PatrickPretty.com

Day: April 14, 2015

  • BULLETIN: SEC Hits Another Ponzi-Board Scam; Action Against CashFlowBot (DollarMonster) May Cause Restlessness Among ‘Small’ Operators

    breakingnews72BULLETIN: The SEC has gone to federal court in Atlanta, charging the alleged operator of CashFlowBot (DollarMonster) with operating a Ponzi scheme. The “program” had a presence on Ponzi-scheme forums such as TalkGold and MoneyMakerGroup.

    James A. Evans, 33, of Villa Rica, Ga., has been charged with selling unregistered securities and securities fraud. The SEC accused him of making misrepresentations to investors and operating CashFlowBot as a Ponzi scheme dating back at least to 2012.

    CashFlowBot, according to the SEC complaint, used the SolidTrustPay payment processor.

    From the SEC complaint (italics added):

    The underlying mechanics of the DollarMonster scheme were simple: investors deposited funds into their Solid Trust accounts and then transferred those funds to a Solid Trust account controlled by Defendant Evans. Defendant Evans then transferred a portion of the funds to his personal bank account, and also redistributed funds to investors’ Solid Trust accounts as purported investment returns.

    Investors were able to log into their DollarMonster accounts, which included the purported dollar value of their accounts (without identifying any underlying securities or ownership interests), including purported earnings.

    The DollarMonster website did not contain language limiting investors to accredited or sophisticated investors, nor did the process of registration or creating an account require information indicating whether investors were sophisticated or accredited.

    The scam gathered about $1.15 million, the SEC alleged. The agency’s action is the second this year against a Ponzi-board scheme that, relatively speaking, appears not to have collected a tremendous sum of money. (Not that $1.15 million is anything to sneeze at.)

    In February, the SEC sued Achieve Community, alleged to have gathered about $3.8 million. The actions against Achieve and CashFlowBot may demonstrate that the agency is tracking schemes large and small, something that could cause fitful sleep in the HYIP sphere.

    Some schemes such as TelexFree (2014/$1.8 billion) and ZeekRewards (2012/$897 million) gathered tremendous sums of money before interventions by law enforcement.

    After he was subpoenaed in July 2014, Evans appeared to be hatching a new scheme at TheInvestorsExchange.com, the SEC said.

    “Theinvestorsexchange.com purports to match investors looking for an investment return with individuals and companies that need capital,” the SEC alleged. “Theinvestorsexchange.com website also lists various advertisements for purported investment opportunities, with links to email addresses that potential investors can contact for further information.”

    Read the SEC’s statement on CashFlowBot.

  • URGENT >> BULLETIN >> MOVING: Investment Scam Targeted Military Personnel At Fort Hood In Texas, SEC Says

    breakingnews72URGENT >> BULLETIN >> MOVING: (Updated 9:05 a.m. EDT April 15 U.S.A.) An investment scam known as LB Stocks and Trades Advice LLC was targeted at military personnel at Fort Hood in Texas and perhaps other installations, the SEC has alleged.

    Charged in the scheme were the company and alleged operator Leroy Brown Jr., 32, of Killeen, Texas. The SEC described Brown as a member of the U.S. Army between 2001 and 2013.

    “Trust is a bedrock principle to our military, and we allege that Brown exploited his own military experience and abused that trust for his own personal gain,” said David Woodcock, director of the SEC’s Fort Worth Regional Office. “Investment fraud is always wrong, but it’s especially pernicious when perpetrated against those who have sacrificed so much for our freedom.”

    A federal judge imposed an asset freeze and temporary restraining order, the SEC said.

    Brown, the SEC said, claimed a longstanding presence in the investment trade, offices in New York and San Francisco, “guaranteed” returns, an ability to double or triple money in 120 days and business associations with “Walmart, Apple, Sony, Microsoft, Best Buy, HP, USA Today, and McAfee.”

    From the SEC’s complaint (italics added):

    Based on these intentional misrepresentations, Brown solicits investors to purchase $1,000 membership certificates in LB Stocks to participate in the Company’s purported investments in undeveloped real estate that Brown guarantees will double or triple the investors’ investments. Brown also represents that he and LB Stocks trade stocks, mutual funds, exchange traded funds (“ETFs”), commodities, and foreign exchange currencies for their clients.

    In a statement, the SEC said Brown “specifically claimed to have all the necessary licenses and registrations to conduct securities business. In reality, Brown is not a licensed securities professional and his firm is not registered with the SEC, Financial Industry Regulatory Authority, or any state regulator. Brown and his firm have no evident experience with investments.”

    Some of Brown’s claims were bizarre. Among them, according to the SEC, was that Brown would offer an “IPO” under a ticker symbol already in use by another company.

    “Thank you God. BOOM POW BAM[,]” Brown allegedly wrote on Facebook.

    As part of his scheme, Brown copied information from the website of E*Trade to his own website — and then swapped in “LB” names, the SEC alleged.

    The precise dollar sum gathered by the scheme was not immediately clear.

    “Beginning in the first quarter of 2014, Brown began receiving substantial deposits of funds into his personal brokerage account,” the SEC charged. “These deposits show that Brown received funds from investors who intended to invest in, or with, LB Stocks. In fact, wire transfer details for several of these deposits specifically reference LB Stocks as the ‘Acct Party’ in the receiving account field — even though the funds were deposited or transferred directly into Brown’s personal brokerage account.”

    “Nearly all” of the funds went from the personal brokerage account into Brown’s personal bank accounts, the SEC alleged.

    Although Brown didn’t leave the Army until July 2013, he claimed to have 65,000 investment clients, the SEC charged.

    Americans are very sensitive to events involving Fort Hood. In 2009, the base was the site of a mass shooting carried out by Nidal Malik Hasan, a former Army major now on Death Row. Thirteen individuals were killed, including officers, enlisted personnel and one civilian employee.

    Thirty-two more individuals were wounded, many of them struck by bullets.

    Read the SEC’s Investor Bulletin for military personnel.

  • ‘GooBets,’ Cross-Border Fraud Scheme, Emerges

    GooBets, an emerging HYIP scheme with a presence on social media, is leehing off the brands of the NBA and NFL, among others.
    GooBets, an emerging HYIP scheme with a presence on social media, is leeching off the brands of the NBA and NFL, among others.

    2ND UPDATE 2:19 P.M. EDT U.S.A. A “program” known as “GooBets” that appears to be targeting speakers of Portuguese and English has emerged. BehindMLM.com broke the news this morning.

    After observing the GooBets site, the PP Blog sought comment from the National Football League and the National Basketball Association. That’s because GooBets is using the intellectual property of both sports leagues in a rolling promo on its website.

    Neither league responded immediately to the requests for comment. The Blog will publish the responses, if received.

    Update 12:25 p.m. Brian McCarthy, a spokesman for the NFL, said in an email that the league did not have a comment.

    Update at 2:19 p.m. The U.S. Securities and Exchange Commission declined to comment on GooBets. (Original story continues below . . .)

    Images of players from the NFL’s San Francisco 49ers and Seattle Seahawks appear on the GooBets website. So do images of players from the NBA’s Los Angeles Lakers and Orlando Magic. An inspirational quote attributed to NBA legend Michael Jordan appears on the site, which also uses images from professional soccer and tennis.

    Many fraud schemes leech off the brands of famous business entities or people.

    GooBets is reminiscent of earlier collapsed “betting” schemes or “arbitrage” programs such as GoldNuggetInvest. GNI collapsed in 2010, amid a bizarre assertion it was seeking a “crystal clear vision of our financial vortex.” A probable reload scheme known as “New GNI” later emerged, pushed by Ponzi-board legend “Ken Russo,” a figure in the Zeek Rewards and Profitable Sunrise schemes — among many others.

    Zeek Rewards and Profitable Sunrise were massive fraud schemes, according to the SEC. NewGNI appears to have gone missing in 2013.

    Like the original GNI, NewGNI, Zeek and Profitable Sunrise, GooBets has a presence on well-known Ponzi-scheme forums such as MoneyMakerGroup.

    Twitter already is thick with GooBets promos. One of them, dated today, claims that “Sports Trading Has Never Been So Easy. In GooBets Everybody Makes 25% to 31% Per Week. Period!!!”

    Promos for GooBets also appear on Facebook and YouTube. The U.S. Securities and Exchange Commission updated its Investor Alert on fraud schemes trading on social media in November 2014.

    “Investment fraud criminals look for victims on social media sites, chat rooms, and bulletin boards,” the SEC said.

    The targeting of GooBets — at speakers of Portuguese or English — also is reminiscent of the collapsed TelexFree scheme in 2014. TelexFree, which reached across borders and appears to have gathered $1.8 billion while creating at least hundreds of thousands of fraud victims, triggered investigations by the SEC and the U.S. Department of Homeland Security.

    In 2015, a scheme known as Wings Network was operating in part from Massachusetts at Ground Zero for TelexFree. The SEC brought an action against management and promoters, alleging Wings was a Ponzi- and pyramid scheme that appeared to have set up shop in Portugal and the United Arab Emirates to reach across borders and scam the masses.

    Wings allegedly plucked at least $23.5 million.

    At least one TelexFree promoter who appears to have been involved in the WCM777 scam broken up by the SEC last year used the logo of the NFL in Facebook promos and sought to lure prospects with game tickets.

    A promo in English for GooBets observed by the PP Blog today read in part (italics added):

    Hey, it’s a VERY excited Darren here :-)

    This is like shooting fish in a barrel… a barrel with no water in it !!

    I have FINALLY found the Holy Grail – a 100% legit way to earn a steady and secure Passive Income stream online and I just had to tell you about it.

    The name of the Company is GooBets LLC. and is the collaboration between a VERY successful ‘Sports Trader’ – Miguel Carvalho and his Mega-Business partner – Augusto Queiroz.