend to do is a mystery at this time. You see, Rex Venture Group, and with it Zeek, is dead. Nothing left but the shell that is in possession of a court-appointed receiver.

    There can be no resurrection here: Paul Burks, the previous owner has turned the company over voluntarily to the receiver and, under the terms of the consent judgment, he cannot change his mind, he cannot appeal, he cannot argue that he didn’t violate securities laws and he can’t reboot the company under a different entity.

    Zeek is no more: All that’s left is to gather up all the money and distribute what’s left back to those that it was stolen from.

    The first problem with this is that not all that was stolen can be recovered, a part of it is going to be spent in the effort to return it and not everyone lost, which means some people won. Fairness, and by the way the law, says that those winners should have to return not only their ill-gotten gains, but in fact they should also return part of their original investment so that they proportionately bear the same loss rate as everyone involved.

    In short, if the average “investor” is only going to recover $30 of the $100 they sent in, why should someone who sent $10,000, and profited in the end, only have to return their net winnings? It’s only fair that they should in fact have to return all their profits, but also 70% of their contributions, so that they bear the same loss as everyone else. If you sent in $10,000 and didn’t take out a dime, I think you’ll see the logic there. If, on the other hand, you were among the early investors who made a sizable profit, you may think differently.

    Zeek presented in online pitch as “Passive Income!” opportunity.

    It was once claimed that some affiliates were “earning” over $1 million a month from Zeek. If you’re a big winner, you might be quietly hoping that the receiver isn’t going to try to get anything back from you and you might be thinking that if he does, you might be wise to get an attorney to do everything legally possible to prevent any of your “profits” being taken from you to be added to the pool of funds eventually refunded to the people who weren’t as lucky as you. Well and good. I don’t agree with you, but then again, I wasn’t getting a million dollars a month in Zeek “profit sharing.” You’re certainly entitled to the best legal talent you can pay for.

    Ah, but you’re too greedy to even accept that. No, you’re not going to use your own money to get that very pricey legal team working to keep you from losing money in the Ponzi scheme like almost all the others, you want the losers to contribute to a fund to pay your lawyers.

    That’s chutzpa, Sparky.

    The names so far mentioned as being behind this legal effort are hardly innocents. Among them are some names very familiar to those of us who follow online investment frauds, Ponzi schemes and MLM hucksters. These are the big recruiters. They pimped this scam, flaunted the money they were raking in, money that was ultimately stolen from their own downlines. Now they’ve cranked up their downlines, incited the victims and are shouting from the Internet hills about the injustice of the evil government shutting down their favorite scam, because, after all, it was still paying.

    Never mind the $3 billion deferred liability that Zeek Rewards had only $225 million to pay. Never mind that only 2% of Zeek’s revenue came from an actual business and that 98% of the money paid out in the end was coming from new money paid into the affiliates programs. (The very definition of a Ponzi scheme.)

    I’d venture you’d be a little less admiring of Paul Burks if the SEC, Secret Service and North Carolina Attorney General had not investigated this scam and it had collapsed of its own weight a few weeks or days later than the SEC action. There were signs that Zeek was in fact about to implode in the very near future anyway. Had that happened I’d expect a few of you would be raising complaints as to why the authorities had let the scam continue when they knew about it and had been investigating it. (Search “CMKX Scam” for an example of that.)

    But with apologies to Arlo Guthrie, that’s not what I’m here to talk about.

    I’m here to talk about your lawyers, and how you’re trying to get the people whose stolen money you have, to pay lawyers so you don’t have to give any of that stolen money back. First, you’re asking people to send the money to you, not to the lawyers. Second, you’re telling them to please not call the lawyers.

    This raises a few issues. To begin with, if the people involved lost money they can of course take advantage of the tax code to at least save on their taxes. They could also, if they retained counsel in relation to their business deduct that money, too. They cannot deduct any contribution they make to someone else’s legal bills.

    In order for them to be able to say they paid a lawyer in relation to a business expense, the IRS is pretty insistent that they paid lawyers, not paid someone else who paid a lawyer, especially when the lawyer in question won’t even take your calls. I’m not an attorney myself but I’m pretty certain that some ethical rule somewhere says you have to take calls from your client. Which brings us to another thing:

    Who is the client, and what is the client’s interest?

    In a solicitation letter published on the Internet, the people soliciting donations say that the law firm will only communicate with 12 people. Forgive me if I take that to mean that only those 12 people are formally the clients represented, and that means that the attorney’s in question MUST represent those 12 people and ONLY those 12 people, and any interest any other people may have that is against the clients are by default adversarial.

    So if, for instance, those 12 people were all net winners wishing to avoid a clawback action, hundreds of thousands of investors who lost would be the enemy, and by the tenets of the legal profession, said lawyers would be opposed to their interests in any conflict. There were early reports of over a million investors in Zeek Rewards. At a later news conference, the receiver said that number may well be over 2 million.

    Mathematically speaking a Ponzi scheme results in at least 88% of participants who are net losers, a percentage that rises the longer a scheme continues, so of the 2 million, 1,760,000 people are likely net losers here. But these lawyers are only looking out for the 12, who I’ll bet are all net winners.

    I’ll go out on a limb and say that all of them are big-time winners; at least one had a video posted showing off a new luxury home he implied was paid for with Zeek Reward profits. And they want the losers to pay for their lawyers, because after all, Zeek was still paying. There was over $225 million left in the till and if the evil government had just minded their business they could have gotten a pretty good chunk of that, too.

    So, am I wrong? I’m talking now to the 12 people who are allowed to call the lawyer, and to the lawyer, too for that matter. I think this is rotten to the core, but prove me wrong. Make public the retainer agreement between whoever the clients are and SNR Denton.

    If you’re good enough and shameless enough to get your victims to pay for your lawyers, good on you, but I think you owe it to the people you’re asking to pay for it to show them just exactly what they’re paying for, and whose interest is being represented here.

    Oh, and since you’re telling people to pay you, and not the lawyers, and since that means they can’t deduct it on their taxes, I ‘d like to offer my own opinion that any money you get is regular income as far as the IRS is concerned, and you’d better report every penny of it as such.