PatrickPretty.com

Tag: cross-border crime

  • Now, A ‘Fraudulent $53 Million Worldwide Off-Exchange Forex Scheme,’ CFTC Alleges; Agency Charges Australian Resident Senen Pousa, U.S. Residents Joel Friant And Michael Dillard, Along With ‘Investment Intelligence Corp.’ And ‘Elevation Group Inc.’

    EDITOR’S NOTE: In a statement on the allegations against Senen Pousa, Joel Friant, Michael Dillard and their companies, the CFTC pointedly stressed that international agencies cooperated in a probe and that the alleged scammers created victims in multiple nations . . .

    The CFTC has gone to federal court in the Western District of Texas, alleging that Senen Pousa of Australia and Joel Friant of Bellingham, Wash., were running a “fraudulent $53 million worldwide off-exchange Forex scheme” through an Australian enterprise known as Investment Intelligence Corp. (IIC).

    Also charged in the alleged caper were Michael Dillard and Elevation Group Inc. of Austin, Texas.

    “The scheme allegedly accepted at least $53 million from at least 960 clients worldwide, including at least 697 clients in the United States, and clients in Australia, the United Kingdom, Canada, Germany, the Netherlands, and Singapore, among other countries. None of the defendants has ever been registered with the CFTC,” the CFTC charged.

    U.S. District Judge Lee Yeakel of the Western District of Texas issued an emergency freeze of the assets of Pousa, Friant and IIC and prohibited the destruction of books and records, the CFTC said.

    Cooperating in the probe were the Australian Securities & Investments Commission, the U.K. Financial Services Authority, the Hungarian Financial Supervisory Authority, the Netherlands Authority for the Financial Markets, the Financial Markets Authority of New Zealand and the New Zealand Serious Fraud Office, the CFTC said.

    From a CFTC statement (italics added):

    The CFTC complaint alleges that from at least January 1, 2012 through the present IIC, through Pousa, Friant and its other agents, and defendants Dillard and Elevation Group, utilized “wealth creation” webcasts, webinars, podcasts, emails, and other online seminars via the Internet to directly and indirectly solicit actual and prospective clients worldwide to open forex trading accounts at IIC. The complaint further alleges that clients were promised by IIC, through Pousa, Friant, and other agents 1) a monthly return of 9 percent, 2) that IIC’s managed forex trading would risk less than 3 percent of a client’s capital per transaction, 3) that IIC was able to limit the risk inherent to forex trading by limiting its managed forex trading to 2 to 5 trades per month, and 4) that IIC has six “proprietary traders” working 24 hours a day trading clients’ funds. The CFTC complaint alleges that all of these representations to clients were false.

    On or about May 16-17, 2012, the complaint alleges that clients suffered a loss of over 60 percent of their investment, when IIC, by and through its agents, entered over 200 forex trades in each client’s account in violation of the representations made by IIC, by and through its agents.

    Also assisting the CFTC were the Texas State Securities Board, the Washington State Department of Financial Institutions, the U.S. Attorney for the Western District of Texas, the FBI and the SEC, the CFTC said.

    Read the CFTC complaint.

  • Joyous Dog’s Death ‘A Sign Of GOD Telling You To Stop Publishing Fear And Meaningless Accusations Once And For All,’ HYIP Apologist Claims

    They’ll tell you that 2 percent a day (730 percent a year) is not too good to be true and that experts had performed “due diligence.” They’ll say their “program” is different from other schemes that either collapsed under their own weight or were brought down by the government. They’ll position themselves as free-market entrepreneurs, perhaps even the guardians and gatekeepers of freedom itself.

    They’ll draft grandparents into their cross-border HYIP fraud schemes, tell them to set up accounts for their grandchildren and then proceed to defraud entire families — oldest to youngest.

    Grandma might not even know that the payment-processing account her unlicensed, unregistered sponsor helped her set up for 15 percent of her personal and family outlay is based offshore.

    By design.

    It makes the money harder to trace. It creates jurisdictional hurdles for law enforcement. It gives the collective of international criminals more time to pick more pockets — and pick them they will. It’s what they do. Often repeatedly in scam after scam. Sometimes for years.

    If you’re an American interested in politics — perhaps especially if you have Republican, conservative, rightist or libertarian leanings and hold the principled view that less government is best — they’ll shape a message just for you. Because the sales pitch is designed to confirm your biases while at once loosening your purse strings, you’ll be less apt to be discerning. They might tell you what you should be angry about — the economy, the Fed, Wall Street, the banks, the bailout, the regulators, the politicians who start wars.

    This does not mean, however, that they won’t be glad to separate you from your money if you’re a centrist of any political persuasion or a Democrat, liberal or leftist in your leanings. They’ll tell you anything to get access to your money.

    The schemes work best during lean times. If no bogeyman exists in your life, they’ll create one for you to loathe: an individual, an authority figure, an agency, a bureaucracy, a member of the media. Their frauds are designed to separate you from your rational self; that’s how they suck you in.

    There may be a public face of the enterprise, perhaps a man who projects impeccable manners. He’ll be described as a genius, perhaps by a conference-call or webinar host who has a soothing voice made for radio. If you haven’t been able to access your account for weeks and aren’t really sure where your money is, someone will suggest it is your fault. Stepfordian shills will reinforce that notion. They’ll try to make you believe that questioning the enterprise is a sign of weakness, a sign that — unlike the rest — you lack faith.

    True believers will emerge. So will enforcers who will “defend” the enterprise at any cost. There may be no ceiling to their wretched excess, their intellectual dishonesty, their disconnect from the world of rational thought. Some of them even will send notes to reporters that read like the one the PP Blog received yesterday at 3:41 p.m. EDT.

    The would-be poster tried to put this in the thread below my tribute post to Maddy, my beloved terrier who died last week.

    Here is is:

    Congratulations! At last a real report based on credible sources and on a fact- not on fabricated false statements or regurgitated information from somewhere else.

    A dog’s life is worthless if his owner is engaged in spreading lies and speculation to harm others.

    It’s a sign of GOD telling you to stop publishing fear and meaningless accusations once and for all. If you don’t believe in him (GOD) but Karma, then this is it coming at ya.

    The next time it will be someone who you love not an animal.

    You’ve been warned by the universe.

    [Name Deleted By PP Blog]

    We’d like to say that the suggestion that God favored HYIP Ponzi schemes and caused Maddy’s death because of what the PP Blog has written represents a new low.

    But it doesn’t.

    In 2008 — on the seventh anniversary of the 9/11 terrorist attacks — an apologist for the AdSurfDaily Ponzi scheme that had sucked in at least $110 million by promising to provide a daily return of 1 percent released a “prayer” that asked God to cause U.S. federal prosecutors to be made to suffer.

    And to be struck dead.

    It therefore comes as no surprise that an HYIP apologist could not resist the urge to subject Maddy — a tiny dog who provided nothing but joy, never saw a person she did not love and put smiles on countless faces — to such a monstrous indignity.

    In the HYIP sphere, according to the apologist, God protects the innocent operators of schemes advertising 2 percent a day and kills dogs to send a message to their owners not to try to warn the public about transnational crime made possible over the Internet.

    And if the death of a dog doesn’t provide enough of a chill for a reporter to abandon a story, then maybe God or at least the forces of karma then will cause family members to die.

    It is thuggery and racketeering, the voluntary abandonment of the greater angels of the soul, and it is utterly bereft of decency.

     

  • INTERPOL PRESIDENT: Transnational Criminals Working For ‘Common . . . Boss’ In Asia Gathered Billions; Suspects Caught At Airport In ‘Nick Of Time’; Cybercrime Costs In Europe Now Approaching $1 TRILLION A Year; U.S. Banks Lost $12 Billion To Cyber Criminals In 2011

    “[Eighty] per cent of crime committed online is now connected to organized gangs operating across borders. Criminal gangs now find that transnational and cybercrime are far more rewarding and profitable than other riskier forms of making money.” — INTERPOL President Khoo Boon Hui at 41st European Regional Conference held in Tel Aviv, citing study from London Metropolitan University, May 8, 2012

    INTERPOL President Khoo Boon Hui at the 41st European Regional Conference in Tel Aviv. Source: INTERPOL.

    EDITOR’S NOTE: HYIPs, autosurfs, money-cyclers, and other “programs” are part of the cyber menace, which increasingly is being advanced by criminal gang members who reach across national borders and line their pockets with money stolen from their targets.

    In June 2011, U.S. Attorney General Eric Holder described the amount of money being stolen online as “staggering.”

    The thefts, Holder said, have “the potential to threaten not only the security of our nation — but the integrity of our government, the stability of our economy, and the safety of our people.”

    In Tel Aviv yesterday, INTERPOL cited some truly alarming numbers . . .

    How big is the criminal menace becoming in the age of cross-border fraud on the Internet?

    In jaw-dropping remarks yesterday in Israel, INTERPOL President Khoo Boon Hui said Malaysian police last month arrested 137 “gang members” from China and Taiwan who were running an online gambling scam that had gathered the staggering sum of $1.3 billion in “profits.” (NOTE: This sum is quoted in U.S. dollars.)

    The scammers, Hui said, were part of a cross-border criminal syndicate that was operating from “six luxury homes equipped with call centres, computers and even training rooms in a gated community which was also home to a former prime minister.”

    If that weren’t enough, Malaysian police — just two days after taking down that scam — encountered another one that had resulted in criminal profits in the billions. The second scam again involved gang members from China and Taiwan. It resulted in 83 arrests, Hui said.

    “They cheated victims in China and Taiwan through online scams involving a range of modus operandi from impersonating the authorities to phoney credit card and bank charges,” Hui said. “They were on the verge of fleeing the country, having closed down their operational base and some had even made it to the airport where they were detained in the nick of time. They had been in Malaysia for just eight months when they were arrested.”

    Early information suggests that the fraud “originated from Macau and had operated from other countries such as Cambodia, Indonesia, Philippines and Thailand,” Hui said.

    The story of the arrests, however, appears to have an ending that could be described as unfinished. Indeed, Hui said he grew “perturbed” when he found out that the subjects of the arrests were deported because “thousands of victims were out of Malaysian Police jurisdiction.”

    “I was perturbed by this course of action and asked the Malaysian Police Chief for more details when I met him last Friday,” Hui said. “It turned out that though the two syndicates were unknown to each other, they were controlled by a common Taiwanese boss. This was why the second syndicate had been alerted to pack up. Fortunately, the Taiwanese Police, which as we all know is not an INTERPOL member, was able to fully cooperate with its Chinese and Malaysian counterparts and had alerted them of what was happening from its own close monitoring. The Malaysian Police chief was confident that the gang members would get their just dues back in their homeland.”

    In relating the story of scammers who allegedly stole billions of dollars while operating inside the borders of another nation, Hui said the incident highlights some of the problems law enforcement encounters in the age of the Internet.

    “This case illustrates how organized crime is now able to recruit members from countries without diplomatic ties to commit crimes overseas operating from temporary safe bases in third countries equipped with the latest technology,” Hui said. “It also shows that there are links between syndicates that operate scams and those which promote illegal betting and presumably match fixing using sophisticated MOs. In this case, exceptional international police cooperation within the region thwarted them.”

    And cybercrime hardly is limited to Asia, Hui said, noting that the menace and its economic costs come in more than one form.

    “Here in Israel alone, a reported number of over 1,000 cyber?attacks take place every minute,” Hui said. “Experts have estimated that the cost of cybercrime is larger than the combined costs of cocaine, marijuana and heroin trafficking. In Europe, the cost of cybercrime has apparently reached 750 billion Euros [US$971 billion] a year. Likewise, we have seen global financial institutions suffer from major cyber?attacks on their networks and servers with US banks purportedly losing $900 million to bank robbers but $12 billion to cyber criminals last year.”

     

  • EDITORIAL: Top Justice Department Official Speaks On Transnational Organized Crime, References Bogus ‘Libel’ Actions Brought Against ‘Individuals Who Expose . . . Criminal Activities’

    EDITOR’S NOTE: A top U.S. official — speaking today in Mexico City at the High-Level Hemispheric Meeting Against Transnational Organized Crime hosted by the Mexican government under the framework of the Organization of American States (OAS) — addressed the challenges the world law-enforcement community is confronting in the Internet Age.

    In remarks apt to cause unease within the HYIP and organized-crime spheres, Deputy U.S. Attorney General James Cole noted that the government was wise to efforts by criminals to chill efforts to expose crimes by filing libel lawsuits. (A link to Cole’s full prepared remarks appears at the bottom of this story.)

    Some recent Ponzi cases in the United States involving incredible sums of money — and the corresponding behavior of some of the participants — help prove the point . . .

    Now-convicted racketeer Scott Rothstein threatened libel lawsuits when his $1.2 billion Ponzi scheme was on the verge of imploding.

    AdSurfDaily President Andy Bowdoin, named a defendant in a 2009 civil case that alleged racketeering,  issued “slander” lawsuit threats prior to the August 2008 intervention by the U.S. Secret Service in the ASD scheme. The threats were issued not long after Bowdoin had returned from a trip arranged by a lawyer in which the ASD patriarch had ventured to Panama and Costa Rica, according to court filings.

    Bowdoin later was indicted, amid allegations he was presiding over an international  Ponzi scheme that had gathered at least $110 million. Robert Hodgins, who was referenced in 2007 ads for ASD, is an international fugitive wanted by INTERPOL. The United States accused Hodgins of laundering proceeds for narcotics traffickers in Colombia.

    In advance of today’s High-Level Hemispheric Meeting Against Transnational Organized Crime, OAS Secretary General José Miguel Insulza noted that such crime “is the principal continental source of activities such as drug trafficking, the illicit trafficking of firearms and immigrants, human trafficking, money laundering, corruption, kidnapping, and cybercrimes.”

    Befitting its importance, the hemispheric meeting was hosted by Felipe Calderón, the president of Mexico.

    Among others things, Deputy U.S. Attorney General James Cole said this at the meeting:

    “The advance of globalization and the internet, while hugely beneficial to people everywhere, has also created unparalleled opportunities for criminals to expand their operations and use the facilities of global communication and commerce to carry out their criminal activities across national borders.”

    Although Cole did not use the term “HYIP” in his remarks, it is clear that the U.S. government is well aware of the dangers online fraud schemes pose as they reach across borders to accumulate tens and even hundreds of millions of dollars — sometimes through a single fraud scheme.

    As the PP Blog read the text of Cole’s remarks, another thing leaped off the page. Indeed, Cole said this (emphasis added):

    “Because of the sophistication of the world economy, organized crime groups have developed an ability to exploit legitimate actors and their skills in order to further the criminal enterprises. For example, transnational organized criminal groups often rely on lawyers to facilitate illicit transactions. These lawyers create shell companies, open offshore bank accounts in the names of those shell companies, and launder criminal proceeds through trust accounts. Other lawyers working for organized crime figures bring frivolous libel cases against individuals who expose their criminal activities.“

    Cole, of course, wasn’t talking specifically about the AdSurfDaily Ponzi case and ASD’s preposterous claims that Bowdoin had found a legitimate way to pay interest of 1 percent a day on the tens of millions of dollars sent in by participants and that ASD would create 100,000 millionaires in three years.

    Even so, the words Cole uttered in Mexico City today have deep relevance to the HYIP sphere. Indeed, ASD reached across international borders and relied on an international sales force.

    Here is how ASD worked: It relied on “legitimate actors” of the sort Cole described — in ASD’s case, a lawyer who allegedly scrubbed the “opportunity” to ensure compliance, and Moms and Pops and entrepreneurs (and people down on their luck) who signed up and became the friendly faces to their prospect bases. The salespeople were paid 10 percent for recruiting a friend with money and 5 percent more if the friend could recruit a friend with money — on top of “surfing” earnings of 1 percent a day and even more through the purported miracle of “compounding.”

    The current HYIP scheme of JSS Tripler/JustBeenPaid has the same type of payout schemes that ASD foisted on the marketplace. One big difference is the JSS/JBP says it can provide twice the daily payout of ASD.

    JSS/JBP’s purported operator is Frederick Mann, a former ASD pitchman.

    In September 2011, the U.S. Secret Service described ASD as a “criminal enterprise.”

    You’ll note above that Cole today used the same phrase to describe one of the inherent threats of transnational organized crime. And, as noted above, he also spoke about bids to chill critics through the filing of libel lawsuits.

    Those same types of threats were made in the ASD case, beginning in the summer of 2008. In fact, federal prosecutors even included an evidence exhibit in case filings that alluded to one such alleged threat. Unmentioned in the initial ASD case filings were the bids to chill reporters in at least two states and a newspaper in Georgia.

    If you’ve been following the HYIP sphere for any length of time, you know that threats to sue members of the antiscam community are part of the landscape — so much so, that it has become an HYIP cliche. The bids to chill are not limited to threats to sue for libel and “slander,” however.

    It also is becoming an HYIP cliche that the operators and apologists for brazen HYIPs threaten to file complaints with the ISPs of members of the antiscam community — i.e., if you report about us we’ll take down your Internet connection and/or sue you for copyright/trademark infringement.

    These things are transparent bids to chill speech. They also are designed to have a secondary “benefit”: to make the marks — who may consist in part of people who are otherwise “legitimate actors” — believe that harm will come to them if they ever complain, that there are severe consequences to those who complain.

    These nefarious methods have surfaced in scheme after scheme after scheme, as have various assertions about “offshore” venues and the purported “safety” the “offshore” venues provide. Longtime observers know the claims are part and parcel to the HYIP sphere — and that claims that someone is a successful businessman who has presided over multiple companies almost certainly will be incorporated into the sales pitch for an “opportunity.”

    The FBI, for just one example, has been warning for years about securities fraud, the “shadow banking system” and the use of shell companies to disguise fraud proceeds. The director has testified repeatedly on Capitol Hill  about the subject, while simultaneously warning about debit cards that are being used in nefarious ways and the dangers posed by lone wolves and “home-grown, violent extremists.”

    All of these things are or may be in play in the HYIP sphere. Here are some things you should know:

    • It is likely that the scheme’s operator is trading on the credibility you have with loved ones and friends within your immediate sphere of influence to drive dollars to the scam. It is equally likely that you are being denied the sort of information that would empower you to make an informed purchasing decision and highly likely you are being asked to participate in a venture that could result in prosecutions under both civil and criminal law, possibly even the RICO statute.
    • The rate of return will be preposterous in any real-world context and the math will be fuzzy and confusing, if not downright impossible.
    • Your sponsor will lie to you or pass on GIGO that is part of the company line because the company line is more convenient than the uncomfortable truth. It will be garbage coming in, and garbage going out.
    • You will be subjected to a direct or indirect threat or a bid to chill, especially if you ask uncomfortable questions or raise any doubts.
    • There  is a chance you’ll be working for a racketeer or an international criminal, perhaps even a “sovereign citizen” who has hatched a construction by which nothing is a crime, that all conduct is lawful in the name of freedom and free markets. If your sentiment is against the government or “big business” because of your personal financial situation or your political or philosophical views, an extremist may try to exploit your sentiment for personal profit.

    Just some things to think about in the age of the HYIP, the age of terrorism and the age of transnational organized crime as practiced on the Internet . . .

    Read the full remarks of Deputy U.S. Attorney General James Cole here.