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Tag: Preferred Platinum Services Network LLC

  • SCAMMER’S GAMBLE BACKFIRES: Fraudster Who Chilled Customer With Lawsuit Threat Pleads Guilty To Mail Fraud; Philip Pestrichello Faces Up To 20 Years In Prison After Plea In ‘Work-At-Home’ Caper

    Source: FBI.Â

    UPDATED 4:51 P.M. EDT (U.S.A.) A convicted felon who emerged from prison and almost immediately launched a $1 million fraud scheme known as PPSN threatened to prosecute and sue a consumer who had filed an online complaint, federal prosecutors said.

    Although the threat caused the consumer to withdraw the complaint against Philip Pestrichello, Pestrichello’s bid to rattle the consumer’s nerves ultimately backfired because he included a “fake lawsuit number” in a letter to the consumer. Prosecutors used the letter and Pestrichello’s checkered past to persuade a federal judge to deny him bail. He has been jailed since his February arrest, and now faces up to 20 years behind bars after entering a guilty plea in the case.

    In the threatening letter, Pestrichello advised the complainant that “we will proceed by filing a lawsuit against you in The State of New York and you will be subject to prosecution, fines and penalties including monetary damages,” prosecutors said.

    Pestrichello also threatened “victim-consumers who lodged on-line complaints warning others that PPSN was a scam,” prosecutors said.

    The Federal Trade Commission and the U.S. Postal Inspection Service worked together in the Pestrichello case, which was brought in February as one of the undertakings of President Obama’s Financial Fraud Enforcement Task Force.

    Pestrichello was running a scam enterprise known variously as “Preferred Platinum Services Network LLC” ; “PPSN LLC”; “Home Based Associate Program”;  and the “Postcard Processing Program,” prosecutors said. They added that he had been running scams since the early 1990s and had been sentenced to three years in prison in 2003 after being convicted of mail fraud in a work-at-home scheme known as “IMXT & Co.”

    His most recent scam began in 2007 while Pestrichello was on federal probation after serving his time for the 2003 mail-fraud conviction, prosecutors said.

    “For nearly 20 years, Philip Pestrichello has preyed on the especially vulnerable — the economically disadvantaged, the unemployed, the disabled, or elderly individuals — who are trying to supplement their income by working from home,” said U.S. Attorney Preet Bharara. “Pestrichello even began committing his work-at-home scam within one year from his release from prison for a prior scam. If Pestrichello thought he was unstoppable, he was wrong.”

    Pestrichello, 38, of Bayville, N.J., now has pleaded guilty to mail fraud in the PPSN case. He faces up to 20 years in prison when sentenced by U.S. District Judge Kimba Wood on Oct. 26. A fraud case against Pestrichello’s wife, Rosalie Florie, is pending, prosecutors said.

    It is common for fraudsters to threaten to sue customers, critics and journalists. Such threats were present in the $1.2 billion Ponzi scheme case of disgraced Florida attorney Scott Rothstein, who eventually was disbarred. He repeatedly threatened to sue a reporter who questioned his business practices in the weeks leading up the the exposure of the scheme.

    Threats against customers and journalists also were part of the alleged AdSurfDaily Ponzi scheme case. ASD President Andy Bowdoin, according to August 2008 court filings, told customers that he had set aside $750,000 to sue critics.

    “These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit,” Bowdoin said, according to federal prosecutors. “Now, we’re ready to do battle with anybody. We have a legal fund set up. Right now we have about $750,000 in that legal fund. So we’re ready to get everything started and get the ball rolling.”

    Less than a month after Bowdoin allegedly issued the threat in July 2008, the U.S. Secret Service raided ASD’s Florida headquarters. Prosecutors said the company was operating a $100 million Ponzi scheme and engaging in wire fraud and money-laundering.

    Even after the raid, some ASD members continued to threaten Bowdoin’s detractors. One ASD member suggested Bowdoin’s critics would be dragged off in handcuffs for speaking out against the autosurf firm, publishing his version of lyrics from the television program “COPS” to put a chill on the purported slanderers.

    “Bad Boys, Bad Boys, Whatcha Gonna Do?” he chanted on the now-defunct AdSurfZone forum, a predecessor site to the Pro-ASD Surf’s Up forum. “Whatcha Gonna Do>WHEN<THEY COME FOR YOU ?!!!”

    In June 2009, while the AdViewGlobal (AVG) autosurf was failing, members were threatened with lawsuits for sharing information that purportedly was “copyrighted.” Members also were told that they risked losing their Internet service for questioning the firm in public. Journalists who published information about AVG were threatened with lawsuits.

    When the Pathway To Prosperity HYIP scheme was collapsing in 2008, members were threatened with “expulsion,” according to court filings.

    “When complaints were made externally to service providers or supposed payment agents,
    scathing rebukes were made to the ‘members,’” according to court filings.

    In February 2010, Hospitalera.com Blogger Sybille Yates announced she had been threatened with a lawsuit for calling the INetGlobal autosurf a “scam” in September 2009.

    On Feb. 23, the U.S. Secret Service raided INetGlobal’s Minneapolis offices. An affidavit by the U.S. Secret Service described the company as operating an international Ponzi scheme. A federal probe into INetGlobal’s business practices is ongoing.

  • Feds Charge Husband And Wife In Alleged Work-At-Home Scheme; Philip Pestrichello Is Recidivist Offender

    EDITOR’S NOTE: Recidivism, the tendency to continue committing crimes or breaking laws even after getting caught and perhaps even going to prison, is a common theme in the scam universe. It has been an element in many recent cases we’ve written about, including the AdSurfDaily Ponzi scheme case (principals Andy Bowdoin and Clarence Busby had previous run-ins with securities regulators); the Frank Constantino securities-fraud case (Constantino had previous run-ins with securities regulators in Georgia and Missouri); the Edmundo Rubi foreclosure-rescue case (Rubi had a previous conviction in a Ponzi/pyramid case and spent time in federal prison).

    Meanwhile, it has been an element in the Philip R. Lochmiller Ponzi scheme case (Lochmiller previously was sentenced to three years in a California state prison for a fraud scheme); the Kenneth W. Lee Ponzi scheme case (Lee spent five years in a Texas prison in a previous fraud scheme and also had a $3 million judgment against him); the Thomas L. Labry securities-fraud case (Labry had been ordered by five states to cease and desist from selling unregistered securities); the Brian David Anderson Ponzi scheme case (Anderson was linked to multiple fraud schemes and clashed with law enforcement in the United States and Canada); the Bruce Namenson mortgage-fraud case (Namenson, formerly an attorney, already was in jail for an insurance scam when charged in the mortgage case); the Troy A. Titus Ponzi scheme case (Titus, a former attorney, was disbarred for writing bad checks for huge amounts before his Ponzi scheme conviction).

    At the same time, recidivism has been an element in the Trevor Cook Ponzi and financial-fraud case (Cook had a run-in with the National Futures Association before his spectacular run-in with the SEC and the CFTC);  and the Arthur Nadel Ponzi scheme case (Nadel, a former attorney, was disbarred decades ago amid allegations he raided client funds to pay off loan sharks).

    There are other recent examples, of course.

    Here is a new one . . .

    A New Jersey man implicated in fraud schemes dating back to the early 1990s has been arrested in a new, work-at-home fraud scheme, federal prosecutors said.

    Part of the scheme centered on telling participants that the companies involved had good reputations and weren’t shady, “get-rich-quick” schemes, prosecutors said.

    Philip Pestrichello, 38, of Bayville, N.J., is a recidivist offender who served three years in federal prison after being convicted in 2003 of mail fraud in a work-at-home scheme known as “IMXT & Co.”

    Pestrichello was on supervised probation when he hatched his new scheme — for which his wife, Rosalie Florie, 38, also was arrested. Prosecutors said the husband-and-wife team collected more than $1 million, operating the scheme through entities known as “Preferred Platinum Services Network LLC” ;”PPSN LLC”; “Home Based Associate Program;” and “Postcard Processing Program.”

    “Work-at-home scams prey on some of the most vulnerable in our society — the economically disadvantaged, the unemployed, the disabled, and the elderly — who are trying to supplement their income by working from home,” said U.S. Attorney Preet Bharara.

    Bharara assigned the Complex Frauds Unit to the case. The FTC and the U.S. Postal Inspection Service also are playing pivotal roles.

    Pestrichello’s post-prison scheme began in June 2007, prosecutors said.

    Consumers were duped into sending money to Pestrichello and Florie “under the pretense that the consumers were enrolling in a program that would allow them to earn income at home,” prosecutors said. “In fact, the consumers typically got nothing in return for their payment.”

    The scheme operated though the U.S. mail, the Internet and classified ads. Participants
    were charged what they believed to be “one-time” enrollment fees of up to $90 and promised “the opportunity to earn a ‘weekly paycheck’ by labeling postcards that advertised a product called the ‘Mortgage Accelerator Program,’” prosecutors said.

    Consumers were told they could earn $1 for each postcard they labeled, but the story changed after they sent their money.

    “[A]fter consumers paid their enrollment fee, they were asked for more money to remain in the program,” prosecutors said. “Typically, consumers learned for the first time after paying the enrollment fee that they had to pay an additional fee, usually $40, for a new batch of 100 postcards for processing.”

    To keep the scheme churning, prosecutors said, the scammers pressured participants “to return their first set of labeled postcards ‘within 5 days’ or risk delays with their paychecks.

    “This caused many consumers to send in money for second and third batches of postcards before they received payment for the first batch,” prosecutors said. “By the time they realized they were not receiving any paychecks at all from PPSN, many consumers had already sent PPSN between $150 and $350.”

    Among the advertising claims were (italics added):

    “Would you like an opportunity to earn a $475 check from home processing Mortgage Products Postcards for our company?”

    “EARN $1.00 PER POSTCARD”

    “Rest assured, this is NOT a gimmick or some shady ‘get rich quick scheme.’ Our company has a rock-solid reputation . . . As one of our Home Based Associates you could earn $1.00 (one-dollar) for each Postcard you process and we conveniently offer you weekly
    compensation directly by Company Check each Friday.”

    “The vast majority of consumers ultimately received no money at all, after paying the up-front fee and labeling and returning the postcards as instructed,” prosecutors said. “Even those few individuals who were paid did not receive anything near the promised payments of $1.00 per postcard.”

    And, prosecutors asserted, the rules continued to change, thus putting consumers in the impossible position of clinging to the program in an effort to get back the money they paid in.

    “After consumers complained to PPSN that they did not receive the weekly paycheck, they either received no response from the company or were then told, contrary to PPSN’s earlier representations regarding the operation of the program, that the program was a ‘commission’ program, and that they would receive a commission only if and when the postcards they sent out generated a sale on the ‘Mortgage Accelerator’ product advertised in the postcards,” prosecutors said.

    “In fact, the Mortgage Accelerator Program itself appears to have been a sham, non-existent product,” prosecutors continued. “Although the work-at-home program was marketed as offering a ‘100% Satisfaction Policy’ guaranteeing consumers a refund in the event they are not fully satisfied with the program, refunds were rarely, if ever given. If a refund was in fact given, it was typically only after a consumer had complained to law enforcement authorities.”

    Pestrichello was in repeated trouble even prior to his 2003 criminal conviction, prosecutors said.

    “Between 1992 and 2002, Pestrichello was the subject of numerous enforcement actions by the New Jersey Division of Consumer Affairs, the Office of the Attorney General in the State of Florida, and the FTC, in connection with his operation of other consumer fraud schemes. Those actions resulted in permanent injunctions barring Pestrichello from engaging in the type of conduct and business alleged in the Complaint.”