PatrickPretty.com

Day: March 5, 2013

  • HIGH POINT (N.C.) ENTERPRISE: Zeek Reached Out To Pluck Utah Man; 1 Downline Had 1,500 Members, Victim Tells Paper

    Zeek Rewards likely had a presence in all 50 U.S. states, plus U.S. territories. The High Point Enterprise, a publication in Zeek’s home state of North Carolina, today has a story about a Utah man who joined the “program” just prior to the SEC bringing allegations in August 2012 that Zeek was a $600 million Ponzi- and pyramid scheme.

    From the Enterprise (italics added):

    During recruitment meetings at a house in Richfield, Olsen said he was approached with a soft-sale pitch to become part of Zeek Rewards. Olsen was told that his $10,000 “would build my credit in the business” and allow him to reap greater income. The recruitment of Olsen took place over a period of months, and the approach was to build a relationship of trust rather than “twist my arm,” he said. The Zeek Rewards affiliates that Olsen met emphasized that the money he provided wasn’t an investment. But when the Securities and Exchange Commission shut down Zeek Rewards, the federal agency called it an unregistered securities business.

    “They said that they would be in trouble if they called it investing,” Olsen recalls.

    Read the full story in the Enterprise, which described Olsen as an individual who’d just lost his job and discussed a plan with his wife by which the couple would sell a family vehicle to join Zeek.

    See “Zeek, The ‘I’ Word And The Weight Of History . . .,” an editorial published by the PP Blog on July 25, 2012.

    EDITORIAL NOTE: Ponzi schemes cause real pain to real people. Regardless, the Ponzi-board apologists for Zeek continue to demonize the court-appointed receiver, continue to engage in wordplay to sanitize “opportunities” and continue to fuel schemes such as Zeek by parroting disclaimers such as “don’t spend more than you can afford to lose.”

    Blaming victims or insisting no victims exist is one of the most odious practices of the serial Ponzi pitchmen.

     

  • North Carolina Secretary Of State: Profitable Sunrise ‘A Real Danger To The Investing Public’

    recommendedreading1EDITOR’S NOTE: Reproduced below is the full news release by the office of North Carolina Secretary of State Elaine F. Marshall on the cease-and-desist order issued last week to “Profitable Sunrise.”

    Even as the state has raised serious concerns about the “program,” Profitable Sunrise “defenders” have been seeking to minimize the issues. Some people even are hurling insults at North Carolina regulators while blanketing Ponzi-scheme forums such as TalkGold and MoneyMakerGroup with “I got paid” posts.

    That a program “pays” is not evidence that no fraud scheme is occurring. (Bernard Madoff “paid” — right up until the day he didn’t.)  Along those lines, collapsed “programs” such as Zeek Rewards, AdSurfDaily, Legisi, Pathway To Prosperity and Imperia Invest IBC — all of which advertised outsize returns  — all had a presence on the Ponzi boards.

    Some “defenders” of Profitable Sunrise appear to be scurrying to describe the alleged investment “program” as the recipient of “loans” from customers. The “loan” claims may raise altogether different issues — such as whether Profitable Sunrise is engaging in unlawful banking while commingling assets and operating as an unlawful investment pool. And despite “defenders’” claims that Profitable Sunrise is  not the issuer of “securities” as investment contracts, Profitable Sunrise has advertised five investment schemes on its own website, including a bizarrely named plan known as the “Long Haul” that purported to pay 2.7 percent a day. The Legisi HYIP scheme  sought to escape scrutiny in the United States by calling itself a “loan” program. Federal prosecutors described Legisi operator Gregory McKnight’s  wordplay as “semantic obfuscation.” The SEC earlier described U.S.-based Legisi pitchman Matthew John Gagnon as a threat to the investing public.

    Here, below, the statement by Marshall’s office . . .

    ** ______________________________________________ **

    Raleigh – North Carolina Secretary of State Securities officials have issued a Temporary Order to Cease and Desist to Roman Novak, Radoslav Novak and Inter Reef LTD d/b/a Profitable Sunrise to bar them from offering and selling or attempting to sell securities in the form of investment contracts to North Carolina’s investing public.

    Secretary of State investigators say the respondents promoted five different “investment plans” through a website that offered rates of return ranging from 1.6-percent per business day to 2.7-percent per business day. Investors were told their money would be used to fund short-term loans to businesses. Investors were also told their investments were “risk-free,” “with a certain rate of return and no chance of default,” and that “all funds deposited with us are insured against loss.”

    Secretary of State investigators have also discovered that victims were making wire transfers of money to financial institutions in Eastern European countries.

    However, the respondents were never registered with the North Carolina Secretary of State’s Securities Division to sell securities and the investment itself was not registered as a security in accordance with the North Carolina Securities Act.

    “We have issued this Cease and Desist Order because we believe this solicitation poses a real danger to the investing public,” Secretary of State Elaine F. Marshall said Friday. “Proper registration of securities and the individuals selling securities is fundamental to protecting the public from con artists and investment fraud. That is why it is so important to call our Securities Division before investing your hard-earned money to make sure that the investment you are considering is registered. This case also demonstrates the perils of web-based investment marketing.”

    Marshall urged anyone in North Carolina who has invested with Profitable Sunrise to contact the Secretary of State’s Securities Division at 1-800-688-4507.

  • British Fraudster Running Investment Swindle And Conducting Pitchfests In Utah Sent Email To Undercover Agent, Feds Say; John S. Dudley Pleads Gulity To Wire Fraud

    ponzinews1John S. Dudley, a citizen of Great Britain, has pleaded guilty to wire fraud in federal court in Utah in an investment-fraud case that featured the presence of an undercover agent who’d received email from Dudley, the office of U.S. Attorney David B. Barlow said.

    The agent — from the Utah Department of Commerce’s Division of Securities — was described as “UA” in court papers, prosecutors said.

    As part of a plea agreement, Dudley will not contest a restitution order for more than $6.8 million, prosecutors said. When Dudley completes his sentence, prosecutors expect to deport him under the terms of the plea. Prosecutors have recommended a prison sentence of five years.

    Dudley was accused in 2011 of a Ponzi scheme that married multiple components, including pitchfests for “various investment programs, including a foreign exchange trading program, mining speculation, European and domestic stock options and commodity trading, and a human jetpack rocket suit,” prosecutors said at the time.

    The pitchfests were described as “bounce nights” or “Tashi group meetings,” prosecutors said at the time.

    From a statement by prosecutors on the Dudley guilty plea (italics added):

    The indictment alleged Dudley made a variety of representations to potential investors, including telling them they could expect monthly returns of 5-10 percent; that he had not suffered a trading loss since 1978; that investors’ funds would be used exclusively for investment purposes; that he had personally done very well in his investments and had never made less than 5 percent per month over the last 30 years; that investors’ money was backed by a “senior life settlement policy” that reduced or eliminated investors’ risk of loss; and that investing with him was an exclusive opportunity with only a limited number of investors allowed to invest with him at one time.

    As a part of the plea agreement reached with federal prosecutors, Dudley admitted he sent an e-mail to an individual, identified as U.A. in the plea agreement, with the subject line “Re: Castle Creek Bank Details.” He admitted that the e-mail was a part of his attempt to execute the fraud scheme by obtaining money under false representations. Investor U.A. is identified in the indictment as a Utah Department of Commerce’s Division of Securities investigator acting in an undercover capacity in the indictment.